Abstract
This study investigates how psychological traits affect financial literacy levels at the undergraduate level of education. Using a cross-sectional survey of 580 students, the study examines whether the level of openness, conscientiousness and cognitive ability of students affect how financially literate they are. The Pearson’s Correlation Test and Ordinary Least Square Regression methods are employed to test hypothesized relationships. The results show a generally low level of financial literacy. Further, openness, conscientiousness, and cognitive ability were found to have a statistically significant correlation with financial literacy (r=0.349, 0.287 and 0.199 respectively). Similarly, the regression analysis found a positive relationship between all three variables and the dependent variable (financial literacy). Therefore, the study recommends that innovative financial literacy programmes that target the youth need to be introduced. It is imperative that these programmes have components that are tailor-made for individuals with different personality traits to attract them. Finally, the programmes must contain aspects which aim to improve the cognitive abilities of the beneficiaries to increase their effectiveness.
Highlights
Several antecedents and moderators of financial literacy have been probed over the past decade
There was an even distribution of the respondents in respect of the other levels
Of the six colleges in KNUST, most respondents were from the College of Humanities and Social Sciences (34.1%, 198) whereas least of the respondents were from the College of Art and Built Environment (12.4%, 72)
Summary
Several antecedents and moderators of financial literacy have been probed over the past decade. Common among these factors are gender, age, educational background, length of time of holding a bank account, parental wealth, academic discipline, work experience, financial market involvement, income and money attitude (Cameron, Calderwood, Cox, Lim, & Yamaoko, 2014; Albeerdy & Gharleghi, 2015; Mireku, 2015). The connection between traits such as self-confidence, motivation, and willpower and an individuals' financial literacy have been explored (Benaboa & Tirole, 2002; Arellano, Camara, & Tuesta, 2014). The findings of such research show that respondents with positive personality traits such as self-confidence were likely to respond positively to financial education because of their perceived ability to excel at it. The results of such studies go to show that individuals exhibiting high levels of self-confidence and willpower recorded higher levels of rational financial behaviors than other respondents with less of these traits
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