Understanding undergraduates’ money management behaviour: a study beyond financial literacy

The money management behavior of undergraduates determines their smooth transition into adulthood. Economic, social and psychological factors also affect undergraduates’ money management behavior. Therefore, the purpose of this paper is to investigate how undergraduates manage and respond to economic, social and psychological factors affecting their money management behavior, and to examine whether this response changes as they make progress in their degree.

Adopting a qualitative exploratory approach, this study examined Australian undergraduates as they face many challenges to their money management behavior. The data were collected using six focus group discussions, held in three Australian universities, in which 47 undergraduates participated.

The findings have shown that their approach to manage spending, income, saving, peer relationships and stress changes as they make progress in their degree. However, they shared similar approaches to investment, followed parental money management advice and used technology for cost reduction, irrespective of the progress in their degree.

This study was conducted with the data collected from a relatively small sample of respondents and was limited only to undergraduates. Moreover, this study was conducted in Australia, indicating that some of the results might be specific to the Australian context.

The findings of this study can be utilized by governments, financial institutions, educational institutions and parents who are interested in inculcating prudent money management behavior in undergraduates.

This study extends the scope of the literature beyond financial literacy, and has shown how undergraduates respond to economic, social and psychological aspects relating to money management behavior and how these responses vary as they make progress in their degree. This study has applied a qualitative exploratory approach, in contrast to quantitative methods which have generally been applied for studies relating to undergraduates’ money management behavior.