Financial Literacy, Self-Efficacy, and Financial Behaviour of College Students

Anastasia Anggarkusuma Arofah


Many policies have been provided to improve the financial literacy of individuals, especially through financial education programs. However, managing one’s personal finances takes more than financial literacy but also must have the self-confidence or self-belief towards their ability in managing their personal finances. This attribute is known in the psychological literature as "self-efficacy". This paper examines the importance of financial literacy and self-efficacy in affecting individual financial behaviour. Using the survey on 129 undergraduates of Economic Education, Sebelas Maret University, financial literacy and self-efficacy being factor in affecting behaviour finance. The result of research shows that financial literacy has positive and significant contribution on financial behavior since the t-value of the financial literacy is 2.73. Self-efficacy positively and significantly contributes on financial behavior with t-value 13.35. Undergraduates with high financial literacy are more likely to hold investment and savings products, and less likely to hold debt-related products. Similarly, with college students who have high self-efficacy will be better in managing their personal finances. Moreover, the significance of financial literacy and self-efficacy has important implications for the development of policies that aim to improve financial behaviour among college students in financial education programs.


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