The financial decisions the students make in universities can significantly affect their financial situation during and after university. These decisions can also affect other aspects of their lives, including their academic performance, health status and future employment Chen and Volpe (1998, 2002). Unlike the previous generations, the youths today are growing up in a culture of debt facilitated by expensive lifestyles and easy credit (Dugas, 2001). The youths being a major consumer market, emerging trends and fashions are some of the reasons the youths have fallen prey of financial mismanagement. A good number of the 21st generation is under influence of expensive purchase as an indicator of conformity to a particular social group or class. …show more content…
The indicators of insufficient personal financial literacy include high debt level, irresponsible consumption-beyond the budget, foolish commitment to get rich quick schemes, making high unwise investment decisions among others (Beal & Delpachitra, 2003).In 2002, a study was conducted in Florida, USA, targeting the youth ranging from elementary to college about their current money management practices and attitudes regarding personal finance. The study aimed at determining their behaviors in earning and accessing money, budgeting and spending, saving, banking and use of credit. On access and spending of money, the study revealed that a high percentage of college students received allowances from their parents. The study also revealed that as the youths sampled grew older, they were less likely to earn allowances from their parents. On spending behaviors, the college students were more likely to spend their money on food, school and doing things with friends “partying”. On who influences their spending, they cited themselves as the main cause of the influence. Only a small portion disclosed that they decided with their parents on how money should be spent. Further, the study revealed that budgeting increased with age while the consistency of planning declined inversely. …show more content…
Henry, Weber, and Yarbrough (2001) reported that 58% of college students do not keep a budget and tend to spend money on items they do not consider important. Chinen and Endo (2014) compared the level of personal financial literacy and confidence in making own financial decisions between the US and Japanese college students and found that nearly a half of Japanese students were not confident enough to make their own financial decisions. They found out that US students displayed a higher level of financial literacy than their Japanese counterparts. Beal and Delpachitra (2003) also reported that the business majors at one of the Australian Universities were better off in financial knowledge and skills than non-business majors, perhaps due to their higher interest in financial matters. A skillful and knowledgeable person with a good attitude is in the best position to make the most of life’s opportunities and to make budgets and to plan spending. Hayhoe, Leach, Turner, Bruin, and Lawrence (2000) found that there was a significant negative relationship between financial management practices and financial stress for both males and female university students, although this relationship was relatively stronger in males. Lyons (2003) observed that one in three students reported his/her financial situation was likely or somewhat likely to affect the ability to complete a college degree.