Financial literacy: Are young adults well equipped to face the current economic world?
ABSTRACT FRANCISCA A. RAMONI FINANCIAL LITERACY: ARE YOUNG ADULTS WELL EQUIPPED TO FACE THE CURRENT ECONOMIC WORLD? DECEMBER 2018 Previous studies focused on college students and the misuse of credit cards. This study focused on the importance of financial literacy to the well-being of young adults. This study examined the overall financial literacy of young adults using quantitative data from a diverse sample. The sample of 150 young adults was obtained from four faith-based churches in the Dallas Fort Worth Metropolitan area. The population group was limited to 18-25 years of age, who had just finished (a) high school and entering college or attending college, (b) never married, and (c) no dependents. The data were collected using a financial literacy questionnaire. Specifically, the study examined financial knowledge, financial influences, financial attitudes, and financial behaviors as compared by gender and income. Social learning theory, theory of consumer socialization and financial socialization were used to explore this study. The study utilized two instruments a comprehensive questionnaire from the Organization for Economic Co-Operation and only one section of the College Students’ Financial Literacy Survey (CSFLS). The Young Adult Financial Literacy Questionnaire is inclusive of two survey instruments which was organized by the researcher and included Development/International Network on Financial Education (OECD/INFE) questionnaire was designed to measure financial behavior, knowledge, and attitudes, while the College Students’ Financial Literacy Survey (CSFLS) was designed to measure the influences that may affect young adults’ financial literacy. The findings of this study found no significant differences between attitudes and behaviors as compared by gender and income. However, the study found micro-level influences of financial knowledge, parental influence, financial documents, and financial goals specifically with gender. Females were more likely to have a higher financial knowledge while males were more likely to have a budget. Females were more likely to have higher financial knowledge while males were more likely to have a budget. Both females and males reported that they kept receipts/copies of financial documents such as major purchases, minor purchases, bank statements, housing, rent or mortgage payments and tax records. The results of the study provided recommendations about promoting financial literacy by parents, educators, policymakers, and financial professionals.