Chapter 12: Spending Behaviours among College Students from B40 Households

Abstract

Transforming from relying on parents to being independent financially, there seems to be a habit that is maintained by the United States young adults throughout their lives (Jorgensen, 2016). Arnett (2000) proposed how emerging adulthood are those in between the age of adolescence and adulthood which tend to become more independent as time passes by. Majority of them are still considered as students regardless of where they are; colleges or universities are also called as the backbones of the country. The term, financial literacy no longer feels unfamiliar these days but instead becomes very common especially in the economic and finance studies (Yıldırım et al., 2017). The definition of financial literacy varies according to the context of knowledge but the importance of it is definitely the same for all and that is to avoid financial damages in any financial decisions making. Without fully understanding on the basic financial concepts, individuals are not mentally prepared to make decisions related to financial management such as in the terms of saving, investing and borrowing because of being illiterate (Kimiyaghalam, 2017). Developing financial habits at an early stage prevents one from overspending, unnecessarily buying items and even paying too much for an item. The ability of tackling one’s own money and manage them properly in order to avoid financial issues is also a demanding assignment or duty for the students (Baharuddin, 2016).