Abstract:
Rapid and dynamic developments and innovations injected to the financial markets
and products, locally and globally has changed the typical dimensions thus increased
the complexity of day to day financial decisions, where a ordinary financial decision
has transformed to be more rational, logical and strategic in nature in the modern
context. Management undergraduates proven to be having an academic appetite to
these changes and conservatively expect to follow these trends to make sensible
financial decisions in their day to day lives. The real question is, Is this a myth? or a
conservative expectation of the society? As an attempt to answer these questions, this
study is an evaluation to underpin 'the relationship between the financial literacy level
and the nature of the financial behavior of undergraduates of Sri Lanka. The sample
selected is 223 management undergraduates. The sampling techniques used is
convenient sample from three main government universities in Sri Lanka. Knowledge
on money management, savings, investment, credit and insurance has been
considered to measure the financial literacy level and undergraduates current and past
manners related to same dimensions is used to measure financial behaviour using
questionnaire. The results suggest that the financial literacy level of the
undergraduates of the three universities was at a moderate level. Multiple Regression
Analysis showed that apart from money management financial literacy level on all
other dimensions has significant positive effect not only on overall financial behavior
but also on individual dimensions. This concludes that financial literacy on Savings,
Investments, Insurance, Borrowing and Credit are valid determinants of financial
behavior of management undergraduates.
