The Impact of Family Income on Students Financial Knowledge

• Author: Dorjana Nano - Teuta Llukani
• Position: Lecturer University 'Eqrem Cabej'
• Pages: 324-332

ISSN 2410-759X Balkan Journal of Interdisciplinary Research Special Issue No 1

Acces online at www.iipccl.org IIPCCL Publishing, Tirana-Albania June 2015

324

e Impact of Family Income on Students Financial Knowledge

Doc. PhD. Dorjana NANO

Lecturer University “Eqrem Cabej”

PhD. Teuta LLUKANI

Lecturer University “Eqrem Cabej”

Abstract

Students’ nancial literacy has been an issue of concern for most researcher, practitioner and

academics. A large body of literature researches this topic and continually reports that students

have inadequate nancial knowledge to take informed and wise decisions. A nancially literate

person will have some basic knowledge on key nancial concepts like: planning cash-ow,

saving and investing, borrowing and insurance. Studies undertaken in developed and developing

countries have discovered that one of the main factors that inuence students’ nancial knowledge

is parental income. In addition, it is found that students who report high parental income are more

prone to spending money, less interested in nancial matters and see less need for precautionary

saving. e purpose of this study is to explore whether students family income aects their

nancial knowledge. questione main objectives of this study are: i) rstly, to assess the level of

nancial knowledge of Albanian university students; ii) secondly, to examine whether the nancial

knowledge diers based on dierent levels of students family income; and iii) nally, to provide

some conclusions, discussions and policy implications with regard to improve student’s nancial

knowledge. is study is based on the investigation of the hypothesis that family income inuence

students’ nancial knowledge. An instrument comprised of nancial and personal questions is

administered to 637 students from ve public and two private universities in Albania. e reliability

of the questionnaire is tested based on the dimension reduction and factor analysing techniques.

e One Way Welch ANOVA method is utilised to analyse the data. e results indicate that

student’s nancial knowledge is inuenced by their family income.

Keywords: Financial knowledge, family income, Students.

Introduction

e lack of money management know-how has been an issue of concern for about decades.

A large body of literature researches this topic and continually reports that students have

inadequate nancial knowledge to take informed and wise decisions. A nancially literate

person will have some basic knowledge on key nancial concepts like: planning cash-ow,

saving and investing, borrowing and insurance. Chen and Volpe (1998) researched the

personal nancial literacy of 924 university students from thirteen public and private college

campuses in six dierent states in the USA. e researchers focused on assessing nancial

literacy among university students, examining the relationship between nancial literacy

and students characteristics and investigating how a student’s knowledge inuences his/

her opinions decisions on personal nancial matters. e researchers found that students

do not have adequate nancial knowledge to make informed nancial decisions. ey