Mediating Role of Financial Literacy in Relationship of Factors Affecting the Money Management Skills

Abstract

In the contemporary era characterized by rapidity, it is anticipated that undergraduate students will assume leadership positions across several domains, including business and Nations. To excel in these positions, individuals must demonstrate robust financial decision-making abilities. These abilities are crucial for making prudent financial choices that may significantly influence their professional and personal life. Nevertheless, it is worth noting that the emphasis on money-management skills in developing nations is often confined to functional financial literature. This body of literature provides technical knowledge about budgeting and investing, although it may not include other variables that influence the process of making financial decisions. This study aims to determine the mediating role of financial literacy in factors affecting money management skills. The research used a quantitative methodology. A questionnaire was administered to three distinct groups of students, including computer science, English Language and Literature, and business students, at the Sindh University campus in Larkano, Pakistan. The results showed that economic and psychological factors rather than social factors significantly impact money management skills. The mediation results show that financial literacy has a mediating relationship between psychological factors and money management skills rather than economic and social factors.