Assessing the Financial Knowledge, Behaviours, and Attitudes of Undergraduates

In this study the relationship between undergraduates' financial knowledge, behaviours, and attitudes are explored. These three dimensions of financial capability are considered in order to identify ways in which they influence one another. Data are collected via a survey administered at a small, private university in the United States. Financial knowledge is evaluated with five questions related to basic financial concepts. The financial behaviours considered are following a formal budget and paying off one's credit card balance every month. Individual's attitudes towards risk and self-reported financial stress are the financial attitudes queried. The results suggest that a higher level of knowledge, in and of itself, does not lead to prudent financial behaviour. Additionally, knowledge does not influence self-reported financial stress but believing one has strong mathematical abilities lowers stress levels. Overconfidence, in the form of an inaccurate appraisal of one's knowledge, lowers the probability an individual pays off their credit card each month. Significant group differences (gender, race, and college major) in financial behaviours and attitudes are found. Group differences, and the idiosyncratic relationship between knowledge, behaviour, and attitudes suggests that financial educational initiatives will be more effective if they target specific financial behaviours in a way that recognizes the uniqueness of those enrolled in the program rather than through one-size-fits-all approaches.