See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/320646354

College Student Financial Behavior: An Empirical Study on the Mediating

Effect of Attitude Toward Money

Article in Journal of Computational and Theoretical Nanoscience · August 2017

DOI: 10.1166/asl.2017.9500

CITATIONS READS

28 13,873

3 authors, including:

Nurdian Susilowati Lyna Latifah

Universitas Negeri Semarang Universitas Negeri Semarang
56 PUBLICATIONS 169 CITATIONS 16 PUBLICATIONS 162 CITATIONS

SEE PROFILE SEE PROFILE

All content following this page was uploaded by Nurdian Susilowati on 12 June 2019.

The user has requested enhancement of the downloaded file.

 RESEARCH ARTICLE XXXXXXXXXXXXXXXXX

I. COPYRIGHT © XXXX AMERICAN SCIENTIFIC PUBLISHERS ADVANCED SCIENCE LETTERS

All rights reserved Vol. XXXXXXXXX
Printed in the United States of America

College Student Financial Behavior: An Empirical

Study on the Mediating Effect of Attitude toward
Money
Nurdian Susilowati1,2, Lyna Latifah1,2, Jariyah1,3
1
Universitas Negeri Semarang, Central Java, Indonesia
2Economics Education Department, Faculty of Economics, Universitas Negeri Semarang, Central Java, Indonesia
3Accounting Department, Faculty of Economics, Universitas Negeri Semarang, Central Java, Indonesia

This study aims to (1) identify the direct effect of financial literacy on financial behavior; (2) identify the indirect effect of
financial literacy through attitude toward money on financial behavior; (3) identify the direct effect of perceived financial
confidence on financial behavior; and (4) identify the indirect effect of perceived financial confidence on financial behavior
through attitude toward money. This research was conducted at Economics Faculty in Universitas Negeri Semarang with the
sample of students who have taken Budgeting and Financial Management course. The sampling technique was propotionate
random sampling and obtained 230 respondents. In addition, the data was collected by distributing questionnaire and
analysed using path analysis. Based on the results, there is a direct effect of financial literacy and perceived financial
confidence on financial behavior. The higher the students’ level of knowledge, they are getting better on their financial
behavior. They are confident in their ability to develop best financial investments. Moreover, their planned investments are
expected to earn huge revenue in the future and thus determine their financial behavior. In addition, there is an indirect effect
of the financial literacy, perceived financial confidence, and attitude toward money on financial behavior. Attitude toward
money has successfully mediated the influence of financial literacy and perceived financial confidence on students’ financial
behaviour.
Keywords: Financial Behavior; Financial Literacy; Perceived Financial Confidence; Attitude Toward Money

1. INTRODUCTION bills, creating personal budgeting, and saving for the

College students are expected to be more
knowledgeable in dealing about financial choice and
decision, especially those studying economics in the
class. As college students are the main customer segments
of financial products and financial services, they
supposed to be careful in performing their financial
behavior. However, students tend to spend much money
than they can afford. They have not considerate to apply
what they learn in class, for instance planning an
investment for their future. Additionally, college students
are in a distinct period of their lives by managing their
money independently without any guidance (Akben-
Selcuk, 2015)2. Thus, students meet many challenges
impeded their financial management performance.
Baker and Nofsinger (2010) defined the financial
behavior as how human beings actually behave in a
financial setting4. Behavioral finance is a behavior
associated with financial applications. Akben-Selcuk
(2015) stated that the aspects of students’ financial
behavior can be seen from their punctuality in paying
*Email address: nurdiansusilowati@mail.unnes.ac.id
1
future2. Regional and cultural conditions could form their
financial behavior. In addition, the emergence of financial
products offered by banks and other financial institutions
contribute in creating financial behaviour. Furthermore,
Shim, et al (2009) said that students’ financial behavior is
obtained from their financial learning in the college for
years and will influence their decision-making in the
future10.
Therefore, it is necessary to re-examine about factors
affecting the students’ financial behavior (Gutters &
Copur, 2011; Xiao, Tang, and Shim, 2008)5,12 as prior
researches produced various results. Here, we proposed
some factors affecting the students’ financial behavior,
there are financial literacy, perceived financial
confidence, and attitude toward money.
From the above, this study will examine: (1) the direct
effect of financial literacy on financial behavior; (2) the
indirect effect of financial literacy on financial behavior
through attitude toward money; (3) the direct effect of
perceived financial confidence on financial behavior; (4)
the indirect effect of perceived financial confidence on
financial behavior through attitude toward money.
Adv. Sci. Lett. X, XXX–XXX, 201X
2. REVIEW OF RELATED LITERATURE
Planned Behavior Theory
Planned Behavior Theory is a further development of
the Theory of Reasoned Action which premised on the
belief that human beings behave in a conscious manner
with the consideration to all available information. Ajzen
(2005) added construct of perceived behavioral control to
the Theory of Reasoned Action.1 This construct was
developed to understand individual limitations to perform
a particular behavior. In other words, behavior
performance is not only determined by the attitude and
subjective norm, but also the individual's perception of
control based on his belief in the control (control beliefs).
Theoretical model of the Theory of Planned Behavior
is as follows:
a. Background factors such as age, gender, ethnicity,
socioeconomic status, mood, personality traits, and
knowledge influence the attitudes and behavior of
individuals against something.
b. Behavioral belief which is all things believed by the
individual about a behavior in terms of positive and
negative, attitudes toward the behavior or tendency to
react affectively to a behavior, either likes or dislikes
on the behavior.
c. Normative beliefs related directly to the influence of
social environment, especially those that affect lives of
significant others can affect an individual's decision.
d. Subjective norm is to the extent a person has the
motivation to follow the views of others toward a
behavior he is going to carry out (normative belief).
e. Control beliefs derived from various things such as
experience of doing the same behavior before or
experience gained because seeing other people (eg
friends, close relatives) carry out that behavior, then he
has the confidence to perform the behavior.
f. Perceived behavioral control is the belief (beliefs) that
individuals have conducted or never carry out a
particular behavior, however the individual has the
facilities and time to do the behavior, then he
estimated his ability if he able or unable to execute the
behavior.
g. Intention is the tendency of a person to decide whether
he will or will not do any work.
h. Attitudes, subjective norms, and perceived behavioral
control affects the intensity which influence the
behavior.
Previous Research
To the extent knowledge own by individual will affect
his performed behaviour, Akben-Selcuk (2015) examined
financial literacy by students’ financial knowledge and it
is found to have significant impact on students’ behaviour
(paying bills punctually, having budget, and saving)2.
Basically, financial literacy is a knowledge about relevant
behavior of financial management to calculate personal
income, financial management, saving and investment,
RESEARCH ARTICLE
expenditure, and credits. Financial literacy supports
certain decisions in term of students’ personal financial
setting. International Financial Literacy Surveys
explained that the financial literacy can be measured with
the financial management in general, savings and loans,
investments, and insurance.
Furthermore, financial literacy was affected by
perceived financial confidence (Vyvyan, Blue and
Brimble, 2014; Ajzen, 2005)11,1. Perceived financial
confidence can be defined as belief that despite
performed-unperformed particular behavior, actually an
individual has facilities and time to do such behavior,
however he estimates whether he has or has not adequate
ability to carry out such behavior. It means that every
action made by students encompass their confidence and
belief if their future can be changed to the better and have
clear prospects.
Ajzen (2005) explained that knowledge can affect
attitude1. Attitude influence behavior through some
psychological factors; such as self-confidence/esteem,
belief to change, and belief to prosperity. This lead to the
existence of direct and indirect effects among these three
variables on the behavior. One's confidence and belief on
everything in the future belong to the perceived financial
confidence and will affect his behavioral intention. The
behavioral intention can be used to overview the behavior
(Xiao and Wu, 2008)13. If someone has a positive belief
about his financial management in the future, it will affect
his attitude toward money and will ultimately affect his
financial behavior (Shim & Maggs, 2005)9.
Anz & AC Nielsen (2005) have found that financial
concerns and focus on long-term finance affect the
development of one's financial ability3. Financial attitude
was measured by money ethic scale by using three
components of attitude seen from the affective aspect
(money is the root of all evil), cognitive aspect (money is
a symbol of success), and behavior aspect (budget my
money very well). An individual’s attitude toward money
and confidence can affect his behavior. Potrich, Vieira and
Mendes-Da-Silva (2016) stated that attitude toward
money creates financial behavior7. Good financial literacy
affect the students’ financial behavior and a positive
attitude toward money will also affect a positive financial
behavior.
3. METHODOLOGY
This research was conducted at Faculty of Economics
of Universitas Negeri Semarang to students who have
taken Budgeting and Financial Management course. By
using propotionate random sampling, there were 230
respondents. Here, the dependent variable was financial
behavior (FB), whereas financial literacy (FL), perceived
financial confidence (PFC), and attitude toward money
(ATM) act as independent variables. Questionnaires were
distributed to samples and the data then was analyzed
using descriptive and path analysis.
We employ quantitative approach using explanatory
2
 RESEARCH ARTICLE XXXXXXXXXXXXXXXXX

research design to explain the conditions of each variable.
This study is categorized in ex post facto associative
causality category. The research design is described as:
Figure 1. Research Design
a measuring tool of the research data. This study used a
reliability test to find Croanbach's Alpha value. If the
value of Croanbach's Alpha > 0.6, it is reliable. According
to the reliability test, FL, PFC, ATM, and FB was proven
to be reliable as those obtain the Croanbach's Alpha value
of 0.728, 0.872, 0.832, and 0.746 respectively.

E Analysis Pre-Condition Test

FL 1 Multicollinearity test showed that if VIF < 4, the data
PY1 was free from the multicollinearity. It is described in the
P31 table below that multicollinearity does not exist among
PY3
ATM the variables:
P32
PY2 FB
Table 2. Multicollinearity Test
PFC Variable VIF
E FL 1.215
2 PFC 1.293
ATM 1.257
The definitions and measurement of the variables were FB 1.215
explained as follows:
A normality test was conducted by looking at plot
Table 1. Definition and Measurement of Variables normal graph. The result indicated that the data was both
No Variable Definition Indicators spread around and followed the diagonal line. Thus, the
1 Financial Individual’s 1. general financial data were normally distributed. Furthermore, the value of
Literacy ability to make management Kolmogorof Smirnof was 1.505 and significant at 0.000
(FL) certain decisions 2. saving and loan which meant that the data were normally distributed. Also
in his personal 3. Investment in the linearity test, it was found that the relationship
financial setting. 4. Insurance between each independent and dependent variable
2 Perceived Individual’s 1. self esteem produced p-value greater than 0.05, which was 0.075. It
Financial confidence in his 2. belief-future could be concluded that the entire relationships between
Confidence financial change
the independent and dependent variables were linear.
(PFC) management 3. belief-future
based on his prosperity Thus, the assumption of relationship linearity could also
personal belief. be met.
3 Attitude Disposition to 1. affective (money
toward respond positively is the root of all Path Analysis
Money or negatively evil) There were four variables examined in this study;
(ATM) towards a 2. cognitive (money there are: financial literacy (FL), perceived financial
behavior is a symbol of confidence (PFC), attitude toward money (ATM), and
success) financial behavior (FB). Furthermore, there are six
3. behavior (budget parameters to be identified i.e. p1 to p6 and 2 error
my money very
parameters i.e. e1 and e2. This research applied three
well)
4 Financial A behavior elated 1. being punctual in
stages of regression to view the parameter. First, the
Behavior with financial paying bills effect of FL to FB through ATM. Second, the effect of
(FB) applications 2. making personal PFC on FB through ATM. Third, the effect of FL, PFC,
budget and ATM on FB. Path analysis by these three regression
3. saving for the stages would result on the direct and indirect effects of
future the variables.
According to the regression, it was obtained partial
4. RESULTS AND DISCUSSION path coefficient as follows:
Results
Validity and Reliability
Based on the results of instrumental test to 230
respondents with 46 statement items, the Financial
Literacy (FL), Perceived Financial Confidence (PFC),
Attitude toward Money (ATM), and Financial Behavior
(FB) variables were found to be valid. The reliability test
of instrument was executed using SPSS version 19. An Figure 2. Parameter of Direct and Indirect Effects
instrument is considered as reliable if it can be trusted as among FL, PFC, ATM, and FB
3
Adv. Sci. Lett. X, XXX–XXX, 201X
FL
0,385
0,213
0,234
ATM FB
0,238
0,148
PFC
E2
E3
Discussion
Direct Effect of Financial Literacy on Financial
Behavior
It has been proven that there is a direct effect of
financial behavior on financial literacy. This finding is
supported by Sabri, et al (2010) who found that financial
literacy affected the students’ saving behavior8. Financial
literacy as knowledge of financial management in
general, saving and loan, investment, and insurance affect
the students’ financial behavior. The higher the level of
knowledge, the students are getting better at their
financial behavior. Individuals can define, plan, and
develop a better financial plan for their future. Financial
planning that has been properly determined will facilitate
one to perform certain actions and behavior in accordance
with his main priorities.
Students’ financial literacy is gained through
financial learning from their parents or during their study
in the college. Parents play a very important role in
forming the students’ financial literacy. From the family,
students have the ability to determine how great their
financial behaviour is. Hence, financial learning from
families becomes the basic financial literacy.
Additionally, individual get financial literacy from their
peers and school. Interaction with their peers can create
students’ financial behavior. If their peers have great
manners, they will own the same. Furthermore, financial
learning either at schools or colleges also determine
students’ financial behavior. Students increase their
ability in determining future planning by learning
Financial Management and Budgeting course.
This study reinforces Shim, et al (2009) research as
they found financial literacy from college can establish
students’ financial behavior10. Hence, financial literacy is
crucial for individual’s financial decision making,
especially it increase the ability to consider the financial
risks regarding his decisions. One financial decision
influence the future, then capability to measure risk led
one to make his best decision with minimum risk. This
finding is also consistent with Hilgert, Hogart and
Beverly (2003) who indicated a positive relationship
between financial behavior and financial literacy despite
unclear causality direction6. The causality may be
different, which means that an increase in the financial
literacy may leads to a better or more effective financial
RESEARCH ARTICLE
behavior as well as the financial decision making, or even
vice versa. The financial behavior is related to financial
applications, including punctuality in paying bills,
personal budgeting, and savings for the future (Akben-
Selcuk, 2015)2.
Indirect Effect of Financial Literacy on Financial
Behavior through Attitude Toward Money
An indirect effect of financial bahavior on financial
literacy through attitude toward money is clear. Ajzen
(2005) in Planned Behavior Theory explained that
individual's knowledge background affect his attitudes
and behavior against something1. Background is basically
the nature that exists in a person, which is in Kurt Lewin
model categorized into O (organism) aspect. One main
factor of background is knowledge. The attitude toward
money is an intervening variable that successfully
mediates the effect of financial literacy on students’
financial behavior. Attitude toward money consists of (1)
affective, that money is the root of all evil; (2) cognitive,
that money is a symbol of success; and (3) behaviour,
which is budget my money very well. By their attitude
toward money, the students are able to respond positively
and negatively to certain actions, and thus they may set
their financial behaviour.
This research confirms the study of Potrich, Vieira
and Mendes-Da-Silva (2016) which found that attitude
toward money determines financial behavior7. More
specifically, Akben-Selcuk (2015) stated that attitude
toward money affected students’ financial behavior2.
Students with positive attitude toward money are able to
report their monthly bill payments punctually, make their
personal budget and determine savings for the future.
Direct Effect of Perceived Financial Confidence on
Financial Behavior
The analysis showed that perceived financial
confidence directly affects financial behavior. The
perceived financial confidence is a form of behaviour
control, acting as a faith (belief) whether an individual
has or never carry out particular behavior, he actually has
the facilities and time to do it, but then he estimates if he
has the ability or not to carry out such behavior. A belief
that a behavior can be conducted (control belief) is
obtained from many factors, for instance: experience of
doing the same behavior or experience gained because
seeing other people (ie. friends, close relatives) carrying
out such behaviour and create a confidence to do the
same.
Some indicators of perceived financial confidence
are: (1) self-esteem; (2) belief-future change; and (3)
belief-future prosperity. Students believe in their ability to
draw up a good financial investment, convincing
themselves that their investment will gain extra revenue,
develop and make certain investment decisions, own
proper financial skills, ability to hold the financial
management in the future well, and strongly believe that
4
 RESEARCH ARTICLE
their financial investment is profitable and meaningful.
Students feel comfortable if they saved their money and
hold some investments for the future. These are as future
is uncertainty. By saving and investment, the future is
guaranteed.
Besides knowledge, skills, and experience, an
individual’s belief about carried-out behavior is also
determined by time availability to carry out such
behavior, supporting facilities, and ability to overcome
any difficulties that impede the implementation of this
behavior. Someone's confidence and belief in every
possibility of occurrence events is called perceived
behavioral control, which affect behavioral intention. The
behavioral intention can be examined to study the whole
behavior (Xiao and Wu, 2008)13.
Indirect Effect of Perceived Financial Confidence on
Financial Behavior Through Attitude Toward Money
There is an indirect effect of perceived financial
confidence on financial behavior with the mediation of
attitude toward money. Someone’s attitude toward money
and confidence can affect his behaviour. Values of self-
actualization are closely associated with individual’s
attitude toward money (Shim and Maggs, 2005)9, whereas
social-oriented actualization values create great behavior
(Shim et al., 2009)10. Students’ financial behavior as
responses to the money, such as money is the root of all
evil, money is a symbol of success, and budget my money
very well. These are some indicators that influence the
financial behavior.
Perceived financial confidence and attitude toward
money affect one behavioural changes (Ajzen, 2005)1.
For instance, when some determine the personal bank
savings. Beliefs about the importance of having a bank
account influencing savings behavior. Confidence is a
combination between individual’s understanding and the
attitude of a bank account owner that will influence the
intensity of behavior associated with personal savings.
Such behavior is also linked with self-efficacy of
Bandura.
5. CONCLUSION
From the research, it is confirmed that there is a
direct impact of financial literacy and perceived financial
confidence on financial behavior. The higher the level of
knowledge, students are getting better in managing their
financial behavior. In addition, students’ confidence in
their abilities can develop a profitable financial
investment. They believe that their planned investments
can earn huge revenue in the future and determine the
proper financial behaviour. In addition, there is an indirect
effect of financial literacy, perceived financial confidence,
and attitude toward money on financial behavior.
Therefore, attitude toward money has been successfully
moderated financial literacy and perceived financial
confidence on students’ financial behaviour.
Further research is expected to reveal personal
5
XXXXXXXXXXXXXXXXX
financial budget and personal belief. Personal budget is a
beginning of a great financial planning and act as a
guideline in financial management. While financial belief
is a self-belief in managing the finance well. Even though
this study examines the students’ confidence, the level of
self-confidence has not been reached. It will be
interesting for future study to address this issue.
REFERENCES
[1] Ajzen, I. Behavioral Interventions Based on The Theory of
Planned Behavior. (2005). Retrieved at from http://www-
unix.oit.umass.edu/~aizen/pdf/tpb.intervention.pdf
[2] Akben-Selcuk, Elif. “Factors Influencing College Students’
Financial Behaviors in Turkey: Evidence from a National
Survey”. International Journal of Economics and Finance:
Canadian Center of Science and Education. Vol. 7, No. 6 (2015)
[3] Anz and AC Nielsen. Understanding Personal Debt & Financial
Difficulty in Australia, (2005). Retrieved from:
http://www.anz.com.au/resources/2/6/26028f804d2bd4f282339b
69785e67b9/ANZ_UPD_fin_difficulty.pdf?MOD=AJPERES
[4] Baker, H. Kent and John R. Nofsinger. Behavioral Finance:
Investors, Corporations, and Markets. New Jersey: John Wiley
& Sons Inc., 2010.
[5] Gutter, M. dan Z. Copur. “Financial Behaviors and Financial
Well-Being of College Students: Evidence from a National
Survey. Journal of Family and Economic Issues, 32 (4), (2011).
Retrieved from http://dx.doi.org/10.1007/s10834-
011-9255-2
[6] Hilgert, M. A., Jeanne M. Hogarth, and Sondra G. Beverly.
“Household financial management: the connection between
knowledge and behavior”. Federal Reserve Buletin, (2003): 309-
322.
[7] Potrich, A. C. G., Kelmara M. Vieira, Wesley Mendes-Da-Silva.
“Development of Financial Literacy Model for University
Students”. Management Research Review. Vol. 39, No. 3 (2016).
Retrieved from http://dx.doi.org/10.1108/MRR-06-2014-0143
[8] Sabri, M. F., Maurice MacDonald, Tahira K. Hira, and Jariah
Masud. “Childhood Consumer Experience and the Financial
Literacy of College Students in Malaysia”. Family and
Consumer Sciences Research Journal. Vol. 38, No. 4 (2010):
455-467. Retrieved from: http://dx.doi.org/10.1111/j.1552-
3934.2010.00038.x
[9] Shim, S. and Jennifer Maggs. “A cognitive and behavioral
hierarchical decision-making model of college students' alcohol
consumption”. Psychology & Marketing. Vol. 22, No. 8 (2005),
pp. 649-668. Retrieved from:
http://dx.doi.org/10.1002/mar.20078
[10] Shim, S., Jing J. Xiao, Bonnie L. Barber, and Angela C. Lyons.
“Pathway to life success: A conceptual model of financial well-
being for young adults”. Journal of Applied Development
Psychology. Vol. 30, No 6 (2009): 1457-1470. Retrieved from
http://dx.doi.org/10.1016/j.appdev.2009.02.003
[11] Vyvyan, V., Levon Blue and Mark Brimble. “Factors that
Influence Financial Capability and Effectiveness: Exploring
Financial Counsellors’ Perspectives”. Australasian Accounting,
Business and Finance Journal, Special Issue on Financial
Planning & Financial Instruments. Volume 8, No. 4 (2014)
[12] Xiao, J. J., Chuanyi Tang, and Soyeon Shim. “Acting for
happiness: Financial behavior and life satisfaction of college
students”. Social Indicators Research. Vol. 92, 53-68 (2008).
Retrieved from: http://dx.doi.org/10.1007/s11205 008-9288-6
[13] Xiao, JJ and Jiayun Wu. 'Completing Debt Management Plans in
Credit Counseling: An application of the theory of planned
behavior. Journal of Financial Counselling and Planning. Vol.
19, No. 2, pp. 29-46 (2008)
Adv. Sci. Lett. X, XXX–XXX, 201X RESEARCH ARTICLE

View publication stats