Financial Literacy, Saving Behavior, and Precautionary Saving of the Thai Sandwich Generation

Abstract

This study aims to examine the effects of financial literacy, saving behavior, and sandwich generation status on precautionary saving among Thai individuals. Primary data were collected from 402 respondents using a structured questionnaire. The data were analyzed using descriptive statistics and a Logit Model to investigate the relationships between demographic characteristics, economic factors, sandwich generation status, financial literacy, and the likelihood of having precautionary savings equivalent to at least six months of living expenses. The results indicate that income, financial literacy, and financial behavior have statistically significant positive associations with precautionary saving, while debt burden, particularly personal and educational loans, has a statistically significant negative association with precautionary saving. Working-age individuals are significantly less likely to have adequate precautionary savings than older adults. Although sandwich generation status is not statistically significant, the severity of sandwich generation burden shows a weak negative association with precautionary saving, suggesting that greater caregiving responsibilities across multiple generations may reduce individuals' ability to accumulate emergency savings. The findings further demonstrate that financial behavior contributes more to precautionary saving than financial knowledge alone. In addition, income and debt burden remain major constraints on building adequate precautionary savings. These findings provide practical implications for policymakers in designing policies to promote saving, strengthen financial literacy, and develop targeted measures that address the financial circumstances of the Thai population, thereby enhancing long-term financial security.