Abstract:
It is possible to build up a safety net for potential expenses and unexpected financial demands by
saving money. Saving also creates an opportunity to enter into investment. The general objective
of the study was to investigate the determinants of the saving behavior of daily laborers in Batu
town. Specifically, the study was to assess the status and extent of savings, to identify the
participation of daily laborers in savings, and to examine the determinants of saving behavior of
daily laborers in the study area. To achieve this the survey research design was used. The primary
data were collected from 251 daily laborers working in Batu Tawn drawn using a simple random
sampling method and the data collection was self administred using structured questionnaires.
The data were analyzed descriptively and inferentially using SPSS version 25 and PLS-SEM
version 3.8. The analysis result shows that from the total respondents (251) only 84(33.5%) were
involved in saving activity, and the remaining 167(66.5%) of them were not. The result also
revealed that among six variables, five of them have a significant effect on daily labour-saving
behaviour. The structural equation model shows that financial literacy, financial stability,
financial goals, and social and peer influence have a positive relationship with daily laborers'
saving behaviour, whereas family size or dependents have a negative relationship with daily
laborers' saving behaviour. Based on the study results, the following recommendations were
forwarded to involve and improve saving behavior. The daily laborers should look for additional
and alternative income sources for every single day through various income-generating options.
Second, the daily laborers in the study area are advised to increase their education level so as to
be competent and understand things in advance. Third, emphasis should be given to raising and
enhancing the financial skills of the daily laborers through awareness and financial education
opportunities. In addition, financial literacy training should be arranged for daily laborers by the
employing companies. Finally, the policymakers should work on increasing the saving culture of
daily laborers through education and training in the study area.
