The purpose of this study was to investigate the factors influencing financial behaviors among college students in Turkey. Data was obtained from a nationwide survey of 1539 students, 748 women, 791 men and three financial behaviors were analyzed: paying bills on time, having a budget in place, and saving for the future. Logistic regression results showed that students who are more financially literate are more likely to exhibit the three positive financial behaviors. Parental teaching of finance and positive attitudes towards money were also found to be significant predictors of positive financial behaviors. A significant difference between male and female students was only observed for budgeting behavior, and male students were found to be less likely to have a budget in place to control their finances. Finance courses taken in college or high school and work experience were positively related to saving behavior, but unrelated to timely payment or budgeting. Finally, students’ class rank was not found to be significantly related to any of the financial behaviors. Policy implications are provided.
Conclusion and Discussions
The objective of the present study was to investigate the factors, which influence financial behaviors of college students in Turkey. The focus was on three behaviors, namely, paying bills on time, having a budget in place to manage finances and actively saving for the future. Several important findings emerged from our analysis. First, financial literacy of the students, as measured by their scores on a financial knowledge test, had a positive and significant impact on students’ likelihood of displaying each of the three positive financial behaviors. Hence, the first hypothesis was supported. Based on this result, policymakers and educators should try to take actions to increase financial knowledge among Turkish college students so that they display more positive financial behaviors in the future.
Second, parental teaching of finance was found to have a positive impact on the probability of displaying all three financial behaviors, providing support for the second hypothesis. This result is very important and implies that financial education should start at home. Parents need to be aware of the role they are playing in the financial socialization of their children and should discuss financial matters with them while growing up, instead of isolating them from realities of real life as is a common practice in the Turkish culture. The finding also means that policymakers should find ways to include parents in the financial education of their children. Informing parents on personal finance issues so that they acquire sound financial knowledge to transmit and encouraging them to discuss those issues with their children would be good ways to encourage positive financial behaviors among the young in Turkey. Freshmen orientations on campuses including finance sessions for students and parents or online resources for parents and college students could also be particularly useful ideas. Attitude towards money was also found to be a significant predictor of college students’ financial behaviors, providing support for the third hypothesis. Students with more positive attitudes towards money were more likely to report paying bills on time, having a budget in place and saving for the future. This result implies that while it is important to talk about money with children while they are growing up, it is crucial to make sure that this is accomplished positively. Parents and educators should be encouraged to show positive and favorable attitudes about money to students.
Another finding that emerged from our analysis is that male students are less likely to have a budget in place to control their finances. However, gender did not have a statistically significant impact on the likelihood of paying bills on time and saving for the future. Finance related courses taken in high school or college had a positive impact on the probability of saving for the future, but did not have an impact on the likelihood of displaying the other two behaviors. Another factor, which had a positive and significant impact on saving behavior, was work experience. Based on these results, offering more courses to students as electives or as a requirement to graduate seems a useful option to improve students’ financial behaviors. Similarly, universities should find ways to increase work experience of students by offering internship or on-campus employment opportunities.
The present study suffers from the following limitations. First, due to the cross-sectional design of the study, no causal relationships can be assumed. Another limitation is that only student data were collected. Data from both students and parents could be useful to operationalize parental influences. Third, social desirability bias might have affected some of our results, since students might be reluctant to report negative financial behaviors in an attempt to appear socially correct. In addition to addressing these limitations, further research could investigate the effect of additional explanatory variables such as motivational factors, as well as how financial attitudes mediate the relationship between knowledge and behavior among college students in Turkey.
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