The Study of Financial Literacy and Financial Behaviour among College Students

Abstract

The purposes of the study are : to determine the level of financial literacy among college students, conducted to examine the effect of the financial literacy to Personal Finance Opinions, Decisions and Financial Behaviour. In this study, a survey instrument which include 34 items that measure independent variable of financial literacy proxied by general knowledge, interest rate and inflation, time value of money and risk diversification. This measure using multiple choice questions and score calculated base on the percentage of the correct answers. The dependent variable measured using 10 item of Personal Finance Opinions, Decisions and Financial Behaviour questions. A sample consisting of 535 college students participated in the study. The data analysis technique used are: 1). Percentage of the correct answers to determine the level of financial literacy; 2). Multiple liniear regression and hypothesis testing using F-statistics and t-statistics to analyze the effect of the financial literacy to personal finance opinions,decisions and financial behaviour. The results show that the mean correct responses is 56.6%. It is indicate that the level remain is low. A significant effect were found between financial literacy and Finance Opinions, Decisions& Financial Behaviour. The contribution of financial literacy is 34% to financial behaviour.