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How Financial Literacy Shapes Student Financial Behavior

By Dr. Ieva Bužienė | February 4, 2026
Case Studies | Economics and Finance | Research Reviews

Introduction

Financial literacy plays a significant role in shaping student financial behavior, although its effects are nuanced and influenced by various demographic, socioeconomic, and attitudinal factors. Research consistently shows that university students tend to exhibit relatively low levels of financial literacy. Gender, field of study, and family income significantly influence financial knowledge and behavior: male students studying business and those from higher-income backgrounds generally display higher levels of financial literacy, while female students and individuals from lower-income households show lower literacy levels. These findings underline the need for targeted educational interventions that promote financial inclusion and foster sound financial attitudes early in life [1].

Financial Attitudes, Digital Tools, and Behavioral Outcomes

The relationship between financial literacy and financial behavior is also shaped by students’ financial attitudes and their use of digital financial tools. Studies show that female students demonstrate stronger spending attitudes yet may also possess relatively high financial literacy levels compared to their male peers. Students relying primarily on pocket money tend to exhibit better financial behavior than those earning income from part-time jobs or gifts.

Digital tools—including budgeting apps and financial information on social media—positively influence both financial knowledge and behavior. This suggests that integrating technology into financial education initiatives may enhance students’ ability to make informed financial decisions [3].

Experimental studies on financial education show mixed results. While educational interventions can improve financial attitudes and literacy, they do not always translate into improved financial behavior. For instance, increased financial knowledge does not consistently reduce impulsive buying or increase savings. Furthermore, female students often report lower confidence and interest in finance, which may affect how they respond to financial education programs [4].

Similarly, some research questions the long-term effectiveness of financial literacy courses in high school, as no significant differences were found between students who completed such courses and those who did not [2].

Despite these limitations, financial literacy generally has a positive effect on student financial behavior. However, financial technologies may sometimes have a negative impact, creating a complex interaction between knowledge and the tools used to manage finances [5].

Classroom Experiment: Methodology

To verify the findings identified in the scientific literature review, an experimental study was conducted in November 2022 during the Financial Theory course at Vilnius University Business School. A total of 18 students participated.

Students were first instructed to meticulously track their weekly expenditures. They were then presented with a series of scenarios related to investment and consumption decisions, requiring them to make choices within a controlled experimental environment.

Based on the proportion of monthly income allocated to weekly expenses, students were divided into the following categories:

Conservative spendersSpending between 12% and 23% of monthly income
Upper mediumSpending between 27% and 36% of monthly income
Risk loversSpending between 37% and 87% of monthly income
Table 1. Grouping the sample * (compiled by authors)

The primary objective of this classroom experiment was to determine students’ financial knowledge, financial attitudes, and entrepreneurial intentions. Because of the study’s small sample size, its conclusions cannot be generalized to the entire youth population of the country. However, the results offer a valuable starting point for future scientific and societal research and point to several meaningful trends.

Key Findings

The results highlight several important insights regarding the financial behavior of young individuals:

Gender Differences

Clear gender differences were observed in financial decision-making:

Impact of Financial Resources

As students’ available financial resources increased, they became more cautious:

Role of Income Levels and Risk Tolerance

Income level and risk tolerance significantly shaped students’ financial choices:

Conclusions

Overall, financial literacy does shape student financial behavior, but its influence is heavily moderated by:

Both literature and experimental findings demonstrate that while financial education improves knowledge, it does not automatically lead to better financial behavior —particularly regarding impulsive spending or long-term investment decisions.

The classroom experiment conducted at Vilnius University Business School further confirms that students’ income and risk tolerance play critical roles in how they make spending decisions, with many becoming more cautious as their resources grow.

References