International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

Students’ Financial Literacy and Parental Income

Dorjana Nano1, Emil Istrofor2

1
University “Eqrem Cabej”, Gjirokaster, Albania
2
JobProAdvice, Ontario, Canada

Abstract
Financial literacy has become on focus of many financial contexts, to improve the financial well-
research studies. Evidences have shown that being of individuals and society, and to enable
financial literacy is beneficial for individuals, participation in economic life” [1]. Financial literacy
families and the community as it increases efficiency can be conceptualized on three dimensions: financial
and financial wellness, improve the quality of living knowledge, financial behavior and financial attitude.
and makes the society more financially active. In University students constitute a very important
addition, it is widely known that university student segment of the population, since they are at a crucial
constitutes one of the most key segment of time in life. Studies have shown that financial
population. During this period, most students start to decisions made early in life establish habits that
become financially independent and take financial affect students’ financial ability in their future.
responsibility. Studies undertaken in developed and University students constitute an essential segment
developing countries have demonstrated that of the tomorrow financial market. Unfortunately,
university students do not manage wisely their studies undertaken on developed and developing
personal finance. One of the main factors found to countries have found that today university students
influence their financial literacy is parental income. are not financially literate and display implementing
The purpose of this study is to explore the behaviors [2]. They have more financial
importance of students’ financial literacy and opportunities to spend compared to students in past
whether there is any linkage between parental generations, but in opposition they are found to be
income and students’ financial literacy. The main less financially literate.
objectives of this research are: i) firstly, to review One of the main factors found to impact students’
the existing literature regarding different definitions financial literacy is parental influence. Studies have
of financial literacy and its benefits. ii) secondly, to discovered that parents who discuss financial matters
evaluate how financially literate are Albanian with their children impact positively their economic
university students; ii) thirdly, to examine whether behavior and establish good habits for their future
financial literacy differs based on the level of adulthood [3]. In addition, children who have
students’ parental income; and iii) finally, to draw benefited greater parental money management
some conclusions and recommendations to improve learning are found to experience less mortgage
student’s financial literacy. An instrument comprised insolvency in their adulthood [4]. One way that
of personal finance and personal characteristics is children learn money management practices is their
administered to 637 students in Albania. The One parents’ financial behavior. It is found that higher
Way Welch ANOVA and multiple comparison parental income is associated with inadequate
technique are utilized to analyze the data. The results financial attitude. This in turn stimulates
indicate that student’s financial literacy is influenced unreasonably financial behavior. According to [5]
by their family income. students who report high parental income are more
prone to spending money, less interested in financial
1. Introduction matters and see less need for precautionary saving.
Family income serves as an indicator of a student’s
Nowadays financial literacy has become a life lifestyle, social class, and the resources and
skill for individuals. People have to meet their opportunity that are available to them.
everyday needs and wants and planning for their Despite the large body of literature studying the
future. It is necessary for them to be financially relationship between family income and children
literate in order to make smart financial decisions. financial literacy, there is still a lack of identifying
“Financial literacy is mostly considered as this correlation in Albania. This research aims to
knowledge and understanding of financial concepts identify the existing literature on financial literacy
and risks, and the skills, motivation and confidence and also to investigate the impact of parental income
to apply such knowledge and understanding in order on students’ financial literacy in the case of Albania.
to make effective decisions across a range of The main objectives of this study are:

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

 Firstly, to review the existing research on  Positive attitude to personal finance;

financial literacy;  Ability to apply sound financial behavior.
 Secondly, to evaluate a financial literacy This study, considers the official definition of the
score of university students based on [10], according to which financial literacy includes
three dimensions: financial attitude, three components: financial knowledge, financial
financial behavior and financial attitude and financial behavior. Thus, a financially
knowledge; literate person should have basic knowledge of
 Thirdly, to reveal if there is any financial concepts, maintain a positive attitude
divergence on students’ financial literacy towards money and have healthy behaviors towards
based on their parental income; personal finances. The following figure represents
 Finally, to provide some conclusions and the conceptual model of financial literacy:
recommendations in order to help
parents and students to improve their
financial practices.

The main hypothesis of this study is: Students’

parental income influences their financial
literacy.

2. Conceptualization of Financial
Literacy
Despite there is no official definition of "financial
literacy", many studies have provided different
conceptualizations. In the first sense, "financial
literacy" refers to the recognition and understanding
of financial concepts, resulting in the ability to make
informed financial decisions, with certainty and
effectiveness. In general, financial literacy can be
broadly defined or narrowly defined. A broad Figure 1. Conceptualization of Financial Literacy
definition of financial literacy is related to
"understanding of the economy" and how the
circumstances and economic conditions affect
3. The Benefits of Financial Literacy
consumer decisions [6]. The narrow definition of
Research has shown that financial literacy
financial literacy focuses on the main means of
involves micro and macroeconomic benefits.
money management, such as budgeting, savings,
Individuals’ financial literacy makes them to have
investment and insurance.
certain attitudes towards personal finance and
Literature defines financial literacy as (a) a particular
develop particular financial behaviors. These
form of financial knowledge, (b) ability to apply
microeconomic benefits are extended to other
knowledge, (c) good financial behavior and (d) good
benefits for the financial system and the overall
financial attitude. One of the basic components of
economy of a country.
financial literacy under these definitions is
knowledge or understanding [7]. In other definitions
such as [8] emphasize decision making, which 3.1 Benefits for Students
implies the attitude and financial behavior.
Meanwhile, [9] considers knowledge, attitude and The period of undergraduate studies is a key time
financial behavior as key components of financial in an individual's life. The financial habits that
ability. students have when they are at university tend to
Considering and categorizing the core of the above carry on when they grow up. The better their
definitions, we can conclude that financial literacy financial literacy when they finish school, the less
includes several elements: problems and financial difficulties they may have
 Basic numerical skills, such as the ability to later in life [11]. Financial literacy provides students
calculate the rate of return from an with the knowledge and skills needed to optimally
investment or debt interest rate; manage their personal finances. This is translated
 The ability to understand basic financial into many other short-term and long-term benefits.
concepts, risk-return relationship, different
types of investments and other financial 3.1.1 Better Financial Behavior. Good financial
products, the benefits of diversification and behavior is achieved through the development of
the time value of money; knowledge and skills that provide the basis for

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

informed decision-making [12]. Financial literacy the financial system. It brings benefits to the
increases student opportunities to save and invest, to financial system, particularly in increasing consumer
afford debts, to spend less than income, and to have a involvement in financial markets and raising public
budget. Financial literacy also reduces bankruptcy awareness on financial issues. Hence, consumers
opportunities as well as avoids poor financial make wise decisions in choosing the financial
decision making [13]. Students who lack financial products and have a better understanding of the
knowledge are constantly faced with financial government financial policies.
difficulties which are increasing considerably later in
life. 3.2.1 Financial Inclusion. The more financially
literate consumers are the greater will be the
3.1.2 Financial Efficiency. Financial efficiency opportunity to get involved in financial products and
involves selecting products based on the best value, services. For example, recognition of deposit terms
and paying the lowest possible price. Financial may enable a person to gain more interest, while the
education enhances financial knowledge and lack of knowledge of the existence of such a product
influences financial attitude by improving financial may result in the acquisition of a lower interest and
capability and efficiency [14]. Financial literacy is an opportunity to lose. Financial ability makes
more than financial knowledge about money. It individuals to better understand products and to
involves being smart consumers in buying food (to become more financially active. Individuals who
be healthy) and other purchases such as cars, houses have received financial knowledge are more likely to
and consequently affecting individuals’ safety and be involved in the financial industry and do not pay
the environment. [15] have found that students with high costs or carry high risk. Financial education
less financial knowledge have more negative encourages individuals, even those with low
opinions about finances and make more wrong incomes, to plan and save some of their income. It
decisions. They emphasize that having a high level also enhances financial involvement and gives
of financial knowledge increases student's ability to people the knowledge they need to avoid high costs,
make informed and low-cost decisions. [16] risky debts and inadequate financial products.
conducted a study at university students in Iowa to
assess the effectiveness of a personal finance 3.5.2 The More Efficient Financial System. A
workshop. Author measured financial knowledge, financial literate consumer is expected to manage
financial attitude and financial behavior before and personal finances as well as to make smart choices of
after the workshop, and found that participants investment and financial products. Consequently,
improved all the three components of financial this will have the effect of reducing the risk of
literacy. Increased financial knowledge was found to borrowing from banks and other lending institutions,
have positive impact on students’ attitudes towards as well as strengthening the measures taken by
the business and their skills becoming smart financial institutions to respond to consumer demand
consumers in the market. [17] found that students by promoting a more dynamic and efficient financial
want to obtain financial information and have system. In addition, a financially literate company is
preferences on how financial education is explained, prudent to the risk of financial institution products
who teaches, as well as on its content. and is able to understand the risk-return ratio.
Studying consumer financial risk promotes a
3.1.3 Financial Welfare. Financial welfare includes stronger market discipline for financial products, and
mainly property, income, savings, active debt as a result stimulates better risk management by
management and investment. Many authors link financial institutions and a higher standard of
students’ financial behavior with their chances of financial services. Moreover, well-informed
having success in the future. [18] mentions that a investment decisions, resulting from a high level of
high level of financial knowledge is positively linked financial literacy, result in better productive equity
with a high level and a regular source of income, as redistribution over time, reflecting on more cautious
well as a high saving rate. Although perceived methods of balancing risk with return. Consequently,
economic well-being varies by gender [19] identified this contributes to a higher growth rate, to a lower
that financial education "level the playing field" with cycle of economic instability, as well as to the long-
respect to gender differences and is effective in term benefits of financial stability [19].
changing knowledge, attitudes, and behaviors.
Increasing financial knowledge through education 3.5.3 Better understanding of Government
has been found to have a positive relationship with Financial Policies. Financially educated individuals
risk tolerance, financial attitudes, savings and are able to assess government financial policies and
investment. the actions of financial institutions. This makes
customers well-informed and able to understand
3.2 Benefits to the Financial System. Financial policies in the financial sector. For example,
literacy has a significant impact on the efficiency of financial literacy promotes the understanding and

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

acceptance of important reforms in various sectors dimensions: financial attitude, financial behavior and
such as health, education or pension reform as well financial knowledge. Thus, the questionnaire is
as enhances the public's ability to criticize non- divided into two parts. The first part consists of 42
transparent government policies. questions and expressions that measure the students’
financial literacy based on its three dimensions. The
3.3. Benefits to the Economy second part considers 14 personal questions, which
provide information on socio-demographic factors
In addition to the benefits for the individual and such as age, sex, parental income, work experience,
the financial system, financial literacy has important academic status, field of study, etc.
implications for the overall economy. As mentioned
above, the potential growth of the economy in the 4.1.1 Evaluation of the questionnaire. The first
long term is influenced by the productive distribution part of the questionnaire measuring financial literacy
of resources. Considering all the other factors is divided into three sections that test the three
unchanged, the higher rate of return adjusted by the components of financial literacy: financial attitude,
higher risk is expected to be the long-term rate of financial behavior, and financial knowledge.
economic growth. Financial literacy can affect the
distribution of resources in the economy. If investors 4.1.1.1 "Financial Attitude" Section. Financial
are financially literate, they are more likely to be attitude is a very important component of financial
better able to apply investment strategy methods, literacy. If an individual has a negative attitude
being more sensitive and prudent to the investment towards saving, there is more likely for not saving
risk as well as to the risk-return ratio. Financially money. This section is focused on measuring the
literate investors are most likely to be positioned to attitude towards money and managing personal
maximize the adjusted rate of return from their finances. Specifically, this section consisted on a
investment risk. Consequently, it is likely that subjective question that measures how safe
resources will be allocated more efficiently, resulting participants feel about money management, and ten
in a higher rate of economic growth and in a low statements that measure students’ perceptions on
economic volatility. money and personal finances. For the first question
(How safe are you in money management), there are
4. Research Methodology five options for answers (1 - Not at all safe, 2 - Not
very safe, 3 - Neutral, 4 - Somewhat safe, 5. Very
Data for this study are provided by a randomly safe). The second question consisted on nine
selected sample from five state universities and two statements (a-g) and there are five options for the
private universities in Albania. The population of answer: 1. I disagree 2. I disagree, 3. Neutral, 4. I
state and private universities is 160,839 students in agree, 5. I fully agree.
total, 78.5% of which study in state universities In order to obtain an assessment for the financial
(MAS 2014). The public universities involved in this attitude and to include this score in the overall
study are: University of Tirana; University assessment of the financial literacy, it is estimated
"Aleksander Moisiu", Durrës; University one point for every answer at 4 or 5 scale, and 0 in
"Aleksandër Xhuvani", Elbasan; University "Eqrem any other cases.
Çabej", Gjirokastra; and Agricultural University of
Tirana. Meanwhile, private universities included in 4.1.1.2 "Financial Behavior" Section. Financial
this study are: University "Marin Barleti", Tirane; behavior is considered as one of the most important
and the "Kristal" University, Përmet Branch. In this elements of financial literacy. Financial literacy
study participated 637 Bachelor and Master students, results in good financial behavior such as spending
mostly 18-30 years old, attending the full-time planning, building a secure future, etc. In contrary,
program. Participants of this survey were involved in unhealthy financial behavior would result in misuse
different areas of study: law, journalism, economics, of credit cards, mismanagement of debt, meeting
agribusiness, history - geography and medicine. In short-term needs without planning for future
order to provide the necessary data, a questionnaire security, etc. Questions involved in this section test
is delivered during the class time. This technique the way of managing personal finances and the
creates opportunities to clarify participants about any evaluation is based on the 5 level Likert Scale- 1.
uncertainty in filling the questionnaire. In addition, Not at all true to me, 2. Not true to me, 3. Neutral, 4.
this method is efficient in terms of cost and time. Somehow true to me, and 5. Very true to me. For
example: Before I buy a product, I always think
4.1. Measuring Instrument carefully if I can afford it or not.

The instrument used in this study is designed 1 2 3 4 5

based on the existing literature on student financial
literacy. Financial literacy is conceptualized in three

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

Students who select 4 "Somehow true to me", or 5 and participants have to choose the correct
"Very true to me" are considered to display good alternative. For example:
financial behavior. How much of the gross salary should be paid from
In order to obtain an assessment for the financial the employer on behalf of the employee for social
behavior and to include this score in the overall and health insurance?
assessment of the financial literacy, it is estimated  16.7%
one point for every answer at 4 or 5, and 0 in any
 11.2%
other case.
 21.7%
4.1.1.3 "Financial Knowledge" Section. A  None of the above alternatives.
financially literate person will have knowledge of
basic financial concepts as well as knowledge about Borrowing. This part includes three questions that
savings and investments, insurance, and borrowing. test the ability of students to assess the right
This section includes four parts: general knowledge, information on obtaining a bank loan, bad debts
savings and investments, insurance and borrowing. knowledge and legal responsibilities in the case of a
loan co-financed. Questions involve multiple
General knowledge. This part consists on nine alternatives and participants have to choose the
questions that test student knowledge about the correct answer.
importance of personal finance, identifying the most For example:
liquid assets, the instrument providing more interest, If you sign up with a friend a bank loan on his
the discount calculations, and other questions testing behalf, then you:
basic financial concepts. Questions involve multiple  You can get a share of the principal.
alternatives and participants have to choose the  Become a guarantor for your friend's trust,
correct alternative. For example: but you have no legal obligation on the loan.
 You are responsible for repaying the loan if
Personal finance knowledge helps you more to: your friend fails to repay.
 You have the benefit of getting a personal
 Avoid financial hardship. loan.
 Buy proper insurance in order to be protected In order to obtain an assessment for the financial
from any catastrophic risk. knowledge and to include this score in the overall
 Learn the right ways to invest for future assessment of the financial literacy, it is estimated
needs. one point for every answer at 4 or 5, and 0 in any
 Ensure a safe financial life through healthy other case.
spending behaviors.
4.2. Data Management
Saving and Investing. This part includes seven
questions that test student knowledge about simple Data management of this survey are carried out in
and compound interest, liquidity, inflation, portfolios two phases. The first phase consists in clearing and
diversification, interest rates and mathematical omitting the data in the SPSS 20 program, and the
calculations for future savings. Questions involve second phase consists in analyzing data.
multiple alternatives and participants have to choose Questionnaires completed for at least 90% are taken
the correct alternative. For example: into consideration. The response rate of the
Suppose that the annual interest earned on your questionnaires is 95%. Data entry into the program is
bank deposit is 8%, while the annual inflation rate is done based on data encryption, which is performed
10%. Do you think that you can buy more, less, or based on the relevant sections and questions.
the same quantity of products compared to In addition to counting the high scores, there are
 a year ago. summed the three scores into an overall indicator of
 More than a year ago. financial literacy which takes values from 0 to 42.
 The same amount.
 Less than a year ago. 4.2.1. Validation. The validity of an instrument
 Cannot be defined shows how well the instrument measures what is
supposed to measure. Existing literature
Insurance. This part includes four questions that test demonstrates two types of validity - the validity of
student knowledge about the importance of the content and the validity of the construct. The
insurance, accident insurance, as well as social and validity of the content is determined by the logic of
health insurance paid by the employer and the questions about addressing the topic. While the
employee. Questions involve multiple alternatives validity of the construct is determined by the size
with which a measure represents all facets of a given
construct. To improve the validity of the

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

questionnaire content two experts have worked exploration analysis based on this method is that the
independently to evaluate each section of the number of factors fits with the data. If the zero
questionnaire. Experts were asked to assess whether hypothesis is rejected, the model with the highest
the instrument used was appropriate to measure the number of factors is accepted. Factors loading less
financial ability of students in Albania. After than three are excluded from the questionnaire. The
considering the suggestions of the experts, a pilot EFA is performed for each section and repeated
study with 30 students is conducted to test the clarity every time that any factor is excluded. From the
of the questionnaire. Participants are asked about the financial attitude analysis it is found that the phrase
clarity of the questions in the questionnaire, the "How Safe Do You Feel on Money Management?"
difficulties of completing, the time needed to fill in, and "I Think Credit Cards are Safe and Risk-Free"
any mistakes in the questionnaire and whether any have a load factor of less than three and are removed
questions were inappropriate. Comments and from the analysis. In the “Financial Behavior”
suggestions of the pilot study are evaluated and section all factors loaded greater than 0.3. Based on
included in the final questionnaire. the factorial exploration of the Financial Knowledge
Meanwhile, factor analysis is considered to test the Section comprised of 23 questions it is found that 7
validity of the construct. The smaller the sample, the of them have a factor loading less than three. The
greater the possibility that the correlation coefficient terms that removed are: "Personal finance knowledge
of the sample changes from the coefficient of factor helps you more," "Net value is presented as", "The
correlation to other cases. A rule of thumb in this difference of money held by your gross salary",
case would be 10-15 participants for question. In the "Increase in inflation increases the cost of living",
case of this study the sample is large (n = 607) and Liquid asset is... ", " It is likely that you will lose all
the factorial analysis is required. Another test that your money if you have invested in many places, "
confirms the necessity of factor analysis is the KMO and "If you sign a bank loan with a friend on his
test (Kaiser-Meyer-Okin), which demonstrates the behalf…". The analysis has identified two general
variance of variables explained by the inclusive dimensions of financial knowledge: general financial
factors in this variable. The high value (close to 1) of knowledge and specific financial knowledge. Tables
the KMO test demonstrates the usefulness of the 2 and 3 below demonstrate the final results of the
factor analysis, while values smaller than 0.5 indicate factor analysis after factors loading less than three
that it is not necessary to undertake factorial analysis. are excluded.
Table 1 below demonstrates that the KMO values for
the three sections are almost 0.8, thus confirming the
4.2.2 Sustainability. Sustainability measures how
importance of factorial analysis. The last step to take
stable it is an instrument in its measurements in
before performing the factor analysis is the Barlett
different times and situations. In other words, if a
test, which tests the hypothesis that the correlation
survey is to be carried out several times, then the
matrix is an identical matrix, which means that the
results should be almost the same, with little change.
variables are not related and are not suitable for
Systematic and random errors make the results
structure identification. Values less than 0.05 of the
unreliable and changeable. A high reliability
significance of this test indicate the necessity of
coefficient indicates sustainability in results but does
factorial analysis. Table above demonstrates a zero
not necessarily indicate that the test has made
value of the Barlett test significance reconfirming the
accurate measurements. In this way, we can say that
usefulness of factor analysis.
an instrument can be stable without being valid but
cannot be valid without being stable. The
Table 1. KMO test and Barlett test
sustainability of the questionnaire considered in this
study is based on the Cronbach Alpha coefficient.
Session Session Session This indicator measures the reliability and
Financial Financial Financial sustainability of each section and the entire
Attitude Behavior Knowled questionnaire. A coefficient of 0.7 or above is
ge
considered "acceptable". Information below
KMO 0.794 0.802 0.748
represents the Cronbach Alpha coefficient for the
Chi 3099.347 2768.946 6053.859 three sections and for the overall questionnaire.
Square
df 55 28 253
Financial Sustainability 0.714 9
Batlett .000 .000 .000 Financial Behavior 0.717 8
test sig. Financial Knowledge 0.700 16
The Overall Questionnaire 0.770 33
One of the most appropriate techniques to test the
validity of the construct is the "maximum likelihood"
method (EFA), which tests the suitability of the
factors. The zero hypothesis in the factorial

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

Table 2. Factorial Exploration Analysis for the Financial Stability Section and Financial Behavior

Table 3. Factorial Exploration Analysis for the Financial Knowledge Section

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

Table 4. ANOVA

Table 5: Post Hoc Tukey Comparison

The confidence coefficient for the "Financial entire questionnaire is 0.770. Statistics show that
Attitude" section (questions 1 and 2) is 0.714. The each section and the whole questionnaire has a very
coefficient for the "Financial Behavior" section high consistency, since all Cronbach Alpha
(questions 3, 4 and 5) is 0.717 and the coefficient for coefficients meet the criterion.
the "Financial Knowledge" section (questions 6-28)
is 0.7. Meanwhile, the confidence coefficient for the

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

research concluded that financial capability includes

5. Data Analysis and Results three main components: financial knowledge,
financial attitudes, and financial behaviors.
This survey is conducted on 637 university According to different studies, financial literacy
students in Albania. The response rate of the survey brings microeconomic and macroeconomic benefits,
stands at 95% (607/637). Based on statistics of the as it increases financial efficiency and prosperity,
survey the minority of participants (10. 6%) have improves the quality of life, and makes the company
displayed minimal (0 – 20 000 Lekë) parental more financially active. Literature showed that
income. Approximately half of the respondents (48. students do not have the necessary financial
1%) have declared middle or lower middle family knowledge and attitudes to have good financial
income (greater than 20 000 Lekë – 60 000 Lekë), behavior. This study demonstrated that individuals
and 36. 6% reported upper middle or high family change slowly their financial behavior because the
income (greater than 60 000 – 80 000 Lekë, or benefits of change are not immediate. In addition, it
greater than 80 000 Lekë). demonstrated that students’ financial literacy differs
due to financial education and personal factors.
Results of analyze of variance suggest that
3.1. Financial Literacy university students are not financially literate. The
mean percentage of correct score differs among
In this section it is examined the MPCS of
different groups of students and stands less than 65%
participants financial literacy and are made relevant
for each category. Results of this study provide
comparisons based on family income. Table 4 below
evidence that parental income influence financial
provides meaningful evidence about the MPCS,
literacy of their children. Lower level of financial
standard deviation, skewness and kurtosis.
literacy is discovered among students with minimal
The distribution of MPCS values is viewed as
family income and those with higher household
normal since the values of skewness and kurtosis are
income. The most financially literate are shown to be
close enough to zero. Statistics demonstrates that
students who have declared middle family income.
Albanian university students are not financially
Results of this research can be mainly explained
literate. The MPCS are shown to be less than the
by the fact that students with higher households’
threshold level of 65%. Although the low level of
income may not have the right financial attitude
financial literacy, great differences are found among
towards money management. Since they have all the
different categories of participants. Results of
opportunities to fulfill their wants and needs, they do
analyze of variance reveal students with middle
not need to prioritize their budget, to track expenses
household income to score higher on financial
and being careful about money management
literacy (MPCS = 63. 24%), followed by students
practices. Contrary, students with middle parental
with lower – middle and upper – middle household
income may have learned that money matters.
income (MPCS = 60%). The least values of financial
Parentsˊ financial behavior is the first model for their
literacy scores are discovered among students with
children. They can teach children that “money is
higher family income (MPCS = 58. 75%) and
there to be spent”, or “Money Matters”. In concert
minimal family income (MPCS = 57. 25%). Findings
with other previous research on this topic, this study
of the F-test examine these differences to be
suggests parents to be aware about their role on
statistically significant (p=0. 00) at 5% level of
teaching children good financial habits. Training
significance using the predetermined Type I error
parents on how to teach children smart financial
rate of α = 0. 05.
attitude and behavior will make them capable to
Results of analyze of variance are confirmed by
model constructive financial habits in the home.
the Tukey Hoc technique (table 5), which considers
The relationship between minimal household
multiple comparisons among different categories.
income and students’ financial literacy appears to be
These results confirm that parental income
flaw in this study. Hence, future research it is
influences students’ financial literacy.
recommended to be undertaken to investigate this
association. Further quantitative research can also be
5. Conclusions, Discussions and conducted utilizing different techniques of study like
Recommendations logistic regression. Finally, qualitative study would
be valuable to explicate in depth the causes and
This research surveys 637 students from five consequences of the role of parental income on their
public and two private universities across Albania. It children financial literacy.
investigated the existing literature about the
definitions and benefits of financial ability as well as 6. References
about students' knowledge, attitudes and attitudes
toward personal finance. Despite the lack of an [1] OECD PISA 2012 Results, “Students and Money:
official definition of financial literacy, literature Financial Literacy Skills for the 21st Century,” PISA

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International Journal of Innovative Business Strategies (IJIBS), Volume 3, Issue 2, December 2017

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