Abstract:
In recent times, financial literacy has become increasingly important. This is true for a
number of reasons including the increased number and complexity of financial products
available to the consumer. The problem however is that people around the world appear to
have low levels of financial literacy. Furthermore, existing research finds a number of
variables to be associated with financial literacy however the results are contradictory.
Thus, the objective of this study was to assess financial literacy levels of South African
university students and furthermore identify which variables are associated with financial
literacy of university students. This study surveys 373 students from a single South African
university. Results show that students have moderate basic financial literacy. While
students are found to have low levels of sophisticated financial literacy, overall, students
are considered moderately financially literate. Self[assessed financial literacy is also found
to be a proxy for financial literacy. A univariate analysis reveals that a number of factors
were found to significantly influence the overall financial literacy of students. In summary,
the variables found to be significantly associated with basic financial literacy scores of
students were gender, race, previous finance course, faculty of study, perceived socio[
economic status and money management. The variables significantly associated with
sophisticated financial literacy score are gender, race, previous finance course, faculty of
study, mother s education and father s occupation. Lastly, the variables significantly
associated with total financial literacy score were gender, race, previous finance course,
faculty of study, father s occupation and perceived socio[economic status. Logistic
regression was used to analyse variables in a multivariate context. The purposeful method
was used to select variables for the logistic regression. The variables race, faculty of study
and previous participation in a finance course were found to be significant determinates in
overall financial literacy of students in a multivariate model. This study contributes to the
existing research that finds students to have overall moderate levels of financial literacy.
Furthermore, this study adds to the existing research that finds a number of demographic
variables to be associated with financial literacy in a multivariate context.
