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INTRODUCTION For a majority of college students, university attendance is the first time they have experienced financial independence without a parent's supervision. With the expansion of educational services in Malaysia, which tripled the number of college students in two recent decades (Economic Planning Unit, 2006) university or college students have become an important consumer market segment. However there has been limited research on financial behavior (e.g. savings and indebtedness) and problems among Malaysians, especially college students, since the concern over the role of young consumers is relatively new. Studies in the United States and other countries indicated that college students had plenty to spend but they also had low levels of financial literacy and tended to be impulse consumers (e.g., Danes, Huddleston, & Boyce, 1999). A similar situation exists in Malaysia. Sabri, MacDonald, Hira, and Masud (2010) established that Malaysian college students also had low levels of financial literacy, and that their literacy was related to their ethnicity, childhood consumer experience, and whether they attended private, versus public institutions. This study analyzes the relationship of financial practices (specifically savings behavior) and financial problems to financial literacy among college students in Malaysia. Understanding whether and how financial literacy may influence savings and specific kinds of financial problems will be useful in efforts to design more effective financial education programs to prepare young Malaysians to be effective personal financial managers when they enter the job market and start their own families. Although there are some studies of the influence of financial education on savings behavior (Bernheim, Garrett, & Maki, 2001 ; Peng, Bartholomae, Fox, & Cravener, 2007) that research has not examined the role of financial knowledge while in college, and most studies of financial problems of college students (e.g. Lyons, 2004) or of their financial practices (Lawrence, Cude, Lysons, Marks & Machtmes, 2006) have not linked those problems or practices to financial knowledge. Hence this study may be the first to connect college students' financial literacy directly to their savings behavior and financial problems. Demonstrating such a link and characterizing its importance relative to other influences during college could provide evidence for expanding campus financial education efforts. The specific objectives of this study are to identify and compare savings behavior and the financial problems experienced by students and to explore the influence of financial literacy on savings behavior and financial problems. The first general hypothesis for testing considers potential correlates of financial literacy and posits that those may also be related to savings behavior and financial problems. The second hypothesis considers whether, controlling for those correlates of financial literacy, financial literacy has its own independent influence on savings behavior and financial problems. That is:

GENRE
Non-Fiction
RELEASED
2010
September 30
LANGUAGE
EN
English
LENGTH
15
Pages
PUBLISHER
Canadian Academy of Oriental and Occidental Culture
SELLER
The Gale Group, Inc., a Delaware corporation and an affiliate of Cengage Learning, Inc.
SIZE
264.3
KB

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