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 those involving financial education programmes. However, positive financial behaviour requires more than financial literacy: an individual must also have self-confidence or self-belief in their ability to manage 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. The research is conducted through a survey of 129 undergraduates of Economics Education, at Sebelas Maret University.  The results of the research show that both financial literacy and self-efficacy have positive and significant effects on financial behaviour.  Undergraduates with high financial literacy are more likely to hold investment and savings products and are less likely to hold debt-related products. Similarly, undergraduates who have high self-efficacy are likely to be better at 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 through financial education programmes.


financial literacy; self-efficacy; financial behaviour; financial education

Full Text:



Asian Development Bank (2013). Keynote speech at the ASEAN Financial Literacy Conference, delivered by ADB Vice President S.P. Groff, at Bandar Seri Begawan, Brunei Darussalam 10 September.

Australian Securities and Investment Commission (2013). National Financial Literacy Strategy, ASIC Report No. 403, Australian Government.

Bandura, A. (1994). Self-efficacy. In V.S. Ramachaudran (Ed.). Encyclopedia of Human Behaviour (Vol. 4, pp. 71-81). Newyork: Academic Press.

Bandura, A. (2006a). Guide for Constructing Self-efficacy Scales.In F.Pajares & T.C. Urdan (Eds.). Self-efficacy beliefs of adolescents (pp. 307-337). Greenwich, CT: Information Age Publishing.

Calvet, Laurent, Campbell. J & Sodini, P. (2005). Down or Out: Assesing the Welfware Costs of Houshold Investment Mistakes, Harvard Institute of Ecconomic Research Discussion Paper No. 2107.

Carlin, B.I & Robinson, D T. (2012). What Does Financial Literacy Teach Us? Journa of Economic Education, Taylor and Francis Journal, 43(3), 235-247.

Check J., Schutt R. K. Survey research. In: J. Check, R. K. Schutt., editors. Research methods in education. Thousand Oaks, CA:: Sage Publications; 2012, 159-185.

Chinen, Kenichiro, & Hideki Endo. (2012). Effect of Attitude an Background on Personal Finance Ability: A Student Survey in the United State. International Journal of Management. 1(29): 33-45.

Danes, S. M & Haberman, H. R. (2007). Teen Financial Knowledge, Self-efficacy, and Behavior: A gendered view. Financial Counseling and Planning, 18(2), 48-60.

Dew, J., & Xiao, J. J. (2011). The Financial Management Behavior Scale: Development and validation. Journal of Financial Counseling and Planning, 22(1), 43–59.

Dietz, B. E., Carroza, M., & Ritchey, P. M. (2003). Does Financial Self-Efficacy Explain Gender Differences in Retirement Saving Strategies? Journal of Women and Aging, 15(4), 83-96.

Farrell, L., Fry, T. R. L., & Risse, L. (2016). The Significance of Financial Self-Efficacy in Explaining Women’s Personal Finance Behaviour. Journal of Economic Psychology, 54, 85–99.

Financial Literacy and Education Commision (2011). Promoting Financial Success in the US: National Strategy for Financial Literacy, US Departeent of the Treasury.

Gutter, M. S. (2008). Financial Management Practices of College Students from States with Varying Financial Education Mandates, 1–20.

Habshick. (2007). Survey of Financial Literacy Schemes in the EU27. Hamburg. Financial Services EVERS JUNG Research and Consulting.

Lusardi, A., & Mitchell, O. S. (2014). The Economic Importance of Financial Literacy: Theory and Evidence. Journal of Economic Literature, 52(1), 5–44.

OECD (Organisation for Economic Development and Cooperation). (2013b). PISA 2012 Assessment and Analitical Framework: Mathematics, Reading, Science, Problem Solving and Financial Literacy, Paris: OECD Publishing.

Sabri, M. F, & Tze Juen, T. (2014). The Influence of Financial Literacy, Saving Behaviour, and Financial Management on Retirement Confidence Among Women Working in the Malaysian Public Sector. Asian Social Science, 10(14), 40–51.

Te’eni-Harari, T. (2016). Financial Literacy Among Children: The Role of Involvement in Saving Money. Young Consumers, 17(2), 197–208.



  • There are currently no refbacks.

Copyright (c) 2019 Anastasia Anggarkusuma Arofah

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.


International Journal of Pedagogy and Teacher Education

Print ISSN: 2597-7792
Online ISSN: 2549-8525
Published by: Faculty of Teacher Training and Education, Universitas Sebelas Maret
Ir. Sutami Street, No. 36A, Surakarta, Jawa Tengah Indonesia