Financial Literacy and Financial Management Practices Among College Students: A Basis for Designing Effective Financial

Abstract

Financial literacy and management are vital life skills that enable individuals to  manage resources wisely, make informed decisions, and secure long-term financial stability. These skills are especially important among the youth, with whom where financial demands are increasingly complex. In a world where every action carries financial consequences, understanding money is no longer a luxury but a necessity. Financial literacy extends beyond knowledge of concepts and involves the ability to apply such knowledge in real-life situations related to earning, spending, saving, and investing.       

• This study aimed to evaluate the financial literacy and financial management practices of college students, examine their interrelationship, identify gaps, and use the findings as a basis for a responsive financial education program. The study utilized a descriptive-correlational research design involving 250 students selected through proportionate stratified random sampling. Data were collected using a structured questionnaire covering financial literacy dimensions (knowledge, behavior, attitude, and awareness) and financial management practices (budgeting, saving, investing, debt management, and spending).

• Descriptive statistics and correlational analyses were employed to determine levels and relationships among variables. Findings revealed that students have high financial literacy (Mean = 3.61) and financial management practices (Mean = 3.66), with strengths in spending and debt management. However, gaps were noted in interest computation, expense monitoring, saving consistency, and investment engagement. Demographic variables showed minimal influence overall, although sex, scholarship status, allowance, living arrangement, and financial education demonstrated significant relationships with selected dimensions. Notably, financial literacy exhibited a strong positive correlation with financial management practices (r = 0.829), indicating that higher literacy leads to more effective financial behaviors.

• Based on these findings, targeted and experiential financial education programs are proposed to address identified gaps and enhance students’ financial competence, behavior, and decision-making skills.