International Conference on Economics, Finance & Business, Prague

HOW FINANCIAL LITERACY COULD IMPACT PERSONAL FINANCIAL BEHAVIOUR OF COLLEGE STUDENTS IN YOGYAKARTA

MUHAMMAD FATHIHA

Abstract:

The bachelor dissertation, "How Financial Literacy Could Impact Personal Financial Management of College Students in Yogyakarta," investigates the correlation between financial literacy and personal financial management among college students in Yogyakarta, which serves as one of the important educational hubs in Indonesia. Effective financial management is the prerequisite for competitiveness and sustainability in this rapidly changing digital marketplace. This study gauges the financial literacy level of the students, explores the effects it has in managing finances, and determines which literacy components are the most potent or effective in forming financial practices. This study will use a quantitative method with questionnaires to determine financial literacy and behavior. Financial literacy shall be based on a standardized test that comprises numeracy, inflation, and risk diversification. On the other hand, economic behavior is evaluated through a Likert scale questionnaire, which scrutinizes five important areas of financial behavior: consumption, cash flow, credit, savings and investment, and insurance. The findings of this dissertation highlight that the student’s financial literacy levels significantly influence their personal financial management behaviors. This research also reveals that both descriptive and correlation analyses reveal that higher literacy scores correspond to better financial behaviors such as better budgeting, prioritization, and emergency savings practices. Students who are more financially literate tend to score higher in cash flow management and rely less on credit loans for daily expenses. Financial literacy and effective financial behavior are further confirmed by methodologies that are implied in this research, such as linear regression analysis, where each point in financial literacy correlates with an increase in the overall financial behavior score. To conclude this dissertation topic, this study shows how financial literacy substantially impacts how college students manage their finances, fostering better financial planning and wise financial spending. However, financial literacy alone does not account for all financial behavior patterns, suggesting a need for a holistic approach that combines education, practical experience, and socio-cultural understanding. A comprehensive financial education program that targets budgeting, savings, and emergency planning can help students develop more vital personal financial management skills, enabling them to thrive in today's dynamic economic environment.

Keywords: Financial Literacy, Financial Behaviour, College Students, Yogyakarta, Indonesia