JRFM 16 00252 v2

Journal of
Risk and Financial

Management
Article
Determinants of Financial Literacy: Analysis of the Impact of
Family and Socioeconomic Variables on Undergraduate
Students in the Slovak Republic
Patrik Böhm * , Gabriela Böhmová, Jana Gazdíková and Viktória Šimková
Faculty of Operation and Economics of Transport and Communications, Department of Quantitative Methods
and Economic Informatics, University of Zilina, 010 26 Zilina, Slovakia
* Correspondence: [email protected]
Abstract: Technological progress and the development of electronic services make financial services
one of the fastest-growing sectors. The role of the current education system is to ensure that all users
of an ever-increasing variety of products and services understand them and are able to use them
efficiently. However, in terms of gender, socioeconomic, and demographic factors, the existing system
of financial literacy education exhibits considerable disparity. The main goal of this research was to
identify which factors had the greatest impact on the level of financial literacy and to analyse the
magnitude of that impact. The study involved 363 first-year undergraduate students at the University
of Žilina, Slovakia, and consisted of two parts—a questionnaire and a test that evaluated the impact of
five groups of factors on the level of financial literacy. The research results suggest that the student’s
gender, father’s education, family’s financial background, and student’s part-time work experience
were among the most important determinants of financial literacy. Identifying these factors can aid in
the adjustment of financial literacy education to reduce identified inequalities.
Citation: Böhm, Patrik, Gabriela

Keywords: financial literacy; education; financial behaviour; Tobit regression model; family
Böhmová, Jana Gazdíková, and
background
Viktória Šimková. 2023.
Determinants of Financial Literacy:
Analysis of the Impact of Family and
Socioeconomic Variables on
Undergraduate Students in the
1. Introduction
Slovak Republic. Journal of Risk and The financial services industry is expanding rapidly, and there is a growing number of
Financial Management 16: 252. digital innovations that, along with globalization, provide individuals with an increasing
https://doi.org/10.3390/ number of products and services. Rapidly evolving technologies and financial market
jrfm16040252 integration have broadened the range of services offered and their availability. Even
Academic Editors: Krishna Reddy relatively simple financial products, however, can appear complex and incomprehensible,
and Nirosha Hewa Welllage especially to a person who has not built up practical financial experience since youth.
Therefore, a growing number of countries are recognising the value of financial literacy
Received: 3 March 2023 education. In recent years, many countries have developed and implemented national
Revised: 9 April 2023
education strategies to improve peoples’ financial literacy, including Poland, Australia,
Accepted: 18 April 2023
Peru, Portugal, Italy, the United States, and Spain (OECD 2020). They frequently focus
Published: 21 April 2023
primarily on the young generation, which ensures long-term progress.
Financial literacy and financial education are modern concepts. Financial literacy is not
an absolute state: it is a continuum of abilities that are conditioned by factors such as age,
Copyright: © 2023 by the authors.
family, culture, or residence, as will be discussed in the subsequent chapters. It represents
Licensee MDPI, Basel, Switzerland. the state of continuous development, enabling each individual to respond effectively to
This article is an open access article new events and a continuously changing economic environment (NBS 2019). The European
distributed under the terms and Economic and Social Committee has defined financial education as “the process by which
conditions of the Creative Commons consumers improve their understanding of financial products, financial risks, and market
Attribution (CC BY) license (https:// opportunities to make informed decisions about their finances” (Pintó 2011, p. 2).
creativecommons.org/licenses/by/ Policymakers in economies around the world recognize the importance of financial
4.0/). education. The European Union has been paying increased attention to citizens’ financial
J. Risk Financial Manag. 2023, 16, 252. https://doi.org/10.3390/jrfm16040252 https://www.mdpi.com/journal/jrfm

J. Risk Financial Manag. 2023, 16, 252 2 of 20
literacy since 2007, when the European Commission emphasised the need for financial
education and called on member states to support it through public authorities, non-
government organizations, and the financial services sector. Making financial education
available to the general public, according to the Commission, will encourage consumers
to plan both their spending and saving in order to avoid over-indebtedness (Pintó 2011).
In 2021, The European Banking Federation issued a Financial Literacy Playbook for Eu-
rope, outlining the work and ongoing activities, developments, and events in the field of
financial education. It concluded that a growing number of countries in Europe are using
public–private partnerships as a model for financial education. Such cooperation can be a
key success factor in increasing financial literacy (Katroshi et al. 2020). The Organisation
for Economic Cooperation and Development (OECD) and its International Network for
Financial Education provide governments with a unique forum for exchanging views and
experiences, such as National Strategies for Financial Education, Financial Education and
Women, Measuring Financial Literacy, and others (Katroshi et al. 2020). The OECD 2016
Report (OECD 2016a) gave an assessment of the most relevant and innovative financial
education policies and initiatives at the intersection between financial education, financial
consumer protection, and financial inclusion. Given the growing interest in financial educa-
tion in Europe and the rapid development of many initiatives from various stakeholders,
this report is complemented by other regional reports from Africa, Latin America, the
Caribbean, and the Asia-Pacific.
In 2008, the Government of the Slovak Republic approved a Draft Strategy for Educa-
tion in the Financial Field and in the Management of Personal Finances. Subsequently, the
National Standard for Financial Literacy was developed, which, in addition to financial
topics, also integrates consumer education, anti-corruption education, business education,
and anti-fraud education. The current version of the National Standard for Financial, valid
from September 2017, defines the breadth of knowledge, skills, and experience in the field
of financial education and personal finance management among high school graduates.
Many institutions in Slovakia address the issue of the level of financial literacy. The
National Bank of Slovakia (NBS) is aware that the low financial literacy of the population
in Slovakia is a frequent cause of financial problems that consumers get into and is the
reason for their dissatisfaction with financial services. One of the goals of the NBS’s
communication policy is to further participate in the implementation of education aimed at
supporting the development of financial literacy. To achieve this goal, the NBS prepared
the Strategy of the National Bank of Slovakia to support financial literacy. In addition
to the NBS, commercial banks and non-profit organizations also contribute to improving
financial literacy. As an example, the Grant Idea for Schools from Poštová banka and the
Slovenská sporitel’ňa Foundation can be stated. A large range of long-term and short-term
projects is also organised by the non-profit educational organization Ja Slovensko, such as
Me and Money, Basics of Business, Applied Economics, and More Than Money (NBS 2019;
O programe Ja a peniaze 2021).
Furthermore, many schools are implementing innovative e-learning teaching methods
(Štofko and Štofková 2014). Despite the aforementioned activities, research suggests that
the level of financial literacy in Slovakia is not improving. In 2010–2017, the National Bank
of Slovakia, in cooperation with the Statistical Office of the Slovak Republic, carried out a
partial measurement of the financial literacy of adults, a module within The Household
Finance and Consumption Survey. Despite this research, knowledge about the level of
financial literacy of the adult population of Slovakia is currently considerably limited.
However, looking at the data for Slovakia on property foreclosures, household indebtedness,
and consumer behaviour, we can conclude that the level of financial literacy of a significant
part of the population is insufficient. The poor state of financial literacy in Slovakia
compared to other countries is also pointed out by related surveys such as the Financial
Literacy Around the World, Standard & Poor’s Financial Literacy in the World, and the
Slovak Investment Behaviour Survey. A 2017 survey of undergraduate students from
the Slovak University of Technology found that only 10% of respondents had a relatively
J. Risk Financial Manag. 2023, 15, x FOR PEER REVIEW 3 of 21
significant part of the population is insufficient. The poor state of financial literacy in Slo-
J. Risk Financial Manag. 2023, 16, 252 vakia compared to other countries is also pointed out by related surveys such as the3Fi- of 20
nancial Literacy Around the World, Standard & Poor’s Financial Literacy in the World,
and the Slovak Investment Behaviour Survey. A 2017 survey of undergraduate students
from the Slovak University of Technology found that only 10% of respondents had a rel-
good level of financial literacy (Janáková and Fabová 2017). On the contrary, up to 50%
atively good level of financial literacy (Janáková and Fabová 2017). On the contrary, up to
of students had financial literacy only at a basic level. These results were worse than the
50% of students had financial literacy only at a basic level. These results were worse than
results of the previous analysis conducted in 2007. Similarly, the research of financial
the results of the previous analysis conducted in 2007. Similarly, the research of financial
literacy at the University of Žilina (Böhm et al. 2021) in 2020, which examined the impact of
literacy at the University of Žilina (Böhm et al. 2021) in 2020, which examined the impact
secondary education on the level of financial literacy, showed that the success rate of first-
of secondary education on the level of financial literacy, showed that the success rate of
year undergraduate students was just 56%, even though students of economics were also
first-year undergraduate students was just 56%, even though students of economics were
included in the study. One explanation for poor financial literacy may be the insufficient
also included in the study. One explanation for poor financial literacy may be the insuffi-
connection of theoretical knowledge with practical requirements, which is an essential
cient connection of theoretical knowledge with practical requirements, which is an essen-
part of the educational process (Štofková et al. 2016). In addition to the aforementioned
tial part of the educational process (Štofková et al. 2016). In addition to the aforementioned
studies, the research of Pružinský and Mihalčová (2014) evaluated the financial literacy
studies, the research of Pružinský and Mihalčová (2014) evaluated the financial literacy of
of students at three universities in Slovakia and analysed the correlation between them.
students at three universities in Slovakia and analysed the correlation between them. Sim-
Similarly, Zvaríková and Majerová (2014) aimed at determining the financial literacy of the
ilarly, Zvaríková and Majerová (2014) aimed at determining the financial literacy of the
adult population in Slovakia without a special focus on university students.
adult population in Slovakia without a special focus on university students.
International comparisons of students’ level of knowledge at three-year intervals are
International comparisons of students’ level of knowledge at three-year intervals are
regularly provided by the Program for International Student Assessment (PISA), which
regularly provided by the Program for International Student Assessment (PISA), which
documents the level of students’ knowledge in the field of reading, science, and mathe-
documents the level of students’ knowledge in the field of reading, science, and mathe-
matics, as well as financial literacy. In the area of financial literacy, Slovak students gained
matics, as well as financial literacy. In the area of financial literacy, Slovak students gained
an average of 470, 445, and 481 points in 2012, 2015, and 2018, respectively, which were
an average of 470, 445, and 481 points in 2012, 2015, and 2018, respectively, which were
all below the OECD average. An important finding is that Slovakia has ranked among
all below the OECD average. An important finding is that Slovakia has ranked among the
the countries with an above-average impact of socioeconomic background on student
countries with an above-average impact of socioeconomic background on student perfor-
performance (OECD 2020). It is alarming that Slovakia did not apply for the PISA 2021
mance (OECD 2020). It is alarming that Slovakia did not apply for the PISA 2021 financial
financial literacy testing. The results of Slovak students compared to the OECD average in
literacy testing. The results of Slovak students compared to the OECD average in PISA
PISA testing are shown in Figure 1.
testing are shown in Figure 1.
Slovakia OECD average
505
510
500
500
489
490
481
480
470
470
460
445
450
440
430
420
410
PISA 2012 PISA 2015 PISA 2018
Figure 1. Results of PISA testing 2012, 2015, and 2018.

Figure 1. Results of PISA testing 2012, 2015, and 2018.
The absence
The absence ofof consistent
consistent financial
financial literacy
literacyeducation
educationfromfrompreschool
preschooltotosecondary
secondary
school, as well as a lack of teacher training, might be among the reasons
school, as well as a lack of teacher training, might be among the reasons why Slovak why Slovak stu-
stu-
dents have deteriorated in testing. Furthermore, as PISA assessments consistently
dents have deteriorated in testing. Furthermore, as PISA assessments consistently reveal, reveal,
the level
the level of
of financial
financial literacy
literacy at
at the
the system,
system, school,
school,and
andstudent
studentlevels
levelsisisrelated
relatedtotothe
the
student’s socioeconomic status—and there are considerable inequalities
student’s socioeconomic status—and there are considerable inequalities in Slovakia in Slovakia in thisin
regard.
this The The
regard. Economic,
Economic,Social, and Cultural
Social, StatusStatus
and Cultural IndexIndex
(ESCS), introduced
(ESCS), by PISA,
introduced by was
PISA,
was created on the basis of the following variables: International Socio-Economic Index
of Occupational Status; the highest level of education of the student’s parents, converted
into years of schooling; PISA family wealth index; PISA index of home educational re-
sources; and the PISA index of possessions related to “classical” culture in the family home
(OECD 2002). The ESCS index summarizes many different aspects of student’s family
backgrounds and can be used to estimate the impact of socioeconomic status on student
performance (OECD 2016b).
Current Research
Most researchers tried to identify the factors that affect the level of financial liter-
acy. The following section describes research that focused mainly on the influence of
socioeconomic factors on the level of financial literacy.
Rudeloff (2019) investigated how various informal learning opportunities affect students’
financial literacy. Discussions with parents and siblings were among the most important
informal source of financial education, but socioeconomic background was associated with the
level of financial literacy as well. The aim of the study of Setiyani and Solichatun (2019) was
to examine the impact of financial literacy and financial socialisation on financial wellbeing
through financial behaviour. In particular, they pointed to the positive influence of parents,
friends, and the media on financial behaviour. The research of Pahlevan Sharif et al. (2020)
revealed that parents’ behaviour directly affects young adults’ financial behaviour. The
impact of parents’ financial behaviour on their children, especially in the area of financial
planning, was also studied by Kagotho et al. (2017). The effect of social influence on
savings behaviour was evaluated by Jamal et al. (2015) as well. Their results suggested
that the influence of family and peers played an important role in shaping students’ fi-
nancial behaviour. According to Vijaykumar (2022), the effect of family discussions is the
most important factor of financial literacy. The influence of parents on children’s financial
decisions and gender differences was also highlighted in a study by Agnew et al. (2018).
Their findings support the argument that a different type of financial socialisation occurs
depending on the child’s gender. Specifically, for men, financial literacy is positively influ-
enced by objective mathematical skills, while for women, the main predictor of financial
literacy is self-efficacy (Al-Bahrani et al. 2020). Inequality in the financial literacy of Korean
adolescents with respect to gender, parental education, financial socialising agents, finan-
cial experience, monetary attitudes, and demographic characteristics has been studied in
(Sohn et al. 2012). Dangol and Maharjan (2018) assessed the impact of parents’ education,
gender, marital status, and income and the influence of parents and peers on the economic
behaviour of Nepalese youth. Ansong and Gyensare (2012) attempted to find a link be-
tween financial literacy and demographic characteristics. They observed that age, work
experience, and the mother’s education were positively associated with financial literacy,
while, contrary to previous research, the level of study outcomes, work location, father’s
education, and the source of education on financial literacy were not significantly correlated
with financial literacy. Lopus et al. (2019) showed that increases in students’ financial
literacy knowledge in West Java were found to relate to prior knowledge, job experience,
and the type of school they attend. Lusardi and Mitchell (2009) showed that financial
literacy was closely linked to gender, parental education, sociodemographic characteristics,
and family financial requirements. The influence of parents’ level of education on univer-
sity students’ financial knowledge, along with other indicators such as race, gender, and
age, was studied by Murphy (2005). Consistent with the results of previous studies, the
impact of academic skills along with students’ personal and family backgrounds on the
level of financial literacy of undergraduates in Malaysia was confirmed in Sabri et al. (2010).
In addition, Lusardi et al. (2009) examined young peoples’ financial literacy using data
from the National Longitudinal Youth Survey. Their findings give evidence that financial
literacy is strongly related to sociodemographic characteristics and the family’s financial
sophistication. However, as Brillová pointed out, parents who should be a role model in
their children’s financial planning often have irresponsible financial behaviour themselves
(Brillová 2017).
Gutter et al. (2010) examined the relationship between financial behaviour and age,
race, marital status, school status, income, and loan amounts. Danes and Hira (1987)
showed that gender, income, marital status, and students’ employment have a significant
impact on their financial literacy levels, as previous research has shown. The aim of the
study of Gutter and Copur (2011) was to examine the relationship between gender, race,
marital status, and the use of credit cards on the one hand and the financial wellbeing
of students on the other. In addition to gender differences, significantly strong ethnic
inequality was found in a study by Falahati et al. (2011). de Clercq (2009) also examined
whether age, gender, and students’ out-of-pocket allowances had an impact on financial
opportunities.
Bhushan and Medury (2013) concluded that there is gender disparity in the level
of financial literacy. They confirmed the hypothesis that the level of financial literacy of
students depends on education, income, and place of employment, but the hypothesis of
dependence on the place of residence was not confirmed. The financial literacy survey
among university students also identified gender differences in financial literacy levels and
confirmed the impact of work experience, age, and school success on students’ financial
literacy (Chen and Volpe 2002). Falahati and Paim (2011) examined the gender differ-
ences in the financial wellbeing, financial socialisation, and financial knowledge among
Malaysian college students. In contrast to previous research, their overall findings indicated
higher financial satisfaction of female students over male students, which could be due
to their lower levels of desire and expectations from life in the male preference culture.
Other research findings, namely that female students achieved a lower level of financial
knowledge and later-age financial socialisation, are in line with other research.
Unlike other research, the study of Sachitra and Wijesinghe (2018) conducted on man-
agement undergraduate university students in Sri Lanka suggested that female university
students performed better in money management behaviour tests than male students. They
argued that attending university is one of the rare occasions where young women have
the right to stay away from home, and therefore have the responsibility to manage their
money independently. The study revealed that economic, social, and psychological factors
significantly affect money management behaviour as well.
Financial literacy education is an ongoing process. Products and services that require
new knowledge and skills are constantly emerging in the financial market. In addition,
since financial decisions are made by people of all ages from children who are learning to
save small amounts, from young people who make their first money to adults who want to
secure their first home, it is useful to provide financial education at all ages. Based on the
above analyses, it is evident that in the field of financial literacy testing, the most attention
is paid to primary and secondary school students in national and international research,
while testing of university students is not in the spotlight. Likewise, Slovak university
students are not sufficiently tested, and this study fills a gap in this area. This research
attempted to identify factors influencing the financial literacy of university students in
Slovakia, with the goal of determining whether students between the ages of 15 and 19
can improve their financial literacy—for example, because they use banking services to a
greater extent.
2. Materials and Methods

The main goal of the research was to identify the factors that most influence the
level of financial literacy and to assess the magnitude of their influence, using Tobit re-
gression analysis. As already mentioned, there are many possible factors influencing
the level of financial literacy. The most frequently referenced socioeconomic and demo-
graphic characteristics impacting financial literacy are, for example, specifically identified
in Oliveira and Santana (2019). We also used prior research in this study to determine the
factors influencing financial literacy, as indicated in the chapter “1.1 Current research”. We
identified the most frequently investigated factors that have been included in the previous
research on the correlation between financial literacy and socioeconomic factors and classi-
fied them into five groups—gender, secondary education, family’s economic background,
demographic factors, and economic behaviour of the student. These five groups, along
with relevant sources, are listed in Table 1.
Table 1. List of variables studied in previous research.
Variable Authors
Danes and Hira (1987); Gutter and Copur (2011);
Falahati et al. (2011); Bhushan and Medury (2013);
Gender
Agnew et al. (2018); Sachitra and Wijesinghe (2018);
Lusardi et al. (2009)
Amagir et al. (2020); Lusardi and Mitchell (2009);
Secondary education Rudeloff (2019); Ansong and Gyensare (2012);
Sabri et al. (2010)
Lusardi and Mitchell (2009); Ansong and Gyensare (2012);
Family’s economic background Amagir et al. (2020); Lusardi et al. (2009); Sabri et al. (2010);
Brillová (2017)
Bhushan and Medury (2013); Ansong and Gyensare (2012);
Demographic factors Sabri et al. (2010); European Union (2018);
Lusardi and Mitchell (2009)
Gutter et al. (2010); Jamal et al. (2015);
Students’ economic behaviour Setiyani and Solichatun (2019); Sohn et al. (2012);
Sachitra and Wijesinghe (2018)
The following is a detailed description of the five groups of factors used in the research.
1. Gender: Students stated their gender in the questionnaire—male, female, NaN.
2. Secondary education: In Slovakia, the secondary education system consists of gram-
mar schools (which prepare students for university studies and provide them with
general education), business schools (which prepare graduates for business and en-
trepreneurial functions), and other vocational schools. Students also reported their
average success rate in secondary education. The classification scale of students
in schools in Slovakia consists of five levels: 1 excellent, 2 commendable, 3 good,
4 sufficient, 5 insufficient. Respondents were consequently divided into three groups:
average grade up to 1.5, average grade from 1.5 to 2.0, and average grade greater
than 2.0.
3. The family’s economic background: Students specified the average net monthly
income of their family: from less than 1500 €, from 1500 € to 3000 €, and more than
3000 €. Students also reported their monthly earnings for part-time work or any
other type of additional income. They chose from three options: no income from
part-time work, less than 200 €, and more than 200 €. Other information provided by
students was the highest educational attainment of their father and mother. There
were two options to choose from: lower education or secondary and tertiary education.
Students also reported the amount of monthly allowance they received from parents.
They could choose from two options: less than 60 € and more than 60 € per month.
4. Demographic factors: Slovakia is a small country with a population of just over
5.4 million. Most cities have only a few thousand inhabitants, and as a result, students
could choose their place of residence from three alternatives: up to 10,000 inhabitants,
from 10,000 to 30,000 inhabitants, and over 30,000 inhabitants. Students also stated
whether—during their studies at the university—they lived at home with their parents
or not (in a university campus or rental apartment, for example).
5. The economic behaviour of the student: The main socialisation factors were also
included in the questionnaire. Students listed their information sources on financial
literacy from family, friends, press, media, or school. Students listed the banking
products they actively used, namely debit card, credit card, and internet banking.
Additionally, the students were introduced to a model situation that was to detect the
degree of their risky behaviour. Students should have answered the question: “If you
want to buy a product but don’t have the money, what would you do?” They chose
from the answers: “I borrow money from relatives or friends.” or “I won’t buy it”.
To meet the research goal, the following hypotheses were formulated (Table 2):
Table 2. List of research hypotheses.
Hypothesis Description
The gender factor has a statistically significant impact on financial literacy level.
HGender
Rationale: Most of the previous research has shown gender differences in financial literacy.
The secondary education factors have a statistically significant impact on financial literacy level.
HSecondaryeducation Rationale: Previous research indicated a relationship between education in secondary school and the
level of financial literacy of first-year undergraduate students (Böhm et al. 2021).
The family economic background factors have a statistically significant impact on financial
literacy level.
HFamilybackground
Rationale: As PISA testing suggests, the ESCS index, which quantifies students’ socioeconomic
background, has an impact on student performance.
The demographic factors have a statistically significant impact on financial literacy level.
Rationale: Previous research shows that the overall level of education in Slovakia is higher in larger
HDemographicfactors
cities (Böhm et al. 2021). Therefore, the same type of relation is expected in the case of financial
literacy level.
The students’ economic behaviour has a statistically significant impact on financial literacy level.
HEconomicbehaviour Rationale: It is assumed that the more students use banking products, the higher their level of
financial literacy.
This research included a questionnaire and a financial literacy test. The questionnaire
contained nineteen questions focusing on demographic, educational, and socio-economic
factors that could affect students’ financial literacy. The test subsequently examined the
general knowledge of students in the field of financial literacy with regard to the financial
market of the Slovak Republic. There were 13 items included in the test. For each correctly
answered question, students scored one point, and then their overall success rate was
calculated. The financial literacy test contained items that were inspired by the tasks
of the PISA 2015 tests, tasks from other financial literacy surveys in Slovakia, and our
own experience with teaching subjects focused on financial literacy. Only items with the
possibility of one correct answer were included in the test. Open-ended items were not
included in the test either. The relevance of the questions was verified in the pre-survey,
where 50 students answered all 13 questions on financial literacy. Since no disproportions
were observed, all questions were used in the test.
The research focused on the undergraduate students of the University of Žilina and
was conducted during the 2019/2020 school year. Students had 60 min to complete a
questionnaire and a financial literacy test. A sample of 50 students was first evaluated to
see whether the questions and test items were well defined and to determine the amount
of time required to complete the test. Subsequently, 363 first-year bachelor’s students
were tested.
Students from all types of secondary schools from different regions took part in the
research, and both sexes were equally represented. It can be stated that the examined stu-
dents formed a representative sample of students from Slovakia at technical and economic
universities. The sociodemographic characteristics of the sample are shown in Table 3.
Data analysis was performed in two steps. In the first step, the students’ success ratio
was calculated. In the second step, a Tobit regression model was used to determine which
determinants influence the financial literacy of students. Factors included in the regression
analysis were selected based on previous studies. The Tobit regression model was designed
to estimate the linear relation between variables. Using the variation inflation factor, it was
verified that the selected factors are not linearly dependent, and multicollinearity is not
present. All control variables used in the regression analysis are shown in Table 4.
Table 3. Sociodemographic characteristics of the sample.
Variable Options Share (in %)

Male 45.7
Gender Female 54.3
NaN 0
Zilina 51.2
Region
Other 48.3
Less than 10,000 16.8
City Size—Population 10,000–30,000 58.7
More than 30,000 24.5
Grammar School/Business Academy 61.2
Type of Secondary School
Vocational School 38.8
Table 4. Control variables used in the Tobit regression model.
Control Variable Acronym Value (Encoding)

GendFem Female—1, No—0
Gender
GendMale Male—1, No—0
SchoolVoc Yes—1, No—0
Type of secondary school
SchoolGram Yes—1, No—0
Gradeless1.5 Yes—1, No—0
Average grade Grade1.52.0 Yes—1, No—0
Grademore2.0 Yes—1, No—0
Lower than tertiary—0
Father’s education FatherEdu
Tertiary—1
Lower than tertiary—0
Mother’s education MotherEdu
Tertiary—1
IncFamLess 1500 Yes—1, No—0
Family Income IncFam15003000 Yes—1, No—0
IncFamMore3000 Yes—1, No—0
PocMonless60 Yes—1, No—0
Pocket money
PocMonmore60 Yes—1, No—0
PTWless200 Yes—1, No—0
Part-time work PTWMore200 Yes—1, No—0
PTWNo Yes—1, No—0
CityPopeless10000 Yes—1, No—0
City Population CityPop1000030000 Yes—1, No—0
CityPopmore30000 Yes—1, No—0
LivingOther Yes—1, No—0
Living during university studies
LivingHome Yes—1, No—0
Socialisation factor InfoFamily Yes—1, No—0
Student uses debit card ServDCard Yes—1, No—0
Student uses credit card ServCCard Yes—1, No—0
Student uses internet banking ServIB Yes—1, No—0
BorrowMoney Yes—1, No—0
Model situation
Donotbuy Yes—1, No—0
In order to analyse the impact of individual groups of factors on financial literacy, four
regression models were constructed. The first model (Model A) included variables from
the Gender and Secondary Education groups. In Model B, variables from the Family’s
Economic Background group were further added to the variables from the previous two
groups. The third Model C contained variables from four groups: Gender, Secondary
Education, Family’s Economic Background, and Demographic factors. The last Model D
included the variables from all five groups.
For data processing, R statistical language and environment for statistical computing
was used (R Core Team 2013). The censReg package (Henningsen 2020) was used to
calculate censored regression model.
3. Results
The research on the level of financial literacy of university students included 363 stu-
dents. The average success rate of the test was 56.18%, which equals the average level of
financial literacy. All questions were answered correctly by three students, and one student
did not have a single correct answer. Descriptive statistics of students’ financial literacy
test results are in Table 5.
Table 5. Overall success rate—descriptive statistics.
Students Min Max Median Mean SD

363 0 100 53.85 56.18 17.97
Tobit’s ordinary least squares regression analysis (OLS) was used to assess the level of
influence of the five groups of indicators on the level of financial literacy of students. Using
the criteria of the coefficient of variation inflation (VIF), selected indicators were tested for
multicollinearity, and all variables had VIFs within acceptable limits (less than 5). To assess
the impact of selected variables on the level of financial literacy, four regression models
A–D, described in the previous chapter, were constructed.
Table 6 summarizes the results of the multiple regression analysis of all four models.
Estimated values of all variables together with corresponding p-values are presented.
Model A contained four explanatory variables, three of which were statistically sig-
nificant at the 0.001 significant level—Gender, SchoolVoc, Gradeless1.5, Grademore2.0. This
model explained approximately 12% of the variability in financial literacy. Model A shows
that women had a financial literacy level 8.41 percentage points lower than men. Gender
was statistically significant in the other three models as well, with a level of significance of
0.001. On average, women had a level of financial literacy 6.8–8.4 percentage points lower
than men.
Figure 2 shows the success rate of students in the financial literacy test depending
on the type of high school and their high school performance. Model A further shows
that students with an average grade of less than 1.5 in high school performed almost
7 percentage points better than students with an average grade of 1.5 to 2.0, and students
with an average grade in high school greater than 2.0 had 4 percent worse results as their
peers with a grade from 1.5 to 2.0. Gradeless1.5 and Grademore2.0 were statistically significant
factors in the other three models as well. Students with learning outcomes below 2.0 had
a lower level of financial literacy than students with scores from 1.5 to 2.0, ranging from
4.1 percentage points (Model D) to 5.4 percentage points (Model C). Students with excellent
high school results of up to 1.5 had a better level of financial weight from 4.8 percentage
points (Model D) to 6.6 percentage points (Model C) compared to their peers with results
from 1.5 to 2.0.
In Model A, SchoolVoc was a statistically significant variable, with students studying at
vocational and business schools having a level of financial literacy 8.27 percentage points
worse than high school students. SchoolVoc was also statistically significant in other models,
with students studying at vocational and business schools having worse financial literacy
scores, from 4.3 percentage points (Model D) to 6.2 percentage points (Model B), than
students studying at grammar schools.
PocMonupto60 5.144 (0.005 **) 4.804 (0.010 *) 3.244 (0.067 .)
PTWNo −6.502 (0.021 *) −6.584 (0.019 *) −6.575 (0.016 *)
PTWMore200 −0.295 (0.877) −0.009 (0.996) −0.328 (0.855)
CityPopless10000 6.193 (0.011 *) 5.927 (0.009 **)
J. CityPopmore30000
Risk Financial Manag. 2023, 16, 252 7.120 (0.011 *) 5.965 (0.024 *) 10 of 20
LivingHome −2.681 (0.144) −3.304 (0.057 .)
InfoFamily 3.767 (0.026 *)
ServDCard Table 6. OLS Regression Analysis Results: Models A–D. 4.032 (0.084 .)
ServCCard −5.471 (0.018 *)
ServIB Model A Model B Model C Model
4.188 D *)
(0.045
BorrowMoney Estimate (p-Value) Estimate (p-Value) Estimate (p-Value) −3.718 (0.052
Estimate .)
(p-Value)
Donotbuy
(Intercept) 63.027 (0.000 ***) 61.237 (0.000 ***) 57.528 (0.000 ***) 5.202 (0.003 **)
51.12 (0.000 ***)
logSigma 2.825 (0.000 ***) 2.787 (0.000 ***) 2.774 (0.000 ***) 2.706 (0.000 ***)
GendFem −8.414 (0.000 ***) −6.812 (0.001 ***) −7.329 (0.000 ***) −6.833 (0.000 ***)
R2 adjusted 0.12 0.17 0.19 0.28
SchoolVoc −8.268 (0.000 ***) −6.221 (0.001 ***) −5.767 (0.002 **) −4.336 (0.012 *)
Note: *** p < 0.001, ** p < 0.01, * p < 0.05, . p < 0.1.
Gradeless1.5 6.967 (0.001 ***) 6.055 (0.003 **) 6.573 (0.001 **) 4.839 (0.013 *)
Grademore2.0 −4.094 (0.066 .) −4.411 (0.041 *) −5.376 (0.013 *) −4.148 (0.042 *)
Model A contained four explanatory variables, three of which were statistically sig-
FatherEdu nificant at the 0.001 4.400 (0.051 .) level—Gender,
significant 4.692SchoolVoc,
(0.039 *) Gradeless1.5, 4.582Grademore2.0.
(0.032 *) This
MotherEdu −2.338 (0.283) −2.322 (0.284) −2.846 (0.161)
IncFamLess 1500
model explained approximately
−5.801 (0.003 **)
12% of the variability in
−5.242 (0.007 **)
financial literacy. Model
−4.502 (0.014 *)
A shows
IncFamMore3000 that women had a 3.605 financial
(0.237)literacy level 8.41 percentage
2.754 (0.362) points lower
0.352than men. Gender
(0.902)
PocMonupto60 was statistically significant
5.144 (0.005 in**)
the other three models
4.804 as well, with3.244
(0.010 *) a level of significance
(0.067 .)
PTWNo of 0.001. On average, −6.502
women *) a level −
(0.021 had of6.584
financial
(0.019 literacy
*) −6.575
6.8–8.4 percentage
(0.016 *) points
PTWMore200 lower than men. −0.295 (0.877) −0.009 (0.996) −0.328 (0.855)
CityPopless10000 Figure 2 shows the success rate of students in the*)financial literacy
6.193 (0.011 5.927test depending
(0.009 **) on
CityPopmore30000 the type of high school and their high school 7.120performance.
(0.011 *) Model5.965
A further
(0.024 *)shows that
LivingHome students with an average grade of less than −2.681
1.5 in(0.144) −3.304 (0.057
high school performed almost.) 7 per-
InfoFamily centage points better than students with an average grade of 1.5 to3.767 2.0, and students
(0.026 *) with
ServDCard an average grade in high school greater than 2.0 had 4 percent worse 4.032 (0.084
results as.)their peers
ServCCard with a grade from 1.5 to 2.0. Gradeless1.5 and Grademore2.0 were − 5.471 (0.018significant
statistically *)
ServIB 4.188 (0.045 *)
factors in the other three models as well. Students with learning outcomes below 2.0 had
BorrowMoney −3.718 (0.052 .)
Donotbuy
a lower level of financial literacy than students with scores from 1.5 to 2.0, ranging from
5.202 (0.003 **)
logSigma 4.1 percentage
2.825 (0.000 ***) points (Model
2.787 (0.000 ***)D) to 5.4 percentage points
2.774 (0.000 ***) (Model C). Students with excel-
2.706 (0.000 ***)
lent high school results of up to 1.5 had a better level of financial weight from 4.8 percent-
R2 adjusted 0.12 0.17 0.19 0.28
age points (Model D) to 6.6 percentage points (Model C) compared to their peers with
Note: *** p < 0.001, ** p < 0.01, * p < 0.05, . p < 0.1.
results from 1.5 to 2.0.
Figure2.2.Success
Figure Successrate
rateof
ofstudents
students in
in the
the financial
financial literacy
literacy test
test depending
depending on
on the
the type
type of
of high
high school
school
and their high school performance.
and their high school performance.
Model B contained eleven explanatory variables, with the variables FatherEdu, Moth-
erEdu, IncFamLess1500, IncFamMore3000, PocMonupto60, PTWMore200, and PTWNo added
to the variables from Model A. Of the seven added variables, two were statistically signifi-
cant at the significance level of 0.001—Gender, SchoolVoc; three were statistically significant
at the level of significance 0.01—Gradeless1.5, IncFamLes1500, PocMonup60; and two were
statistically significant at the level of significance 0.05—Grademore2.0 and PTWNo. This
model explained approximately 17% of the variability in financial literacy.
werestudents
than statistically significant
studying at the level
at grammar of significance 0.05—Grademore2.0 and PTWNo.
schools.
This Model
model B explained
contained eleven explanatoryofvariables,
approximately 17% the variability in financial
with the variablesliteracy.
FatherEdu, Moth-
erEdu, IncFamLess1500, IncFamMore3000, PocMonupto60, PTWMore200,literacy
Figures 3 and 4 show the success rate of students in the financial test depend-
and PTWNo added
ing on the education of their parents and their family’s economic background.
to the variables from Model A. Of the seven added variables, two were statistically signif-
icant at the significance level of 0.001—Gender, SchoolVoc; three were statistically signifi-
cant at the level of significance 0.01—Gradeless1.5, IncFamLes1500, PocMonup60; and two
were statistically significant at the level of significance 0.05—Grademore2.0 and PTWNo.
This model explained approximately 17% of the variability in financial literacy.
Figures
Figures33and
and44show
showthethesuccess
successrate
rateofofstudents
studentsinin
the financial
the literacy
financial test
literacy depending
test depend-
on
ingthe
oneducation of their
the education parents
of their and their
parents family’s
and their economic
family’s economicbackground.
background.
Figure 3. Success rate of students in the financial literacy test depending on the parents’ education.
The variable FatherEdu in Model B was not statistically significant, but in Models C
and D it was statistically significant at the level of significance 0.05. If the father had a
tertiary education, students had better results by 4.69 and 4.45 percentage points in Mod-
els C and D, respectively, than students whose father did not have a tertiary education.
The MotherEdu variable was not statistically significant in any of the models where it was
Figure 3. Success rate of students in the financial literacy test depending on the parents’ education.
Figure 3. SuccessB–D).
used (Models rate of students in the financial literacy test depending on the parents’ education.
tertiary education, students had better results by 4.69 and 4.45 percentage points in Mod-
els C and D, respectively, than students whose father did not have a tertiary education.
The MotherEdu variable was not statistically significant in any of the models where it was
used (Models B–D).
Figure 4.
Figure 4. Success
Successrate of students
rate in the
of students in financial literacy
the financial test depending
literacy on the family’s
test depending on theeconomic
family’s
background.
economic background.
tertiary education, students had better results by 4.69 and 4.45 percentage points in Models
CFigure
and D, respectively,
4. Success rate of than students
students in the whose
financialfather did
literacy testnot have a tertiary
depending education.
on the family’s The
economic
MotherEdu
background. variable was not statistically significant in any of the models where it was used
(Models B–D).
IncFamLess1500 was statistically significant in all three Models B, C, and D. Students
with a family income of up to 1500 € performed worse on the financial literacy test than
students with a family income of 1500 € to 3000 €, ranging from 5.8 percentage points in
Model B to 4.5 percentage points in Model D. PocMonupto60 was statistically significant
in Models B and C. If students received pocket money of more than 60 € per month, they
performed approximately 5 percentage points better than students with a smaller amount
of pocket money. The PTWNo variable was statistically significant in all three Models B,
C, and D. Students who had no side income scored approximately 6.6 percentage points
lower than students who had part time work.
Model C contained fourteen explanatory variables, with the variables CityPopless10000,
CityPopmore30000 and LivingHome added to the variables from Model B. Variables CityPop-
less10000, CityPopmore30000 were statistically significant at the level of significance 0.05.
performed approximately 5 percentage points better than students with a smaller amount
of pocket money. The PTWNo variable was statistically significant in all three Models B,
C, and D. Students who had no side income scored approximately 6.6 percentage points
lower than students who had part time work.
Model C contained fourteen explanatory variables, with the variables CityPo-
J. Risk Financial Manag. 2023, 16, 252 pless10000, CityPopmore30000 and LivingHome added to the variables from Model B.12 of 20
Vari-
ables CityPopless10000, CityPopmore30000 were statistically significant at the level of sig-
nificance 0.05. This model explained approximately 19% of the variability in financial lit-
eracy.
This Students
model livingapproximately
explained either in small 19%towns ofwith less than 10,000
the variability inhabitants
in financial or Students
literacy. in larger
cities with
living eithermore thantowns
in small 30,000with
inhabitants
less thanhad betterinhabitants
10,000 financial literacy results
or in larger by an
cities average
with more
of 6 percentage
than points than
30,000 inhabitants had students living in
better financial a city results
literacy with a population
by an averageof 10,000 to 30,000.
of 6 percentage
The LivingHome
points than studentsvariable
livingwas
in anot
citystatistically significant
with a population in anytoof
of 10,000 the models.
30,000. Figure 5
The LivingHome
variable
shows the was not statistically
success significant
rate of students in thein financial
any of the models.
literacy testFigure 5 shows
depending onthe
thesuccess
demo-
rate of students
graphic factors.in the financial literacy test depending on the demographic factors.
Figure5.5. Success
Figure Success rate
rate of
of students
students in
in the
the financial
financial literacy
literacy test
test depending
depending on
on the
the demographic
demographic factors.
factors.
Thefourth
The fourthModel
ModelDDcontained
containedtwenty
twentyexplanatory
explanatoryvariables,
variables,with
withthethevariables
variablesInfo-
In-
foFamily,
Family, ServDCard,
ServDCard, ServCCard,ServIB,
ServCCard, ServIB,BorrowMoney,
BorrowMoney,andandDonotbuy
Donotbuyadded
added to to the variables
fromModel
from ModelC. C.Variables
VariablesInfoFamily,
InfoFamily, ServCCard,
ServCCard, ServIB
ServIB were statistically significant at the
levelof
level ofsignificance
significance 0.05,
0.05, and
and Donotbuy
Donotbuy was statistically
statistically significant
significant at
at the
the level
level of
of signifi-
signifi-
cance0.01.
cance 0.01. This
This model explained approximately 28% of of the
thevariability
variabilityininfinancial
financialliteracy.
literacy.
J. Risk Financial Manag. 2023, 15, x FOR PEER REVIEW
Figure
Figure 66shows
showsthe
the success
success rate
rate of
of students
students in the financial literacy test depending 13 of on
21
thetype
the typeofofservices
servicesused
usedbybystudents.
students.
Figure6.6.Success
Figure Success rate
rate of
of students
students in
in the
the financial
financial literacy
literacy test
test depending
depending on
on the
the type
type of
of services
services used
used
by students.
by students.
Studentswith
Students withtheir
theirfamily
familyasas their
their primary
primary financial
financial literacy
literacy agent
agent performed
performed 3.773.77
per-
percentage points better than students who had another primary source
centage points better than students who had another primary source of information. Stu- of information.
Students
dents whowho
usedused a credit
a credit cardcard performed
performed 5.47 percentage
5.47 percentage points points
worseworse
than than students
students who
whonot
did did not
use useand
one, one,conversely,
and conversely, students
students whointernet
who used used internet
banking banking had
had 4.18 4.18 per-
percentage
centage
points points
better betterthan
results results than students
students who did who
notdid
usenot
it.use it. Students,
Students, whosewhose answer
answer to
to the
the question,
question, “If you
“If you wantwant to buy
to buy a product
a product but don’t
but don’t havehave
enoughenough money,
money, whatwhat would
would you
you do?”, was: “I won’t buy it.”, had 5.20 percentage points better financial literacy results
than students who did not choose this answer.
The parameter estimates of all four regression models along with 95 percent confi-
dence intervals are shown in the Figure 7. The robustness of computational models can
also be seen in this figure.
by students.
Students with their family as their primary financial literacy agent performed 3.77
percentage points better than students who had another primary source of information.
Students who used a credit card performed 5.47 percentage points worse than students
J. Risk Financial Manag. 2023, 16, 252 who did not use one, and conversely, students who used internet banking had 4.18 13 of 20
per-
centage points better results than students who did not use it. Students, whose answer to
the question, “If you want to buy a product but don’t have enough money, what would
you do?”,
do?”, was: was: “I won’t
“I won’t buyhad
buy it.”, it.”,5.20
hadpercentage
5.20 percentage
pointspoints
betterbetter financial
financial literacy
literacy resultsresults
than
students who did
than students who not
didchoose this answer.
not choose this answer.
The
Theparameter
parameterestimates
estimates ofof
allall
four regression
four models
regression along
models withwith
along 95 percent confidence
95 percent confi-
intervals are shown
dence intervals are in the Figure
shown in the 7.Figure
The robustness of computational
7. The robustness models can
of computational also can
models be
seen in this figure.
also be seen in this figure.
Figure7.7.Parameter
Figure Parameterestimates
estimatesfor
forall
allTobit
Tobitregression
regressionmodels.
models.
4. Discussion
The main goal of this research was to identify the factors that most influence the level
of financial literacy and to assess the magnitude of their influence using Tobit regression
analysis. In this part, the validity of the stated hypotheses will be evaluated.
HGender : The gender factor has a statistically significant impact on the financial
literacy level.
The results of this research are consistent with most previous studies. On average,
women performed 8.41 percentage points worse on the financial literacy test than men.
Similar results were shown in a study by Lusardi et al. (2009), in which a gap of 13% in the
correct response rate to the questions of inflation and risk diversifications was found. In ad-
dition, Bhushan and Medury (2013) reported that women’s mean score was about 10% lower
than men’s. However, further research shows that these differences are not so clearcut.
For example, in terms of money management, Sachitra and Wijesinghe (2018) argued that
women performed better in money management than men. Falahati et al. (2011) demon-
strated statistically significant better results for women in financial management. Similarly,
female students’ spending behaviour was safer than that of male students, but on the con-
trary, men’s financial management in savings was significantly better. Agnew et al. (2018)
demonstrated another significant gender difference. If girls were under parental supervi-
sion, they spent 200% more pocket money compared to parents not being present. However,
this difference did not exist for boys.
Despite the three studies mentioned, the majority of research has shown that women
have a statistically significant lower level of financial literacy. As early as 2012, the G20
Leaders’ Declaration recognised the need for women to gain access to financial services
and financial education and asked their partners—OECD and the World Bank—to identify
barriers women may face and call for a progress report to be delivered by the next Sum-
mit (Alliance for Financial Inclusion 2012). In addition, the OECD launched the Gender
Initiative in 2010 to examine existing barriers to gender equality in education, employ-
ment, and entrepreneurship in order to improve policies and promote gender equality
in the economies of OECD countries. However, this study—together with other stud-
ies mentioned—indicates that these long-term initiatives are not yet providing expected
outcomes, as also indicated by the findings of this study.
HSecondaryeducation : The secondary education factors have a statistically significant

impact on financial literacy levels.
Research published so far has shown a relationship between students’ level of educa-
tion and their level of financial literacy. For example, Chen and Volpe (2002) found that
education, class ranking, and experience had a statistically significant impact on financial
literacy. Amagir et al. (2020) showed that Netherland students on the lowest track in high
school had lower levels of financial literacy. In addition, Lusardi et al. (2009) concluded
that education attainment was a clear and strong determinant of financial literacy. More
specifically, Lusardi and Mitchell (2009) stated that financial literacy is closely related to
the mathematical skills required at a young age. Rudeloff (2019) proved that interest in
economics, education aspirations, and mother language grade were positively correlated
with students’ financial literacy. In addition, the goal of Sabri et al. (2010) was to exam-
ine the financial literacy of Malaysian university students depending on their academic
ability. However, their research did not yield statistically significant results. In addition,
Ansong and Gyensare (2012) showed that the level of study was not significantly correlated
with financial literacy.
This research has shown that secondary education has a statistically significant positive
effect on the level of financial literacy, with a difference of 9 to almost 12 percentage points.
This research also examined the dependence of financial literacy on the type of sec-
ondary school attended. Students studying at vocational and business schools had worse
financial literacy scores, from 4.3 percentage points to 6.2 percentage points, than students
studying at grammar schools. On the contrary, the results of Kozina and Ponikvar (2014)
suggested that the likelihood of students’ confidence in their financial management capa-
bility and knowledge was significantly higher for students that did specialize in economics
or business studies.
These results suggest that the level of financial literacy cannot be separated from the
overall students’ level of education. Financial literacy should not be viewed as a standalone
subject, but rather as an integral aspect of the broader educational process. Students do not
only have to acquire knowledge in the field of finance in classes specifically dedicated to
financial literacy, but also in other lessons. We consider this to be a key factor leading to an
improvement in financial literacy in Slovakia.
HFamilyeconomicbackground : The family’s economic background factors have a statistically
significant impact on financial literacy level.
This research confirmed the impact of the family’s economic background on the level
of financial literacy. It turned out that the highest achieved education of the father had
a statistically significant effect in the two models, while the influence of the mother’s
education was not statistically significant in either model. Similarly, previous research has
yielded ambiguous results. According to Lusardi and Mitchell (2009), parental education
was a strong predictor of financial literacy: if a mother graduated from university, the
likelihood of correctly completing the test was almost 5 percentage points higher. More-
over, Lusardi et al. (2009) showed that the mother’s education was strongly associated
with financial literacy: respondents whose mothers graduated from college had correct re-
sponse rates about 19 percentage points higher for the inflation question and 18 percentage
points higher for the risk diversification question. Conversely, Ansong and Gyensare (2012)
showed that the mother’s education was positively significantly correlated with respon-
dents’ financial literacy, while the father’s education was not. Amagir et al. (2020) also
found that the mother’s university education had a positive effect on the financial literacy
of 15-year-old students in the Netherlands.
It concludes that most studies have shown the impact of parents’ education on their
children’s financial literacy, but with inconsistent conclusions. The mechanism of knowl-
edge transfers between parents and their children, which may differ from country to
country due to different cultural and social stereotypes, has not yet been precisely explored
and explained.
This research showed that students from families with the lowest incomes (up to
1500 €) have a statistically significant lower level of financial literacy by about 5 percentage
points compared to wealthier families. However, other differences did not appear to
be statistically significant. Lusardi and Mitchell (2009) showed that a family’s financial
sophistication played an important role. Students whose parents owned stocks were
over 7 percentage points more likely to answer the risk diversification question correctly.
Furthermore, students whose parents had retirement savings were 6 percentage points more
likely to answer correctly. Similarly, Lusardi et al. (2009) concluded that the differences
in a family’s financial sophistication resulted in the differences in correct response rates
to the inflation and risk diversification questions by at least 11 percentage points in both
questions—and these differences were statistically significant. It is apparent that students
acquire financial literacy not only through school, but especially through their own life
experience, where the family plays an important role.
Other research focused on the student’s income rather than the student’s family’s in-
come. Therefore, factors describing students’ income were included in this research—pocket
money or money from a part-time job. In this research, it turned out to be important
whether the student had part-time work, and not how big their income actually was.
Chen and Volpe (2002) and Sachitra and Wijesinghe (2018) also indicated that work experi-
ence and working hours had a statistically significant effect on financial literacy. On the
contrary, Rudeloff (2019) did not find the impact of part-time jobs on financial literacy.
This research further showed that students with higher amounts of pocket money
achieved a level of financial literacy 5 percentage points higher on average. Sohn et al. (2012)
also demonstrated that monthly allowance was related with financial literacy. Our research
showed that students with an average amount of pocket money (20 € to 100 €) had a higher
financial literacy level than students with an amount of pocket money below 20 € or over
100 €.
This research has clearly confirmed that students who have part-time jobs have a
higher level of financial literacy than students without experience with part-time jobs.
At the same time, it turns out that it does not matter how large the amount of income
is. Student work requires better time management, knowledge of employment contracts,
taxes, social security, and health insurance. These experiences increase students’ general
economic knowledge, which is likely to have a positive effect on their level of financial
literacy. Simultaneously, it turned out that the more money students had, the better their
financial literacy. This correlation was statistically significant, but it is not easy to determine
the direction of this correlation. It is possible that students with higher income want to
manage money better and therefore educate themselves in this area. On the contrary, it
is possible that students with a higher level of financial literacy can better manage their
money and increase their savings. It is likely that these two factors interact, though.
HDemographicfactors : The demographic factors have a statistically significant impact on
the financial literacy level.
Slovakia is a small country with a population of just over 5.4 million. Only two cities
in Slovakia have over 100,000 inhabitants, and most cities have only a few tens of thousands
of inhabitants. This research showed that students living either in small towns with less
than 10,000 inhabitants or in larger cities with more than 30,000 inhabitants had better
financial literacy results by an average of 6 percentage points than students living in a city
with a population of 10,000 to 30,000. The national testing from 2018, carried out by the
Ministry of Education among primary school students, confirms the large differences in
educational outcomes between districts and regions (European Union 2018).
This research shows that secondary schools with the highest quality of education in
Slovakia are located in larger cities. Since previous sections of this research have shown
that the level of financial literacy is related to the overall level of education, it can be argued
that knowledge in the field of financial literacy is also higher in large cities. Secondary
schools are not located in small towns, so rural students complete secondary education in
large cities. As a result, rural students also perform better in the area of financial literacy.
The geographical factor has been the subject of a small amount of research. A survey
by Bhushan and Medury (2013) found that the financial literacy level did not depend on
the geographical region. However, the same research has shown that the level of financial
literacy was affected by the geographical location of work location. If the work was per-
formed in an urban area, respondents demonstrated a level of financial literacy 5 percentage
points higher than if it was performed in a rural area. This dependence, however, was not
confirmed by the research of Ansong and Gyensare (2012), which concluded that work
location was not significantly correlated with financial literacy.
The student’s place of residence during university did not prove to be a statistically
significant factor influencing the level of financial literacy in our research. This relation
was also discussed by Sabri et al. (2010), where a statistically significant negative effect of
staying on campus on the level of financial literacy was demonstrated. Remarkably, this
factor proved to be the second most important in their research.
HEconomicbehaviour : The students’ economic behaviour has a statistically significant
impact on financial literacy levels.
Many studies—for example (Jamal et al. 2015; Setiyani and Solichatun 2019)—have
suggested that the influence of family and friends, and in some cases the influence of the
media and other opinion formers, can have a significant impact on the level of financial
literacy. This hypothesis was confirmed by our research, which concluded that students
whose family is their primary financial literacy agent outperformed students who had
another primary source of financial literacy information by 3.77 percentage points. Research
by Sabri et al. (2010), which examined the impact of interviews on the finances of children of
different ages with parents, brought similar conclusions. Interviews with children had the
third largest impact on the level of financial literacy. Similarly, research by Jamal et al. (2015)
detected the influence of the family as the most powerful and significant factor influencing
the level of financial literacy of Malaysian students. At the same time, this study stated
that the second most powerful factor were peers and friends. In contrast, Sohn et al. (2012)
confirmed in their research that those who chose the media as their primary agent of
financial socialisation reported a higher level of financial literacy than those who had
the family as their primary agent. The findings of our research are in line with previous
studies, as they all came to the conclusion that the influence of parents is the key to better
financial literacy for their children. Therefore, parents should discuss their family’s finance
management with their children, encouraging them to save from an early age. It is also
important for parents to show positive financial behaviour and to be a role model for their
children in managing their finances. It turns out that friends and the media also have a
positive effect on financial literacy, but these factors are more difficult to control.
We assumed that the use of banking products increases the level of financial literacy,
because students practically encountered concepts that they previously knew only theoret-
ically. The use of debit and credit cards, a bank account, and internet banking therefore
appear to be factors that should positively influence the level of financial literacy. However,
the research on this topic is inconclusive. Sohn et al. (2012), showed that the possession
of a bank account was positively related to financial literacy, but Sabri et al. (2010) did
not find that owning a saving account was positively correlated with financial literacy.
Sachitra and Wijesinghe (2018) also analysed how using a credit card and performing online
transactions affected their money management and economic, social, and psychological
factors. The impact of credit card usage was not statistically significant, but performing
online transactions had a statistically significant positive effect on money management and
economic factors.
Our research has also yielded mixed results. The use of a debit card was not a
statistically significant predictor of financial literacy. Students who used the credit card
performed 5.47 percentage points worse than students who did not use it. In Slovakia,
the term “credit card” is often incorrectly used instead of “debit card”. Moreover, very
often these two terms are used interchangeably, although it is obvious that a credit card is a
type of loan. In the Slovak Republic, the loan is provided only to people with permanent
employment, and therefore, students usually do not have credit cards. Thus, it can be
assumed that most students who claimed to use a credit card did not understand the
difference between a credit card and debit card. This misunderstanding also points to the
fact that the level of financial literacy of Slovak students is low.
In line with the hypothesis HEconomicbehaviour , students who used internet banking had
better results than students who did not use internet banking by 4.18 percentage points.
The students were also introduced to a model situation that addressed their risky be-
haviour. Students who did not show a hazardous attitude toward money management had
better financial literacy results by 5.20 percentage points. Similarly, Gutter and Copur (2011)
evaluated the impact of risky usage of a credit card on the financial literacy of college stu-
dents. They concluded that students who made late payments on their credit cards and did
not pay their credit card balance each month had a significantly lower level of financial
literacy than students who paid their credit card balance in full each month. Contrary to
other research, Popovich et al. (2020) showed that attitudes are more debt-tolerant after
the intervention.
5. Conclusions
A modern financially literate person is familiar with the concept of money and prices,
and responsibly manages their financial budget in terms of future developments and chang-
ing life situations. Financial services are among the fastest growing industries, providing
an increasing number of products and services on a daily basis. This trend is also supported
by technological progress, the development of electronic services, and improvements in the
availability of the services offered. However, for some customers, many of the products
and services offered are complex, and they are unable to use them effectively.
To ensure the development of financial literacy, financial education alone is no longer
enough for individuals to adjust their financial behaviour in an appropriate way. For
effective education in the field of financial literacy, it is necessary to develop standardised
techniques for its measurement and tools for assessing the effectiveness of financial educa-
tion programs. At the same time, it is necessary to analyse in detail the factors that affect
the level of financial literacy of the population in the long run.
The current system of education in the field of financial literacy shows signs of sig-
nificant inequality in the field of gender, socioeconomic, demographic, and psychological
indicators. To increase the overall financial literacy of the population, it is necessary to
eliminate these disparities.
According to previous research, a variety of socioeconomic factors determine personal
financial literacy. An important finding of this research is the identification of characteristics
influencing financial literacy. The most important factors were the gender of the students,
their high school performance, the type of high school attended, whether they had part-time
work, and the city size in which the students lived. In many ways, the results of this research
confirm the findings of previous research, but this research also reveals new correlations.
Consistent with other studies, this research shows a relationship between students’
levels of financial literacy and their overall learning outcomes. In addition, this research
has shown that the level of financial literacy is also influenced by the type of secondary
school they attended. This confirms that the curriculum and its complexity can significantly
increase the level of financial literacy. A significant benefit of this research is the finding
that students who did not have part-time work had lower financial literacy. This seems to
be evidence that acquiring practical experience and the associated financial responsibilities
are also an important source of financial knowledge. This research also revealed another
important factor influencing the level of financial literacy, which is the population of the
city in which the students lived. This fact is probably caused by a large variance in the
quality of education between regions in Slovakia.
Furthermore, the purpose of this study was to determine if a student may improve
their financial literacy between the ages of 15 and 19 and what factors impact this. As
a result, we included variables in the regression analysis that reflected young people’s
increasing familiarity with banking services and financial management. Research has
shown that students who have more experience managing their own finances—which
they received either from their parents as pocket money or earned through part-time
jobs—have better results in financial literacy. Regular experience with banking services
(such as internet banking and debit cards) also increases the level of financial literacy. It
implies that young people’s financial literacy can improve as their own experience with
money grows. However, these factors only complement other determinants, such as their
education and family influence.
This research was carried out in the school year 2019/2020, and since the participants
in the research were only first-year undergraduate students, it would be appropriate to
repeat the research with a new sample of students. It will be interesting to see whether
pandemic restrictions, distance learning, and the rise of electronic and digital services have
changed students’ financial behaviour and knowledge.
Research suggests that educating students (including in the field of financial literacy)
should start as soon as possible so that children can develop the right financial habits at an
early age. The aim of future research will be to determine the impact of university studies
on the level of financial literacy. It will also be important to monitor if the knowledge in
the field of financial literacy is changing due to the growing number of new technologies.
According to Morgan et al. (2019), the concept of Digital Financial Literacy and the need to
develop digital financial education programs and skills also come to the fore. Appropriate
tools need to be designed to develop programs to support digital financial education, as
well as special programs for vulnerable groups, including older people, women, and the
less educated.
The study sought to determine whether there is an increase in financial literacy be-
tween the 15th and 19th years of a student’s life. However, the limiting factor is that when
comparing the results, the statistical sample is not the same, and thus it is not possible
to directly compare the levels of financial literacy, but only the statistical significance of
particular determinants. Research shows the importance of financial literacy socialisation
agents, but in this research, we identify only the primary source of financial socialisation.
More detailed research in this area could bring more accurate information about this type
of relationship. Additionally, only Slovak students participated in the research. Currently,
however, more and more foreign students are starting to study at Slovak universities. It
would be appropriate to include them in further research and also examine financial literacy
in the context of cultural background differences.
Author Contributions: P.B.: Methodology, software, validation, formal analysis, data curation,
writing—review and editing, visualisation. G.B.: methodology, validation, writing—original draft.
J.G.: conceptualisation, methodology, validation, investigation, resources, writing—review and
editing. V.Š.: conceptualisation, investigation, writing—original draft. All authors have read and
agreed to the published version of the manuscript.
Funding: This research received no external funding.
Institutional Review Board Statement: Ethical review and approval was waived for this study
due to de-identified information about participants and the fact that anonymity and privacy were
guaranteed at every step of the study.
Informed Consent Statement: Informed consent was obtained from all subjects involved in the study.
Data Availability Statement: Data will be made publicly available on the Open Science Framework
upon publication.
Conflicts of Interest: The authors declare no conflict of interest.
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Citation: Böhm, Patrik, Gabriela

J. Risk Financial Manag. 2023, 16, 252. https://doi.org/10.3390/jrfm16040252 https://www.mdpi.com/journal/jrfm

Slovakia OECD average

Figure 1. Results of PISA testing 2012, 2015, and 2018.

2. Materials and Methods

Table 1. List of variables studied in previous research.

Table 2. List of research hypotheses.

Table 3. Sociodemographic characteristics of the sample.

Variable Options Share (in %)

Table 4. Control variables used in the Tobit regression model.

Control Variable Acronym Value (Encoding)

Table 5. Overall success rate—descriptive statistics.

Students Min Max Median Mean SD

HSecondaryeducation : The secondary education factors have a statistically significant

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