Financial Literacy and Financial Behaviour of University Students in Malaysia

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Ahlam Mohd Kamel, Sheerad Sahid


This study aims to assess the financial literacy and financial behaviour of undergraduate students in Malaysia. A quantitative approach using questionnaires distributed to 339 respondents from public universities was conducted. Multiple regression, and linear regression were used to analyse the data. The findings have shown a significant relationship between financial literacy and financial behaviour, while students with high financial literacy tend to show well-managed financial behaviours such as future planning, prudent spending, and savings. Studies have found that only financial education and financial attitudes influenced financial literacy, and these findings support the Theory of Planned Behaviour (TPB) where good financial attitudes improve financial literacy and, in turn, trigger the students' desire to act in an orderly manner when it comes to financial matters. However, financial socialization could not support the Theory of Planned Behaviour (TPB) because the study found that financial socialization did not significantly affect the increment in financial literacy, thus causing students' financial behaviour to be less orderly organized. However, the element of financial literacy can serve as an extension of the Theory of Planned Behaviour (TPB) in upcoming research because, through financial literacy, theoretical abilities can be strengthened in predicting individual behaviour. Parents as the major socialization factor in students’ life are advised to be actively involved in improving the students’ financial literacy. An education policy that emphasizes the element of financial literacy is also very necessary to ensure that the next youth generation is more literate and act professionally in terms of finance.

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