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Theoritical Framework

College students face new financial responsibilities as they transition to independence from their parents. Many students struggle with budgeting, paying bills, and using credit for the first time. Previous research shows students are underprepared for managing their finances. Colleges can help by providing financial education courses, workshops, and other experiences to encourage students to develop sound financial practices. The document examines how students acquire financial skills and the best ways to teach these skills to promote financial well-being.

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19 views2 pages

Theoritical Framework

College students face new financial responsibilities as they transition to independence from their parents. Many students struggle with budgeting, paying bills, and using credit for the first time. Previous research shows students are underprepared for managing their finances. Colleges can help by providing financial education courses, workshops, and other experiences to encourage students to develop sound financial practices. The document examines how students acquire financial skills and the best ways to teach these skills to promote financial well-being.

Uploaded by

you sandro
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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College students are at a decisive time in their lives as they move from financial

dependence to financial independence. For a majority of students, the first year of


college is viewed as an important transitional stage in which parental supervision and
oversight are reduced and students begin to achieve some degree of financial
autonomy. When they go to college, many students are confronted with financial
responsibilities such as paying bills, creating a budget, and using credit for the first time
in their lives. How well they cope with these challenges depends in part on the financial
knowledge and behaviors they acquired

prior to arriving at college (Lyons, Scherpf, & Roberts, 2006). Previous studies in the
United States and other countries have shown that college students are inadequately
prepared for these new burdens and that they often poorly manage their finances
(Markovich & DeVaney, 1997; Chen & Volpe, 1998; Beal & Delpachitra, 2003; Murphy,
2005). Colleges and universities have a unique opportunity to encourage the
development of sound financial

practices among students through coursework, workshops, and other education


experiences (Xiao, Shim, Barber, & Lyons, 2007). Increasingly, researchers are beginning
to examine students’ knowledge about finances to determine how they acquire financial
management skills and to identify the best methods for teaching these skills, with the
goal of helping them achieve financial well-being (Shim, Xiao, Barber, & Lyons, 2009).

Today’s college students have had more money to spend than students in past
generations, but conversely they have been shown to have low levels of financial
literacy and to be impulsive buyers (Hira & Brinkman 1992; Danes, Huddleston, & Boyce,
1999; Henry, Weber & Yarbrough, 2001). Inadequate comprehension of personal
finance, such as budgeting and tracking expenses, can lead to increased conspicuous
consumption behaviors (i.e., lavish spending on goods and services for the purpose of
impressing others) among young adults. Although many studies have identified parents
as the most important sources for teaching children about money, it is reasonable to
expect that, once away from home and family, peers and the media may become more
important factors in forming college students’ financial knowledge and behavior. The
role of influences outside the family on financial knowledge and behaviors of college
students had has limited attention.

2. budgeting and tracking expenses, can lead to increased conspicuous consumption


behaviors
(i.e., lavish spending on goods and services for the purpose of impressing others) among

young adults. Although many studies have identified parents as the most important
sources

for teaching children about money, it is reasonable to expect that, once away from
home and

family, peers and the media may become more important factors in forming college
students’

financial knowledge and behavior. The role of influences outside the family on financial

knowledge and behaviors of college students has had limited attention.


Another topic of current research examines the association between financial behavior
and financial well-being (Xiao, Tang, & Shim, 2009; Shim

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