THE LIFE CYCLE THEORY AND PERMANENT INCOME THEORY IN HOUSEHOLD FINANCIAL SUSTAINABILITY

Siti Nur Aqilah Ab Wahab; Minah Japang; Lee  Hock Ann; Nur Shahirah Azman

doi:10.33102/4a64rk70

Authors

Siti Nur Aqilah Ab Wahab Labuan Faculty of International Finance, Universiti Malaysia Sabah, 87000 FT Labuan, Malaysia Author
Minah Japang Labuan Faculty of International Finance, Universiti Malaysia Sabah, 87000 FT Labuan, Malaysia Author
Lee Hock Ann Labuan Faculty of International Finance, Universiti Malaysia Sabah, 87000 FT Labuan, Malaysia Author
Nur Shahirah Azman Labuan Faculty of International Finance, Universiti Malaysia Sabah, 87000 FT Labuan, Malaysia Author

DOI:

https://doi.org/10.33102/4a64rk70

Keywords:

Life Cycle Theory, Permanent Income Theory, Household Financial Sustainability, Household Financial Literacy

Abstract

This article explains the interplay between the Life Cycle Theory (LCT) and Permanent Income Theory (PIT) in the domain of household financial sustainability. By integrating these two prominent frameworks, it offers a comprehensive approach to understanding how households manage their financial activities across their lifetimes. Considering the criticisms of both consumption theories, the article aims to provide valuable insights into distinct aspects of household personal sustainable finance, particularly in the areas of debt management and repayment, assessing sustainable consumption behavior, household expenditure and investment patterns, as well as the utilization and reduction of debt. Integrating these two theories presents a more holistic understanding of household financial sustainability.

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