Academic journal article Cross - Cultural Communication

Savings Behavior and Financial Problems among College Students: The Role of Financial Literacy in Malaysia/COMPORTEMENT D'ÉPARGNE ET PROBLÈMES FINANCIERS CHEZ LES ÉTUDIANTS DE COLLÈGE: LE RÔLE DE LA LITTÉRATIE FINANCIÈRE EN MALAISIE

Academic journal article Cross - Cultural Communication

Savings Behavior and Financial Problems among College Students: The Role of Financial Literacy in Malaysia/COMPORTEMENT D'ÉPARGNE ET PROBLÈMES FINANCIERS CHEZ LES ÉTUDIANTS DE COLLÈGE: LE RÔLE DE LA LITTÉRATIE FINANCIÈRE EN MALAISIE

Article excerpt

Abstract:

This study analyzes the relationship of savings behavior and financial problems to financial literacy among college students in Malaysia. Controlling for correlates of financial literacy, multivariate analysis of a sample obtained at 11 colleges and universities demonstrated that students who had higher financial knowledge test scores were more likely to report savings behavior and also reported fewer financial problems. The influence of childhood consumer experience and financial socialization agents on savings and financial problems was more mixed, indicating that financial experience before college may create bad habits or poor attitudes toward financial management that could be mitigated through financial education during college. Implications of these findings for targeting financial education on particular kinds of students are discussed.

Key words: Savings behavour; financial problems; financial literacy; college students

Resumé: Cette étude analyse la relation entre le comportement d'épargne et les problèmes financiers de la littératie financière des étudiants en Malaisie. Le contrôle des corrélats de la littératie financière et l'analyse multivariée d'un échantillon obtenu dans 11 collèges et universités ont démontré que les étudiants qui avaient des notes plus élevées dans le test de connaissances financières étaient plus susceptibles d'avoir un comportement d'épargne et avaient moins de problèmes financiers. L'influence de l'expérience consommatrice de l'enfance et des agents financiers de socialisation sur les épargnes et les problèmes financiers a été plus mitigé, ce qui indique que l'expérience financière avant le collège peut créer de mauvaises habitudes ou de mauvaises attitudes envers la gestion financière qui pourraient être atténuée grâce à l'éducation financière pendant les études collégiales. Les implications de ces découvertes pour cibler l'éducation financière sur des élèves de types particuliers sont discutées.

Mots-clés: comportement d'épargne; problèmes financiers; littératie financière; étudiants

INTRODUCTION

For a majority of college students, university attendance is the first time they have experienced financial independence without a parent's supervision. With the expansion of educational services in Malaysia, which tripled the number of college students in two recent decades (Economic Planning Unit, 2006) university or college students have become an important consumer market segment. However there has been limited research on financial behavior (e.g. savings and indebtedness) and problems among Malaysians, especially college students, since the concern over the role of young consumers is relatively new. Studies in the United States and other countries indicated that college students had plenty to spend but they also had low levels of financial literacy and tended to be impulse consumers (e.g., Danes, Huddleston, & Boyce, 1999). A similar situation exists in Malaysia. Sabri, MacDonald, Hira, and Masud (2010) established that Malaysian college students also had low levels of financial literacy, and that their literacy was related to their ethnicity, childhood consumer experience, and whether they attended private, versus public institutions. This study analyzes the relationship of financial practices (specifically savings behavior) and financial problems to financial literacy among college students in Malaysia. Understanding whether and how financial literacy may influence savings and specific kinds of financial problems will be useful in efforts to design more effective financial education programs to prepare young Malaysians to be effective personal financial managers when they enter the job market and start their own families. Although there are some studies of the influence of financial education on savings behavior (Bernheim, Ganett, & Maki, 2001; Peng, Bartholomae, Fox, & Cravener, 2007) that research has not examined the role of financial knowledge while in college, and most studies of financial problems of college students (e. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.