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Date of Original Version



Human Development and Family Studies


College students are at a pivotal time in their lives as they face financial independence and responsible decisionmaking. In moving from dependence to independence, they will chart a course with far-reaching consequences for their future happiness and security. The methods by which college students form desirable financial habits has been largely shadowed in supposition. Because the process is not yet understood, but is of tantamount importance to the future of young people, further study is imperative. Universities have a unique opportunity to influence the development of sound fiscal practices because they combine a pivotal time frame, an educational setting, and a population with newly emerging responsibility for their financial affairs. Further, young adults who are financially responsible as college students are more likely to become well-rounded, happier, and more successful alumni.

The following report examines the financial behavior of undergraduate students at The University of Arizona.

Specifically, the study examines cash management, credit management, savings, and risky credit use. We are interested in what elements influence financial behavior, and whether responsible financial habits affect students’ quality of life, including financial satisfaction, physical and mental health, academic satisfaction and performance, and life satisfaction in general. A total of 781 undergraduate students responded to our online survey.

In short, we found as predicted, that sound financial decisions and practices are undoubtedly linked to a better life, in a variety of ways. The importance, then, of developing healthy financial habits cannot be overstated. As previously stated, colleges are in a unique position to assist this process, and in fact, we believe they have a responsibility to students as part of an overall educational framework. Specifically, our study found:

  • Undergraduate students manage cash better than credit and savings.
  • Students who have a positive attitude about cash management, find it easy to do, and feel a sense of accomplishment do better with cash management.

  • Upper-class students, particularly seniors, demonstrate a surprisingly more careless attitude with regard to credit management. Being a first-generation college student, being financially independent, having a higher personal income, taking fewer credit hours, and living off campus also result in a riskier attitude toward credit use. Negative attitudes, spending less time on studies and more time on the job, and money management also seem to lead to unwise credit use.

  • When it comes to saving money, upper-class students do worse than their lower division counterparts. Others who demonstrate poor saving habits are non-business majors, off-campus students, and those receiving financial aid. Again, students with negative attitudes and less financial knowledge are less likely to save money.

  • Not surprisingly, our study shows that parents are important role models in encouraging responsible financial behavior. Parental support and advice are key, as are having parents who are married, more highly educated and who own a home.

  • The support of college peers is also important, influencing students to develop good financial behaviors.

  • In addition to its own rewards, responsible financial behavior leads to a better life. Performing desirable financial behaviors is associated with greater financial satisfaction, better physical and mental health, and higher grades.

These findings have important implications for financial professionals, educators, campus administrators, and policymakers concerned about the well-being of college students. Promoting positive financial habits, according to this report, is likely to improve the overall well-being of college students, in addition to helping them meet their academic goals. Credit management and savings courses may be needed for undergraduates, especially upper-division students (who have worse financial behaviors than their lower-division counterparts). Timing is critical because seniors will soon be entering the job market and facing the financial decisions of independent living.

Because it is a key component of students’ financial development, parental involvement should be supported and encouraged. In addition, peer education should be fostered, with colleges creating opportunities for students to learn from each other (especially in the areas of credit and savings). Special attention should be paid to financially at-risk students who are apt to engage in risky credit behaviors, with programs designed specifically for them.