Financial Literacy & Rational Financial Decision Making : a study of university students in Sweden

Abstract: The importance of a high level of financial literacy and skills in the area of personal finance is of constant relevance, especially for young people and students. This research aims to determine if there are differences between the students at the different faculties at Umeå University concerning financial literacy and rational financial decision making. This will be done based on a framework consisting of previous studies and research concerning financial literacy, utility and rationality. A quantitative study was made by gathering data through an online survey. Two comparisons were made between the reference group Business Administration students, and each of the four faculties. The first comparison concerned financial literacy and the second one concerned rational financial decision making. The results show that the reference group have a higher financial literacy but at the same time, they are not different concerning rational financial decision making. The study further investigated the relationship between financial literacy and rational financial decision making. A correlation test was carried out on these two variables and the results showed that they were independent of each other.