DEVELOPMENT AND VALIDATION OF INDICES OF FINANCIAL INTELLIGENCE AMONG A CROSS-SECTION OF A NIGERIAN PRIVATE UNIVERSITY STUDENTS

Abstract

The study described the systematic processes involved in the development and validation of a self-report instrument tagged of Financial (IFI) designed to measure financial intelligence. A total of 250 undergraduate students randomly selected from 100 to 500 levels in a Nigerian private university participated in the study. The participants' age ranged from 15-29 years with mean age of 18.53. Indices of Financial Intelligence scale was used to generate data. The original scale has 34 items that were clustered into three dimensions of spending, saving and giving money. The result of a principal component factor analysis confirmed the three factor theoretical model of the IFI namely, spending, saving, and giving money but with 25 items loading significantly in the three factors combined. The obtained communality ranged from 0.186 to 0.622 while significant correlations between 0.351 and 0.880 were observed between the three factors. A Cronbach Alpha of 0.89 established the IFI as a reliable instrument for assessing the level of financial intelligence among undergraduate university students. Premised on these findings, the IFI appears to be a valid instrument for assessing financial intelligence and is therefore recommended as a tool for financial guidance of young people by psychologists, economists and allied disciplines.