Earlier Financial Literacy and Later Financial Behavior of College Students

Document Type

Journal Article

Publication Date



financial education program delivery, intervention timing, higher education students, financial status and behavior, gender


This study examined the association of earlier financial literacy and later financial behavior of college students. Financial literacy was measured by both subjective and objective knowledge and financial behaviors were categorized into risky paying and borrowing behaviors. Based on data collected at two time points from a panel of college students at a major state university in the U.S., the results showed that the association between earlier knowledge and later financial behaviors differed by the specific type of knowledge (subjective vs. objective), with stronger effect of subjective knowledge, compared to objective knowledge on both composite and individual measures of risky borrowing and paying behaviors. We found that only subjective knowledge was correlated with a reduction in both composite behaviors. Both subjective and objective knowledge, however, reduced some specific risky paying and borrowing behaviors. Finally, we found consistent differences for two of the control variables: higher GPA was associated with fewer risky paying behaviors; and gender (male vs. female) was associated with more of both types of risky behaviors.