The Effectiveness of Directing Household Income Toward Saving and Investment in Ensuring Livelihood Sustainability, A Field Study on Low- and Middle-Income Families in Tripoli, Libya

Abstract

This study aimed to identify the effectiveness of directing household income towards savings and investment in achieving sustainable living standards for middle- and low-income families in Tripoli, Libya.  To achieve this main objective, the sub-objectives were defined as follows: identifying spending and saving habits, determining the level of household investment, analyzing the reality of household management of savings and investment, measuring the level of sustainable living standards, and investigating the impact of both the level of household savings and the level of household investment independently on achieving sustainable living standards for the targeted families. The study adopted a descriptive-analytical approach and used a questionnaire as the primary tool for collecting field data. The questionnaire was distributed to a purposive sample of 300 heads of households from middle- and low-income families in Tripoli whose total monthly income did not exceed 3,000 Libyan dinars, in order to determine the causal relationships between the study variables. The most prominent finding was that directing income towards savings and investment is highly effective and direct in achieving sustainable living standards for families. Household investment (38.5%) and savings (32.8%) explain the variation in the sustainability of living.  The results revealed a high theoretical awareness among families of the importance of financial planning, which is met with a weakness in field application, training and institutional empowerment, as well as a preference for investing in small projects and tangible assets over bank deposits. Accordingly, the study recommended launching a national strategy for financial literacy, creating accessible and low-risk savings and investment funds, and supporting the financing of micro-projects to diversify the sources of household income and protect them from inflationary pressures.