CHAPTER 2: LITERATURE REVIEW
1.0 INTRODUCTION
This chapter is about the literature reviews that have been reviewed based on the research
topic. Literature is a report of a compilation and review means is in written forms on the research
topic which write by those people with authority in the field. In this study, I want to find out the
causes of student finance problems based on various resources such as book, newspaper article,
website or magazine. So, by using all of the resources I can find more information about the
causes of student finance problems and also provide some opinion about the situation.
As we know, majority of students receive their scholarship or education loan at the
beginning of each semester. So, they not have any problem at the beginning semester compare
with last of each semester. Based on “Financial Behavior and Problems among College Students
in Malaysia: Research and Education Implication” by Mohamad Fazli Sabri, there are many
causes about student finance problems such as parent’s marital status and educational level,
family income, sibling rank, types of college, residence and education fund (Mohamad Fazli
Sabri et al, 2008).
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2.0 CAUSES OF STUDENT FINANCE PROBLEMS
2.1 UNNECESSARY THINGS
Today, we know that majority of students have money from their scholarship and
education loan for each semester with cash and in a big amount. So they have a problem for
planning their finance with more efficiently. It is because for each semester, they have many
things for use in their study such as reference book, fees and more.
The finding is supported by Mohamad Fazli Sabri et al (2008), “more than half of the
respondents did not save any money when they received their scholarship or education loan.
More than half of the students used their money for shopping. About 45% of them spent all their
money before the end of the semester; 17% of students gifted some money to their family, and
13% used their money to repay debts”. My opinion about this situation is student must planning
their finance from the beginning of each semester so that they just using the money for necessary
things”.
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2.2 THE INFLUENCE OF FAMILY MEMBERS
The second causes of student finance problems are family aspect. This is because some
student comes from low income families. Student had gifted some money to their family for help
them from finance crisis. At the same time, this situation can make the student cannot manage
their finance properly because they had to use their scholarship or education loan for another
things. Sometimes, student can’t manage their finance because of a strong family influence. Base
on “College Students and Financial Literacy: What They Know and What We Need to Learn” by
Cude B. J, the influence of family members is important but complex. Most students reported
hearing various messages about money from various family members. Most of the messages
students shared related to controlling spending and avoiding or using credit wisely. In addition,
many were very aware that they and a sibling approached financial management differently and
wanted to be different from or like their sibling, depending on whether the sibling was more or
less responsible. (Cude et al, 2006).
Unlike the research from Cude B. J et al (2006), “the most significant influence on
students’ money management behaviors was their parents (70.0%) reported parents together;
13.0% said mother, 6.0%, father). Few students identified as their most important influence a
brother/sister (1.2%), grandparents (1.9%), and other family relative (1.2%)”. So, student should
manage their finance with using their own opinion and ways. It is because they often influenced
by their family and not confident to make own decision about their finance”.
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In this case, student will lost focus for manage their finance because of family
intervention. The effect of this situation is student will leave their finances managed by family.
For another situation that related with this cause is family problem that can make the student
having a problem in their finance. Mohamad Fazli Sabri et al (2008) clearly has noted, “students
who have college graduate parents, higher family income, only child, tend to spend on more
items, and have no saving were more likely to have financial problems. There is a negative
significant difference between students who have late childhood consumer experience and
financial problems. Also those who have had more financial socialization have fewer financial
problems”.
2.3 FAILED TO MANAGE THEIR FINANCE PROPERLY
The last cause is student failed to manage their finance properly. As we know, student
attitude can give an impact to their finance management. Some student have positive attitude and
another student have negative attitude. Refer to Cude B. J et al (2006), “one conclusion from the
research is that some college students are not managing their finances well, because they have
not adopted the set of recommended practices. Another conclusion is that some “recommended”
practices should be modified to more accurately match ways in which college students
responsibly manage their finances”.
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Student also failed to manage their finance with more efficiently because not prepare to
face some possibility that can giving bad effect to their finance. Base on “Changing College
Students’ Financial Knowledge, Attitudes, and Behavior through Seminar Participation” by
Borden L. M, young adults also may be unprepared to effectively manage the psychological
costs associated with high debt; for example, increased levels of stress and decreased levels of
psychological well-being (Borden L. M. et al, 2008).
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3.0 CONCLUSION
As a conclusion, student should to know about financial knowledge, responsible attitudes
and finding their weakness in finance problem. They must try to manage their finance without
any intervention from outside such as family, friends and more. Others can also help students in
financial management by establishing some of activities that can attract their interest. According to
Cude B. J et al (2006), “other options available to campus administrators include workshops and
seminars, financial counseling centers on campus, peer education, and Internet resources.
However, parents also should to have knowledge about finance management so that can
conduct or discuss with their children. Also refer to Cude B. J et al (2006), “parent’s needs to be
aware of the major role that they play in the financial socialization of their children and that this
process occurs at a very early age. Resources are needed to educate parents about how to
constructively talk to their children about financial management issues”. So, all parties should
cooperate in this matter so that students can focus on their study.
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4.0 REFERENCES LIST
Financial Behavior and Problems among College Students in Malaysia: Research and Education
Implication. Consumer Interests Annual. Volume 54, 2008. Retrieved 2008, from
consumerinterests.org/images/56.SabriMasudHiraMacdonaldPaim.pdf.
Borden L. M, Lee S. A, Serido J, Collins D (2008), Changing College Student’s Financial
Knowledge, Attitudes, and Behaviour through Seminar Participation. J Fam Econ Iss (2008) 29:
23-40. Retrieved November 2007, from www.springerlink.com/index/f69v62227391vr43.pdf
Cude B. J, Lawrence F. C, Machtmes K, Lyons A. C, Metzger K, LeJeune E, Marks L (2006),
College Students and Financial Literacy:What They Know and What We Need to Learn. Eastern
Family Economics and Resource Management Association. Conference (2006). Retrieved 2006,
from http://mrupured.myweb.uga.edu/conf/22.pdf
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RESEARCH QUESTIONS:
What are the causes of finance problem among FSKKP students?
POSSIBLE ANSWER:
The causes of finance problem among FSKKP students are when receiving a scholarship or
education loan, they always buy an unnecessary things, the influence of family members and
failed to manage their finance properly.
Author’s Name
Cude B. J, Lawrence F. C,
Machtmes K, Lyons A. C,
Metzger K, LeJeune E,
Marks L (2006)
Unnecessary Things
The Influence of Family
Failed to Manage their
Members
Finance Properly
In recent years, educators,
The most significant
A number of students
policy makers, and
influence on students’
described using online
university officials have
money management
banking and online access
focused on one aspect of
behaviors was their
to their credit card
college
parents (70.0%
accounts. These students
students’ financial
reported parents together;
were not writing checks or
practices – their use of
13.0% said mother, 6.0%,
balancing checkbooks.
credit, and most
father). Few students
However, they did have
specifically credit cards.
identified as their most
systems for
Increased use of credit
important
checking their bank
cards by
influence a brother/sister
account balances (usually
college students has
(1.2%), grandparents
to avoid over drafting) and
generated a concern
(1.9%), other family
managing their credit card
among many that credit
relative (1.2%) or friend
charges in relation to their
card debt puts college
(1.5%). A small
credit limit
students at greater risk for
percentage (5.2%)
financial problems after
reported “other,” which
graduation
included boyfriend,
girlfriend, husband, wife,
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teacher, self, personal
experience, church, and
classes.
Borden L. M, Lee S. A,
Serido J, Collins D (2008)
Some researchers have
Student often begin their
suggested that lower
college careers without
income families may not
be aware of
college financing options
(Olson 1982) or may be
uncomfortable using credit
for college expenses
(Churaman 1992)
ever having been solely
responsible for their own
personal finances
unprepared to effectively
manage the psychological
costs
associated with high debt
Mohamad Fazli Sabri,
MacDonald M, Hira T. K,
Jariah Masud, Paim L,
Mohd. Amin Othman
(2008),
uncertain about where
students from a rural area,
More than half of the
money is spent (2.58); buy
parent marital status is
respondents did not save
unnecessary things (2.36);
widow, low family
any money when they
lend money to friends
income, middle child,
received their scholarship
(2.27); and skip meals to
public university,
or
save money (2.17)
stay on campus, GPA
education loan. More than
between 2.5-3.74, and tend
half of the students used
to spend on more items
their money for shopping.
were likely to report
About 45% of them spent
engaging in more effective
all their
financial behaviors
money before the end of
the semester; 17% of
students gifted some
money to their family, and
13% used their money to
repay debts.
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