Money Management Behaviors of Traditional-Aged College Freshmen and Sophomores: a Qualitative Study

Abstract

The purpose of this study was to explore how students manage their financial resources. Data consisted of student records of their expenditures and income over a one month period of time, reliable financial documents provided by the respondents (i.e., checkbook registers, credit card statements), and individual interviews. This study was designed to gain a better understanding of the financial behaviors of college students at a large, public, research university. Specifically, this study was designed to explore the following research questions:

How do traditional-aged, lower-division college students manage their financial resources? What are the financial management behaviors of freshmen versus sophomore on-campus students? What are the financial management behaviors of on- versus off- campus sophomore students?

A stratified purposeful sample of 17 traditional-aged freshman and sophomore students was selected for study. Students who transitioned directly from high school to college were considered traditional-aged students. Students who were in their first or second year of college were considered to be freshman or sophomore students, respectively. The data were analyzed for two purposes. The first purpose was to understand where participants spent their money, on what kinds of items, and their sources of income. This information was collected through a qualitative analysis of documents. The second purpose was to understand how and why the participants made the financial decisions they did during the period under study, and to gain an understanding of their larger financial situations. This information was collected through a qualitative analysis of individual interviews. The results of this research contributed to both practice and research. In terms of practice, the results of this study informed three constituencies. Student affairs professionals might use the results to develop programs and services that assist students in managing their financial resources while in college. Students might benefit from the results by identifying management behaviors to employ, and those to avoid. Parents of traditional-aged students might benefit by assisting their students with management skills before they matriculate. Future researchers might elaborate on the present study and examine financial management skills in relation to other issues in higher education, such as retention and academic success. Additionally, future researchers might examine financial management education programs and services at campuses nationwide, or further examine financial management behaviors of college juniors and seniors. Results revealed several important findings. First, spending patterns can be traced to developmental issues associated with lower division students. For example, freshmen spend more money on food and entertainment than their sophomore counterparts, suggesting that social adjustment and making friends are important issues for first year students. Second, students from families which discuss financial issues have better money management skills. Third, students do not discuss financial matters outside their families, even with close friends. Finally, students spend as much as five times more than they earn in a month. Coupled with the study's other findings, these results suggest campuses need to provide programs and services related to financial management skills if students are to develop sound personal budgeting skills while in college.