Submitted to the Graduate College of Bowling Green. State University ... personal finance characteristics, primarily examining collegians' knowledge of consumer finance issues, but ... To a significant degree compared with first-year students,.
EXAMINING THE PERSONAL FINANCE ATTITUDES, BEHAVIORS, AND KNOWLEDGE LEVELS OF FIRST-YEAR AND SENIOR STUDENTS AT BAPTIST UNIVERSITIES IN THE STATE OF TEXAS
Brent A. Marsh
A Dissertation Submitted to the Graduate College of Bowling Green State University in partial fulfillment of the requirements for the degree of
DOCTOR OF PHILOSOPHY August 2006 Committee: Robert DeBard, Advisor Alberto Gonzalez, Graduate Faculty Representative Michael D. Coomes William E. Knight
© 2006 Brent A. Marsh All Rights Reserved
iii ABSTRACT Robert DeBard, Advisor
For nearly four decades scholars from various disciplines have studied college students' personal finance characteristics, primarily examining collegians' knowledge of consumer finance issues, but occasionally considering their attitudes or behaviors. In recent years there has been a surge in research projects examining college students' personal finance characteristics. No studies were found that simultaneously examined students' personal finance attitudes, behaviors, and knowledge, nor did the literature reveal research focused on the subjects of this study: students enrolled at Baptist universities in Texas. The purpose of this study, which was guided by eight research questions, was to examine the personal finance attitudes, behaviors, and knowledge levels of freshmen and seniors at Baptist universities in Texas, and to allow student affairs administrators employed at these institutions to offer their perceptions of students' personal finance characteristics and to provide suggestions regarding how institutions might address personal finance education. Online surveys were employed for data collection. Six Baptist universities in Texas were included in the study, 2,100 students (350 per institution, 175 first-year students and 175 seniors) were systematically sampled, and 408 (19%) usable surveys were completed. A convenience sample of student affairs administrators (n = 169) was selected and 100 (59%) usable surveys were completed. Data were primarily quantitative in nature, though administrators were encouraged to provide written comments that were analyzed through basic qualitative techniques. Most research questions, however, were answered through descriptive statistics, t tests, or ANOVA procedures.
iv Seniors demonstrated significantly better personal finance attitudes, behaviors, and knowledge than first-year students. To a significant degree compared with first-year students, seniors credited their university experience with helping to improve their knowledge, while firstyear students significantly differed from seniors in attributing the university experience with influencing their attitudes. Student affairs administrators consistently rated students' personal finance characteristics significantly lower than students rated themselves, and administrators generally felt college students lacked sound personal finance attitudes, behaviors, and knowledge. It was concluded that Christian-based universities should implement personal finance initiatives to fulfill their distinctive missions and prepare graduates for successful stewardship of fiscal resources, emphases that could become a hallmark of Christian-based higher education.
v
6
Train a child in the way he should go,
and when he is old he will not turn from it. 7
The rich rule over the poor,
and the borrower is servant to the lender. Proverbs 22: 6-7 (New International Version)
vi ACKNOWLEDGEMENTS As I reflect upon my educational journey at Bowling Green State University (BGSU), the culmination of which is embodied in this doctoral dissertation, I am reminded of many individuals who have supported me in countless ways and for whom I am most thankful. Your contributions, whether small or great, have been a blessing to me. Miranda, my wife: Your endless support and encouragement have meant the world to me. You willingly moved to Ohio so I could pursue my degree at BGSU, and you have been my cheerleader and companion along this journey. I could not have done it without you. I am continually thankful to God for the precious gift He gave me in you. I love you. Gary and Lougene, my parents: I have learned so much from you, and am so thankful for the love you have shown me over the years. To date, I have spent roughly 75% of my life in some form of schooling. You have always placed a high priority on learning, and you provided a challenging and supportive home environment that made me want to excel. I am proud to call you "dad" and "mom." Jim and Drenda, my parents "in law": You are such a blessing to me. Thank you for your continual prayers and support. I am grateful to have you in my life. Family and Friends: I am thankful for the support and prayers of so many other family members: my grandparents--J.G. and Marie, and Rex and Ann; my brother and his family--Greg, Julie, Erika, Cooper, and Tyler; and, the entire Killion family. Friends I have made through BGSU, Bowling Green Christian & Missionary Alliance Church, Southside Baptist Church in Brownwood, Texas, and Howard Payne University (HPU) in Brownwood have been such an encouragement to me. Thank you!
vii Peggy Haas and Tony Lake: Your companionship was the highlight of my HIED experience at BGSU. Through all the seeming madness of coursework, prelims, and everything in between, our little cohort managed to have fun! Thank you for your friendship. L & A forever! Dr. Bob DeBard: Thanks for your sound advice and guidance through this research project. Studying college students' personal finance characteristics at Baptist universities in Texas is not a typical BGSU HIED dissertation topic, and I am grateful that you encouraged me to explore something important and practical that will make a difference in my career and hopefully in the lives of many future college students. My Dissertation Committee: Working with each of you has been a wonderful experience, and I truly appreciate your time and dedication to making this a rigorous yet enjoyable process. I am grateful to Dr. Bill Knight for the methodological support and constant availability and willingness to answer questions and provide direction. Thanks especially for your assistance with the online survey. Dr. Mike Coomes, your thoughtful and challenging feedback led to a better piece of research of which I can be proud. Thanks for asking such good questions. Dr. Al Gonzalez, thank you for stepping in to serve as my GFR. I have appreciated your warm, supportive style and continual emphasis on the philosophical implications of the study. Colleagues at Howard Payne University: I am grateful to Dr. Brad Johnson for the opportunity to serve at HPU as Dean of Student Life and for encouraging me to finish my dissertation. Thanks to Dr. Lanny Hall, HPU President, for supporting my research and helping me "get my foot in the door" at our sister schools in Texas. Thanks to the Student Life staff for your constant encouragement. You helped me finish strong. Research Participants: Thanks to the students and student affairs administrators who willingly took time out of busy schedules to complete the Personal Finance Survey and provide
viii candid and thoughtful information, without which this research endeavor would not have been possible. Personnel at Other Baptist Universities: Many individuals at the participating Baptist universities in Texas helped make this project possible. Baylor University--Mr. William Underwood, (former) Interim President; Dr. Dub Oliver; and Mrs. Fay Barkley. East Texas Baptist University--Dr. Bob Riley, President; Dr. Rutledge McClaran; and Mr. Barry Hale. Hardin-Simmons University--Dr. Craig Turner, President; Dr. Robert Friberg; Mr. Forrest McMillan; and Miss Katie Lindeman. Houston Baptist University--Dr. Doug Hodo, President; and Mr. Norm Slothsthed. Howard Payne University--Mr. Randy Weehunt; Mr. Nathan Brown; and Mrs. Rebecca Mainka. University of Mary Hardin-Baylor--Dr. Jerry Bawcom, President; and Mrs. Amy Bawcom. The Lampo Group, Inc.: Thanks to Dave Ramsey, Louis Falzetti, and all those at the Lampo Group, Inc. who are diligently working to help people learn money management God’s way through Financial Peace University (FPU) and other great resources. The wonderful FPU experience Miranda and I had was a major impetus for this study. Thank you for donating prizes which encouraged students to participate in this research project. My Heavenly Father: Thank you for loving and saving me, for directing my steps, and for answering my prayers and those of countless others who have lifted me up during this adventure. Any credit or recognition I receive from this research is all Yours.
ix TABLE OF CONTENTS Page CHAPTER I. INTRODUCTION...........................................................................................001 Introduction................................................................................................................001 Overview....................................................................................................................005 Statement of the Problem...........................................................................................006 Significance of the Problem.......................................................................................007 Research Questions....................................................................................................009 Definition of Terms....................................................................................................010 Assumptions...............................................................................................................012 Limitations .................................................................................................................013 Delimitations..............................................................................................................014 CHAPTER II. REVIEW OF THE LITERATURE................................................................016 Introduction................................................................................................................016 Financial Status of United States General Population ...............................................016 Financial Status of College Students in the United States.........................................021 College Students’ Knowledge of Money Management and Personal Finance..........031 College Students’ Attitudes about Money Management and Personal Finance ........042 College Students’ Behaviors Regarding Money Management and Personal Finance.......................................................................................................................046 The Interrelatedness of Attitudes, Behaviors, and Knowledge in Personal Finance.......................................................................................................................055 Student Development Theory Meets Personal Finance .............................................059
x Input-Environment-Outcome (I-E-O) Model for Assessment in Higher Education ...................................................................................................063 The Millennial Generation: Today's College Consumer ...........................................065 Overview of Baptist Higher Education in Texas .......................................................067 Baylor University...........................................................................................068 East Texas Baptist University........................................................................069 Hardin-Simmons University ..........................................................................070 Houston Baptist University............................................................................071 Howard Payne University ..............................................................................072 University of Mary Hardin-Baylor ................................................................074 Christian Higher Education and a Biblical Approach to Personal Finance ...............075 Self-Report Data in Research.....................................................................................080 Surveys of Perception ................................................................................................081 Administering Web-based Surveys............................................................................082 Conclusion .................................................................................................................083 CHAPTER III. METHODOLOGY .......................................................................................085 Research Questions....................................................................................................085 Data Sources ..............................................................................................................086 Participating Institutions ................................................................................086 Student Data...................................................................................................087 Students..............................................................................................087 Survey Instrument..............................................................................089 Student Affairs Administrator Data ...............................................................092
xi Administrators....................................................................................092 Survey Instrument..............................................................................093 Data Storage...................................................................................................094 Analytical Approaches...............................................................................................094 Overview of Data...........................................................................................095 Demographic Characteristics .............................................................098 Research Question One......................................................................099 Research Question Two .....................................................................100 Research Question Three ...................................................................100 Research Question Four.....................................................................100 Research Question Five .....................................................................101 Research Question Six .......................................................................102 Research Question Seven...................................................................102 Research Question Eight....................................................................104 Review and Approval Process ...................................................................................105 CHAPTER IV. RESULTS.....................................................................................................106 Response Rates and Demographic Characteristics ....................................................106 Demographic Characteristics of Students......................................................107 Demographic Characteristics of Administrators............................................112 Research Question One: Personal Finance Attitudes.................................................115 Orientation toward Personal Finance.............................................................116 Debt Philosophy.............................................................................................118 Approach to Credit Cards ..............................................................................120
xii Financial Security ..........................................................................................124 Valuing Personal Finance ..............................................................................127 Research Question Two: Personal Finance Behaviors ..............................................129 Organizing Behavior......................................................................................129 Spending Behavior.........................................................................................133 Saving Behavior.............................................................................................136 Squandering Behavior....................................................................................139 Research Question Three: Personal Finance Knowledge ..........................................141 Financial Foundations....................................................................................142 Credit Issues...................................................................................................146 Important Factors ...........................................................................................149 Investments ....................................................................................................151 Research Question Four: Comparing First-Year and Senior Students' Personal Finance Attitudes, Behaviors, and Knowledge ...........................................153 Research Question Five: Influence of the University Experience on Students' Personal Finance Attitudes, Behaviors, and Knowledge ...........................................156 Research Question Six: Differences in Personal Finance Attitudes, Behaviors, and Knowledge by Selected Demographic Factors ...................................................158 Gender ............................................................................................................159 Age ................................................................................................................160 Enrollment Status...........................................................................................162 Academic Major.............................................................................................163 Employment Status ........................................................................................168
xiii Prior Participation in a Personal Finance Class or Seminar ..........................170 Miscellaneous Nonsignificant Factors...........................................................171 Research Question Seven: Administrator Perceptions ..............................................172 Administrator Perceptions of Students' Personal Finance Attitudes, Behaviors, and Knowledge ............................................................................172 Comparison of Administrator Perceptions and Student Self-Reports ...........174 Problems/Difficulties Perceived by Administrators Regarding Students' Money Management.......................................................................177 Accountability, Consumerism, and Credit Cards ..............................177 Financing Higher Education ..............................................................180 Parental Influence ..............................................................................182 Personal Finance Knowledge, Perspective, and Prioritization ..........184 Research Question Eight: Administrator Opinions and Suggestions ........................188 Current Strategies that Address Personal Finance Issues at Baptist Institutions .....................................................................................189 Potential Curricular and Co-Curricular Strategies to Address Personal Finance Issues .................................................................................194 Summary ...................................................................................................................202 Personal Finance Attitudes ............................................................................203 Personal Finance Behaviors...........................................................................205 Personal Finance Knowledge.........................................................................207 Comparing First-Year and Senior Students' Personal Finance Attitudes, Behaviors, and Knowledge ............................................................................208
xiv Influence of the University Experience on First-Year and Senior Students' Personal Finance Attitudes, Behaviors, and Knowledge ...............209 Differences in Personal Finance Attitudes, Behaviors, and Knowledge by Selected Demographic Factors ..............................................210 Administrator Perceptions .............................................................................211 Administrator Opinions and Suggestions ......................................................213 CHAPTER V. DISCUSSION, CONCLUSIONS, AND RECOMMENDATIONS..............216 Discussion: How the Results Answer the Research Questions .................................217 Personal Finance Attitudes ............................................................................217 Personal Finance Behaviors...........................................................................219 Personal Finance Knowledge.........................................................................220 Demographic Differences in Personal Finance Attitudes, Behaviors, and Knowledge ..............................................................................................222 Influence of the University Experience .........................................................226 Perceptions of Student Affairs Administrators ..............................................228 Educational Initiatives Proposed by Student Affairs Administrators ............232 Conclusions
............................................................................................................234
Recommendations......................................................................................................241 Recommendations for Future Study ..............................................................241 Recommendations for Leaders in Baptist Higher Education.........................244 REFERENCES ......................................................................................................................251 APPENDIX A. BGSU HSRB APPROVAL LETTER..........................................................263 APPENDIX B. INVITATION LETTER TO PARTICIPATE ..............................................264
xv APPENDIX C. E-MAIL REQUESTING CAMPUS DATA ................................................264 APPENDIX D. POSTCARD SENT TO SAMPLED STUDENTS.......................................269 APPENDIX E. LETTER SENT TO SAMPLED ADMINISTRATORS ..............................270 APPENDIX F. SURVEYS ....................................................................................................271 APPENDIX G. SUPPLEMENTAL TABLES.......................................................................289
xvi LIST OF TABLES Table
Page
1
Demographic Characteristics of Student Participants................................................107
2
Demographic Characteristics of Administrator Participants .....................................112
3
Orientation toward Personal Finance - "I believe that . . ." .......................................116
4
Debt Philosophy - "I believe that . . ." .......................................................................118
5
Approach to Credit Cards - "I believe that . . .".........................................................121
6
Financial Security - "I believe that . . .".....................................................................124
7
Valuing Personal Finance - "I believe that . . .".........................................................127
8
Organizing Behavior - "To what extent do you . . ." .................................................130
9
Spending Behavior - "To what extent do you . . ." ....................................................133
10
Saving Behavior - "To what extent do you . . ." ........................................................136
11
Squandering Behavior - "To what extent do you . . ." ...............................................139
12
Financial Foundations - "My knowledge about . . ." .................................................143
13
Credit Issues - "My knowledge about . . ." ................................................................146
14
Important Factors - "My knowledge about . . ." ........................................................149
15
Investments - "My knowledge about . . ."..................................................................151
16
Group Differences in Personal Finance Attitudes, Behaviors, and Knowledge Between First-Year and Senior Students.........................................155
17
Group Differences in the University Experience's Influence on Personal Finance Attitudes, Behaviors, and Knowledge Between First-Year and Senior Students ..........................................................................................................157
18
Group Differences in Personal Finance Attitudes, Behaviors, and
xvii Knowledge Between Male and Female Students. .....................................................159 19
Means, Standard Deviations, and One-Way Analyses of Variance (ANOVA) For Effects of Age on Personal Finance Attitudes, Behaviors, and Knowledge .......161
20
Effects of Age (Traditional, Nontraditional, No Response) on Personal Finance Attitudes, Behaviors, and Knowledge..........................................................161
21
Group Differences in Personal Finance Attitudes, Behaviors, and Knowledge Between Full-Time and Part-Time Students ..........................................163
22
Effects of Academic Major on Personal Finance Attitudes, Behaviors, and Knowledge ..........................................................................................................164
23
Means and Standard Deviations for Effects of Major on Personal Finance Attitudes, Behaviors, and Knowledge .......................................................................165
24
Means, Standard Deviations, and One-Way Analyses of Variance (ANOVA) for Effects of Employment Status on Personal Finance Attitudes, Behaviors, and Knowledge ..........................................................................................................168
25
Effects of Employment Status (Part-time, Full-time, Not Employed) on Personal Finance Attitudes, Behaviors, and Knowledge ...........................................169
26
Group Differences in Personal Finance Attitudes, Behaviors, and Knowledge Between Students Who Have and Have Not Taken a Personal Finance Class or Seminar ........................................................................................................171
27
Group Differences in Administrators' Perceptions of Personal Finance Attitudes, Behaviors, and Knowledge Between First-Year and Senior Students ......173
28
Group Differences Between Administrator Perceptions and First-Year and Senior Students' Self-Reports of Personal Finance Attitudes, Behaviors, and
xviii Knowledge .................................................................................................................176 29
Baylor University Demographic Data (Gender, Attendance Status, and Age) of Student Participants Compared to Undergraduate Student Body Data .................289
30
East Texas Baptist University Demographic Data (Gender, Attendance Status, and Age) of Student Participants Compared to Undergraduate Student Body Data ........290
31
Hardin-Simmons University Demographic Data (Gender, Attendance Status, and Age) of Student Participants Compared to Undergraduate Student Body Data ........291
32
Houston Baptist University Demographic Data (Gender, Attendance Status, and Age) of Student Participants Compared to Undergraduate Student Body Data ........292
33
Howard Payne University Demographic Data (Gender, Enrollment Status, and Age) of Student Participants Compared to Undergraduate Student Body Data ........293
34
University of Mary Hardin-Baylor Demographic Data (Gender, Attendance Status, and Age) of Student Participants Compared to Undergraduate Student Body Data.......................................................294
35
Student Responses to Personal Finance Attitude Items: "I believe that . . ." .....................................................................................................295
36
Student Responses to Personal Finance Behavior Items: "To what extent do you . . ." ......................................................................................303
37
Student Responses to Personal Finance Knowledge Items: "My knowledge about . . ." ........................................................................................309
38
University Experience Influence on Students' Personal Finance Attitudes ...............312
39
University Experience Influence on Students' Personal Finance Behaviors .............321
40
University Experience Influence on Students' Personal Finance Knowledge ...........327
xix 41
Administrator Perceptions of Students' Personal Finance Attitudes: "Students believe that . . ." .........................................................................................331
42
Administrator Perceptions of Students' Personal Finance Behaviors: "To what extent do students . . ." ...............................................................................339
43
Administrator Perceptions of Students' Personal Finance Knowledge: "How would you rate students' knowledge about . . ." ..............................................345
1 1 CHAPTER I. INTRODUCTION
Higher education in the United States has a long and rich history that dates as far back as 1636, when Harvard College was founded in what was then colonial America. In its infancy, higher education was reserved primarily for the elite members of society, with the major purpose being to train up men who would lead the church. In time, with the demands of an expanding nation, this academic enterprise grew and evolved, trying to keep pace with the needs of society. Diverse institutions sprang up, and the curriculum broadened as well. While a classical curriculum once prevailed, by the mid-to-late 1800s, more practically-oriented courses of study were offered (Brubacher & Rudy, 1997; Rudolph, 1990). An in-depth review of American higher education reveals a distinct trend: as societal needs and realities shifted, higher education responded accordingly to meet those changing needs and realities. In the early twenty-first century, that same type of responsiveness is necessary for higher education to remain a relevant and influential force in the American culture and economy. While many salient educational needs exist, one area that ought to concern American educators at all levels is the lack of preparation many citizens have in managing their personal finances. According to Glenn (2001), educators are beginning to take note. The impending retirement of the Baby Boomer generation and the national decline in personal savings rates are but two issues of concern. Howell (1993) stated that managing personal finances is one of the most basic competencies required by all members of modern society, because day-to-day consumer choices ultimately affect a person's financial security and standard of living. Nonetheless, Harder (2001) indicated that the topic of personal finance is often underemphasized in today's curriculum. Most people tend to learn about personal finance through trial and error.
2 2 Such precarious learning conditions need not prevail. Colleges and universities have a tremendous opportunity to influence the economic lives and futures of students, if only administrators and faculty will make a commitment to focus on personal finance education as part of the curriculum. In 2002, during a U.S. Senate hearing before the Committee on Banking, Housing, and Urban Affairs, then Chairman Paul S. Sarbanes suggested that many Americans first enter the financial system when they step onto the college campus. Regrettably, he noted that studies are demonstrating most college students lack the financial knowledge needed for a smooth entry into the system. Another speaker at the hearing, Senator Christopher J. Dodd, asserted that incoming college freshmen are unprepared to handle even the ordinary fiscal obligations attendant with entering college ("Importance of Financial Literacy," 2002). Addressing students' personal finance deficiencies will not only stave off potential fiscal woes, but teaching them how to appropriately manage money will have positive developmental implications as well. Chickering and Reisser (1993), in their landmark text on the psychosocial development of college students, claimed, "students are anxious about all kinds of things. . . . Students [are] worried about intimate relationships, parental conflicts, finances [italics added], and interpersonal conflicts with friends" (p. 91). When students learn how to manage money, they accomplish an important developmental task associated with achieving instrumental independence, which is one component of Chickering and Reisser's developmental vector in which students move into and through autonomy and toward interdependence. One of the tasks of the university should be to provide students the necessary challenge and support to move through these developmental vectors. Unfortunately, it appears that helping students manage finances is one area where colleges and universities are having little to no impact. Graham and Cockriel (1996) studied 36 areas of personal and social growth to determine
3 3 whether a tangible impact could be traced to the college experience. Laudably, 28 of the 36 areas of personal and social growth achieved what Graham and Cockriel called "tangible college impact" (p. 508). Regrettably, one of the eight areas found not to have such an impact was managing finances. In their study, Graham and Cockriel (1996) conducted a factor analysis resulting in four developmental factors. The 36 developmental areas fell into one of these four factors: (1) intrapersonal development, (2) personal valuing and moral development, (3) social leadership and development, and (4) civic involvement and awareness. Learning to manage finances landed in the second factor, personal valuing and moral development. Interestingly, this broad category called "personal valuing and moral development," which included managing finances as well as seven other outcomes, ranked fourth out of the four categories in overall impact resulting from the college experience. According to the authors, "this suggests that while the college experience probably does affect the personal and social growth of students it has its least impact on how individuals develop moral principles, become responsible family members, and seek the spirit of truth" (p. 510). These findings should be a cause for concern among higher education leaders in America, particularly for those engaged in educating students in small, private college or university settings that offer environments more conducive to conversations with students about issues of significance, discussions that would encourage reflection on their personal morals and values. Certainly, dialogue about money management, debt, and investing would promote such reflection among students, and the topic area is not exceedingly sensitive so as to be eschewed by faculty, staff, and students. To the contrary, money management is a down-to-earth, daily issue with which nearly everyone must grapple. There is no reason why this topic of
4 4 conversation is not more commonplace within the walls of academe--except for the fact that it has been largely ignored. Warning signs were signaled by one educational leader over 30 years ago. In 1975, Terrel H. Bell, then U.S. Commissioner of Education, spoke at the annual meeting of the Council of Small Private Colleges about the future of such institutions. In his lecture, he offered three main points, one of which pointed to the need for small, private institutions to offer a basic economic education (Bell, 1975). Commissioner Bell's 1975 speech could easily be given in 2006 and maintain, if not enhance, its saliency: In a world on a buy-now-pay-later whirligig that is gaining speed daily, a college owes its students some education in economic literacy, the simple fundamentals of economics. Many so-called educated people never learn that you can't spend more money than you have coming in each month and avoid personal economic disaster. Their wants are insatiable, but their financial resources are limited. An educated person must have economic literacy . . . must know how to manage money as well as earn it. It's not how much a person earns so much as it is the difference between what one earns and what one spends that will make a person economically independent. To learn the simple lessons of personal money management and apply them is what intelligent, rational people do. This, mundane as it may seem, is another mark of an educated person. (pp. 5-6) While Bell (1975) eloquently articulated the need for personal finance education at the collegiate level, Graham and Cockriel (1996) scientifically demonstrated that colleges are not tangibly impacting the ability of students to manage finances. As one who aligns himself with Bell's opinion, in this study the researcher examined the level of personal finance attitudes, behaviors, and knowledge among first-year and senior students at Christian-based institutions of higher
5 5 education, as well as inquired as to perceptions of these students' financial responsibility by those who serve them at their respective institutions--student affairs professionals.
Overview This dissertation is divided into five chapters. Chapter I: Introduction, is intended to provide context and justification for the study proposed, including its research questions. Chapter II: Review of the Literature, provides a comprehensive review of scholarship at the intersection of college students and personal finance, with special attention paid to the attitudes, behaviors, and knowledge characteristic of the target population. The review begins with a snapshot of the current condition of fiscal responsibility in the United States, and concludes with a level of specificity that provides segue to an introduction of the research questions for this study in the next chapter. Chapter III: Methodology contains an overview of how the study was undertaken. The methodology chapter contains a reiteration of the research questions that flow from the literature review, the data sources surveyed, the instruments used in data collection, and a comprehensive discussion of the analysis techniques employed. Chapter IV: Results contains the resultant data from the research, including a presentation of all relevant statistics and their values. Whereas the majority of data collected were quantitative in nature, the qualitative data collected are reviewed as well. Chapter V: Discussion, Conclusions, and Recommendations includes a final restatement of the research questions, followed by a discussion of how they have been addressed based upon the findings of the study. The findings are also considered in light of relevant literature highlighted in Chapters I and II. Following this discussion, a series of recommendations is provided both for future study and for
6 6 higher education practice at the intersection of college students and how they manage their money.
Statement of the Problem As the literature review will demonstrate, there is a fair amount of published research on college students and money management issues of some kind. Interestingly, researchers from various academic disciplines, including consumer sciences, business education, and student affairs, among others, have contributed to the available literature on this topic. Nevertheless, gaps in the body of knowledge on college students' personal financial management remain, and many questions have either been left unanswered or the answers provided have at times been contradictory. One group of students who have not been studied in regard to their personal finance characteristics are those enrolled in private Christian colleges and universities. These are colleges that have maintained close connections with their founding denominations, have continued to infuse the morals and values of their distinctly Christian heritage by, among other things, maintaining compulsory chapel requirements and relatively strict guidelines for student behavior, and have continued to apply biblical ideals throughout their programs and services. Whereas the Bible contains over 800 scriptures that relate to personal finance in some form (Ramsey, 2001), and whereas, due to the distinctively Christian mission statements of Baptist universities, students at these institutions are regularly exposed to the Bible--through chapel, required coursework, voluntary church attendance, and private study--much more than their counterparts at secular institutions, it would stand to reason that they might have attitudes, behaviors, and knowledge marked by fiscal responsibility. If leaders in Christian higher
7 7 education had heeded the advice of T.H. Bell (1975), implementing and sustaining programs geared toward personal finance education as he suggested, there would almost certainly be a marked difference in the personal finance characteristics between students at such institutions and those at colleges and universities where consumer education is not emphasized. This study was designed to examine via survey research the current status of personal finance attitudes, behaviors, and knowledge of first-year and senior students at selected Baptist universities in the state of Texas. It was surmised that a willingness on the part of such institutions to initiate a personal finance curriculum within their first-year experience program and beyond could become a hallmark of Christian-based private colleges, and that student affairs personnel at these institutions would have useful suggestions about how this topic could be emphasized within their institution's context. As such, student affairs staff at participating institutions were surveyed in order to identify the educational needs of their students in regard to personal finance and to suggest possible strategies to meet these learning needs within a curricular or cocurricular response.
Significance of the Problem A brief review of what some scholars have said about the amount of research conducted at the crossroads of college students and personal finance, and what others have said about the criticality of this topic, gives credence to the significance of the problem posed in this research study. In the process of writing his doctoral dissertation, Moser (1981) found that several studies had investigated high school students’ knowledge of business and consumer education, but studies regarding college students or adults were limited; he found 13 such studies. Just over one decade later, Howell (1993) claimed, "a review of the literature reveals that research related to
8 8 personal finances of college students is still in its infancy" (p. 14) and described it as "a fugitive subject in the literature" (p. 127). A few years later, Markovich and DeVaney (1997), in a study on college seniors and their personal financial management, concluded that prior research on the topic was limited. On the heels of that declaration, Taylor and Overbey (1999) determined that "the financial practices and expectations of college students are largely unexplored" (p. 39), and in 2001, a team of researchers on college students' money management practices called for more research on the topic (Henry, Weber, & Yarbrough, 2001). Clearly, the opinion is widely held that more research is needed regarding college students' money management. Equally strong is the consensus among scholars that personal finance education should be significantly emphasized at the postsecondary level. One set of scholars pointed out an interesting paradox within higher education, an enterprise whose primary purpose is to prepare students for successful careers and lives following graduation: "Teaching people how to earn a living without teaching them how to manage money to their best advantage is really omitting half of the curriculum" (Karjala & Pagel, 1998, p. 26). Hirt and Nick (1999), like Graham and Cockriel (1996), argued that initiatives to help students manage their financial resources have been neglected in higher education's programs and services. Other scholars have contended that curricular and cocurricular emphases are absolutely essential if students are to learn sound personal finance principles. Chen and Volpe (1998) argued that "students do not gain more knowledge of personal finance by just spending more time in college learning other unrelated subjects. They learn the subject through a business course, seminars, or their own mistakes" (p. 116). Glenn (2001) emphasized the need for students to be literate in personal finance matters so they will be equipped to make good decisions regarding the use of their resources--time, money, and talents--in order to positively
9 9 impact their quality of life both during college and beyond. According to Hayhoe, Leach, and Turner (1999), who studied college student credit card use, students are seeking financial education and advice in reaction to perceived or real credit problems. Another team of researchers concluded that the key to helping college students be wise consumers of credit lies in giving them the confidence and knowledge to manage their personal finances (Pinto, Parente, & Palmer, 2001b). Recently, a group of researchers concluded their publication by suggesting that future research more fully explore potential relationships between college students' knowledge and attitudes surrounding debt (Norvilitis, Szablicki, & Wilson, 2003). In addition, they suggested that college officials seriously consider offering more educational opportunities about personal finance to their students.
Research Questions This study was designed to address eight primary research questions. First, what attitudes do first-year and senior college students at selected Baptist universities possess regarding personal finance concepts? Second, what personal finance behaviors do first-year and senior college students at selected Baptist universities exhibit regarding personal finance concepts? Third, what knowledge do first-year and senior college students at selected Baptist universities claim to possess regarding personal finance concepts? Fourth, how do the personal finance attitudes, behaviors, and knowledge of first-year and senior college students at selected Baptist universities compare given the typical variation in age and collegiate experience between the two groups? Fifth, how do perceptions between first-year and senior college students at selected Baptist universities differ regarding their university experience influencing their personal finance attitudes, behaviors, and knowledge? Sixth, how do the personal finance attitudes, behaviors, and
10 10 knowledge of first-year and senior students at selected Baptist universities differ by selected demographic factors? Seventh, what personal finance attitudes, behaviors, and knowledge levels of first-year and senior college students are perceived by student affairs professionals at selected Baptist universities, and how do those perceptions compare with actual student responses? Finally, what strategies can be recommended by student affairs professionals at selected Baptist universities that can align institutional mission with programmatic initiatives, integrate personal finance into the college curriculum and cocurriculum, and encourage application of personal finance theory into student life? These eight questions guided this research project.
Definition of Terms While the appended surveys that were administered in this project can further contextualize the study for the reader, the following definitions should also help explain several concepts found throughout this report. The term personal finance, also referred to as money management or consumer finance, includes individual financial issues such as cash flow plans, credit, insurance, investments, mortgages, and savings. From the affective domain, attitudes refer to how one feels about personal finance issues, measured in this study by responses to opinion statements. From the behavioral domain, behaviors refer to how one behaves in relation to matters of personal finance, measured in this study by responses to action or activity statements. From the cognitive domain, knowledge refers to what one knows about personal finance issues, measured in this study by students' own perceptions of their knowledge level regarding various personal finance concepts. Baptist colleges in the United States were founded by members of Baptist churches. Baptists are members of evangelical Protestant churches of congregational polity, churches that
11 11 follow reformed tradition in worship, believe in individual freedom, in the separation of church and state, and in water baptism of voluntary, assenting believers in Jesus Christ as the one through whom salvation from sins and eternal life can be attained (Soukhanov, 1996). Historically, Baptists in Texas--like their brethren in other denominations--were deeply interested in education. Indeed, as Storey (1996) wrote, "it would be impossible to write a history of education in Texas without taking religion into account. Whether Catholic or Protestant, Methodist or Baptist, the churches valued schooling" (p. 1). A first-year student is typically an 18-19 year old college student with fewer than 31 earned credit hours. Commonly referred to as freshmen, a cross-institutional sample of these students comprised just under half (44%) of the overall student sample in this research project. A college senior is commonly a 21-22 year old student with 91 or more earned credit hours and in the last year of his or her collegiate career. A cross-institutional sample of seniors comprised a slight majority (56%) of the student sample in this study. A student affairs professional, also referred to as a "student life" professional at many Baptist institutions, is an individual who is traditionally employed by a college or university in an administrative capacity. Student affairs practitioners typically work with college students in cocurricular arenas, such as residence life or student activities, focusing primarily on affective and personal development (American College Personnel Association [ACPA], 1996). One national student affairs association published a document suggesting student life professionals are "educators who share responsibility with faculty, academic administrators, other staff, and students themselves for creating the conditions under which students are likely to expend time and energy in educationally-purposeful activities" (ACPA, 1996, ¶ 9). In a distinctly Christian review of the student affairs profession, Guthrie (1997) underscored the notion that student
12 12 learning is the context in which student affairs work occurs. He suggested that student learning is a religious, purposeful, multidimensional, integrated, communal, process-oriented endeavor, and that student affairs professionals help foster environments in which this learning can take place.
Assumptions Several assumptions bear acknowledgment relevant to this research endeavor. First, as with any survey research project, one must assume that respondents have answered accurately and truthfully so that reliable data are assured. Regarding the survey items themselves, it was assumed that they measure what they are intended to measure (i.e., internal validity). For assurance, a paper version of the student survey was pilot tested by the researcher during the fall 2003 semester at Bowling Green State University in a pretest/posttest study of personal finance attitudes, behaviors, and knowledge among college student enrollees in two personal finance classes (Marsh, 2004). The paper survey was slightly modified and converted to a web-based instrument for the present study. To ensure that it worked properly and was easy to complete, pilot testing of the electronic questionnaire was conducted with several students from Howard Payne University, one of the participating institutions in this study. On July 28, 2005, the student affairs administrator survey, in paper form, was pilot tested with 23 student affairs professionals representing five Baptist universities in Texas at the Baptist Association of Student Affairs roundtable conference in Belton, Texas. It was assumed that the queried student affairs professionals representing selected Baptist institutions were sufficiently familiar with their student bodies to knowledgeably comment on students' attitudes, behaviors, and knowledge regarding the area of personal financial management. In addition, it was assumed that these student life personnel could rationally and
13 13 reasonably provide sound recommendations for possible educational initiatives that would address students' personal finance needs within the context of their respective institutions.
Limitations As with any research project conducted within the social sciences, there were a number of limitations to the present study which must be addressed. First, the human instrument was utilized in this study as it is in nearly all social science research, and human subjects represent fallible instrumentation. Nevertheless, data derived from the human instrument are analyzed constantly and are relied upon for untold numbers of claims and decisions on an ongoing basis, so this limitation is quite common. Second, the intentional decision to sample participants from Baptist universities limits the generalizability of the findings to other like institutions in the United States. To some extent, regional differences among respondents and those to whom one would generalize the findings should also be considered so that generalizations are made with caution. Of course, an inherent limitation in any survey research project is response rate; however, this potential problem was partially diminished in advance by selecting an appropriate sample size that could be expected to yield a hearty number of useable responses if a typical survey response rate was realized. To save money and data entry efforts, an Internet-based survey was utilized for both student and administrator participants. Sampled students received an initial postcard and three follow-up e-mail messages inviting them to participate in the study, while administrators selected for participation received a letter and three follow-up e-mail messages. This approach cost less, utilized a technology with which students and staff were very familiar, provided ready-to-use
14 14 data, and generated a faster response time than a mail-in paper survey. One limitation, however, was the possibility of a lower response rate, which turned out to be a non-issue. Another limitation to this study could have been failure to obtain participatory consent by selected institutions. The following eight institutions were contacted for participation in this study: Baylor University (Waco, TX), Dallas Baptist University, East Texas Baptist University (Marshall, TX), Hardin-Simmons University (Abilene, TX), Houston Baptist University, Howard Payne University (Brownwood, TX), University of Mary Hardin-Baylor (Belton, TX), and Wayland Baptist University (Plainview, TX). The key institutional representative at each university elected whether or not to (1) allow students to be surveyed, and (2) allow student affairs personnel to participate. As the number of participating institutions decreases, so would the generalizability of the findings. Fortunately, six of the eight institutions took part in the study, with only Dallas Baptist University and Wayland Baptist University electing not to participate.
Delimitations This study relied primarily on quantitatively generated data. Quantitative data sets lend themselves to describing, categorizing, and comparing, which is particularly valuable to higher education constituents (e.g., senior administrators, policy makers, funding agencies, and news media) who need to make quick decisions and do not have time to wade through the thick description that is characteristic of qualitative research. Fortunately, quantitative data typically allow for generalizations to broader settings, but what is often lost in the numbers is a richer understanding of context.
15 15 The results of this survey research project in which first-year and senior students at Baptist universities in Texas were queried regarding their personal finance attitudes, behaviors, and knowledge should certainly help deepen practical and scholarly understanding of the issue and should provide useful information that can be generalized out to institutions of similar type with comparable demographic characteristics. Interviews or focus groups were not conducted with students; however, the data resulting from surveys administered to student affairs personnel at Baptist universities in Texas help illuminate and contextualize the attitudes, behaviors, and knowledge levels expressed by student respondents. Since the administrator survey contained items designed to generate both quantitative and qualitative data, it was possible to gather suggestions from these personnel that provides valuable fodder for Chapter V: Discussion, Conclusions, and Recommendations. Incorporating the programmatic suggestions from student affairs staff members who daily interface with students on each of the participating campuses adds credibility that would otherwise be lost if the only recommendations came from an "armslength" researcher conjecturing about what campuses should or should not do based on a solitary data set. Indeed, these student affairs professionals' insights serve to strengthen the study.
16 16 CHAPTER II. REVIEW OF THE LITERATURE
Introduction This chapter presents a summary of the literature related to the personal finance attitudes, behaviors, and knowledge of college students, as well as particular issues related the how the research questions of this study were addressed. This chapter begins with a broad look at the personal finance characteristics of the United States general citizenry, and then proceeds into a review of studies in which the personal finance attitudes, behaviors, and knowledge of college students has been the research object. Following these sections is an introduction of a student development theory that intersects with personal finance management issues, as well as a comprehensive assessment model that integrates inputs, outputs, and educational environments. On the heels of the theory section is an overview of the Millennial Generation, the demographic cohort that is now entering college. Rounding out the survey of literature is a brief overview of Baptist higher education in Texas, an overview of Christian higher education and the approach to personal finance articulated in the Bible, followed by a review of issues related to survey research, namely, self-reported data, surveys of perception, and web-based surveys.
Financial Status of United States General Population At any point in time, the national cohort of undergraduate college students in the United States is, for the most part, a microcosm of the larger public that inhabits the country. By virtue of that reality, it seems reasonable to begin with an overview of the financial status of the U.S. in aggregate before turning specifically to a review of the personal finance characteristics of a particular population, namely, college students.
17 17 The history of personal finance in the U.S. is inextricably intertwined with historical developments of the nation in general. From the colonial era through the industrial revolution, for the average consumer, cash was king. The individual consumer bought and sold goods in cash transactions. For those who did utilize a bank, it was merely a place to store one's money and earn a bit of interest; nothing too complicated. Corporate stocks were not yet widely bought and sold on an open market, and certainly the average consumer was not part of what was then an investment system for the elite and the industrial tycoon. The laws of the land had not yet evolved to a point where insurance for one's property, health, and life were necessary. In a word, life was simpler--financially and in many other ways. Yet in a rapidly developing society where agrarianism was giving way to industrialism, and in a nation where automobiles, goods, and services were becoming more available than ever before, consumer attitudes and behaviors began to shift. Though the notion of paying with cash still held sway through the 1950s and into the 1960s, the introduction of credit cards, wider availability of home mortgages, and the possibility of other forms of credit led to a cultural change in money management. A buy now, pay later mentality began to take root. Indeed, as scholars peer back in time, "there is a widespread view that attitudes about debt . . . changed dramatically during the twentieth century--from a general abhorrence of debt to acceptance of credit as part of a modern consumer society" (Roberts & Jones, 2001, p. 214). From a strictly secular point of view, the societal embrace of credit would not necessarily be problematic were it not for other negative changes in the way Americans manage their personal finances. Moser (1981) noted that many consumers think there is nothing wrong with the manner in which they manage the money they earn. Rather, the problem for most consumers is not how much they earn but the way they manage that money. Olson and Dolan (1998) argued
18 18 that increasing consumer debt and rising personal bankruptcy rates have made it increasingly apparent that large numbers of consumers are not doing well at personal financial management. According to Luft (2003), U.S. citizens are saving only 2.0-2.5% of their disposable income. Upon reviewing the statistics published by the American Bankruptcy Institute (ABI), Luft concluded that financial incompetence has adversely affected the consumer bankruptcy rate in this country, which increased gradually until 1996 and 1997, at which time it suddenly spiraled upward. Since 1994, when filings totaled 837,797, bankruptcies have almost doubled, increasing 98 percent. In late 2003, the ABI reported that total personal bankruptcy filings remained at historic highs. For fiscal year 2003, there were over 1.6 million nonbusiness bankruptcies filed, up 7.4% from the 1.5 million filings in fiscal year 2002. At that time those figures represented the highest-ever total filing total for any reporting period (American Bankruptcy Institute, 2003). Regarding the lack of financial fitness in America today, best-selling author and nationally syndicated radio talk show host Dave Ramsey, a consumer advocate and personal finance educator, quipped, "the sad thing is that you can be financially mediocre in this country, financially flabby, and still be average. And if the truth be known, being average, normal, and financially flabby is pretty much okay by most folks' standards" (Ramsey, 2003, p. 10). Though Ramsey would suggest that a major culprit is laziness--people know how they ought to behave regarding their personal finances and simply fail to do it--he would also contend that some people do in fact lack the requisite knowledge to make good decisions with their money. While it is more a pet theory than a scientific fact, the notion that personal finance is 20% knowledge and 80% behavior makes intuitive sense (Ramsey, 2003). Indeed, the saying, "this is not rocket science," applies to basic personal finance.
19 19 Nearly anyone can grasp the basic concepts and principles that guide sound money management. Yet questions certainly remain. In the late 1990s, O'Neill, Bristow, and Brennan (2000) examined the learning needs and current personal finance practices of a group of metropolitan citizens who attended a six-hour personal finance conference. Upon administering their survey, the team found a variety of topics that respondents said encompassed their most pressing financial questions to which they needed answers: general investing (19.8%), retirement planning (16.5%), credit use/debt reduction (12.1%), budgeting/managing money (11.3%), and self-assessment of personal finances (10.9%). Since these respondents represented a sample of convenience, it cannot be deduced that the general population would have questions about these same topics in the proportions noted above. Nevertheless, these findings do provide a measure of insight into the current status of personal finance knowledge in the United States, or at least the fact that people are desirous of more information. During a 2002 committee hearing of the U.S. Senate regarding the financial awareness of college students, Jonathan Miller, speaking as Treasurer of the Commonwealth of Kentucky, called financial illiteracy in America "an epidemic" ("Importance of Financial Literacy," 2002, p. 91). According to Miller, the national savings rate had recently dropped below one percent, a remarkable statistic given it has occurred during an era of unprecedented national prosperity. Furthermore, he noted that 12% of Americans have no retirement savings whatsoever. Both of these factors suggest that financial incompetence could leave many future retirees in desperate need of financial assistance. Two studies lend helpful insights into the U.S. worker and why retirement savings and other sound financial practices may be lacking. Regarding retirement savings, Garman (1998) claimed that participation in employer retirement plans are not as high as they ought to be. Two
20 20 key reasons for this problem, according to Garman, are workers' money problems and their lack of information for and motivation to save for their own retirement. In a separate study, Garman and Leech (1997) contended that employees' personal money problems can have deleterious effects for employers' bottom lines. Based on their research, they conservatively estimated that roughly 15% of American workers are experiencing stress from mistakes and careless behaviors in their personal finances as well as from poor financial behaviors, all of which negatively impact their personal life and work life, including their employment productivity. The aforementioned cultural shift toward wider acceptance and use of credit has also contributed to poor personal finance decisions and unfortunate situations for many Americans. An examination of credit card facts and trends will help illuminate this phenomenon. According to Ritzer (1995), credit card use stimulates spending and leads to greater fiscal imprudence when compared to transacting with cash. An example of such imprudence can be found in the fast food industry. As these restaurants began allowing credit cards as a form of payment, sales increased and transactions 50-100% larger resulted (Ritzer, 1995). For many people, the money involved in credit card purchases is abstract and unreal (Roberts, 1998), an illusion that can also contribute to unwise spending behaviors. Though reports about the average American's credit card balance(s) vary somewhat, the message is clear: balances are high and getting higher. In 2001, the average cardholder's outstanding balance was $4,400--up 123% in only a decade, while personal income rose only 72% (Lim, Benjamin, Firor, Smith, & Lobet, 2001). In the first half of 2002, credit card spending jumped 8.1%, and nearly 5% of consumers were late with credit card payments (Dugas, 2002). At the end of that year, the average U.S. household carried $9,000 in credit card debt (Students in Free Enterprise, 2003). More recently, Dunleavy (2004) described a frightening new spending
21 21 phenomenon called "survival debt," in which consumers are using their credit cards for purchases such as groceries and rent, though they are not always financially equipped to pay off the balances at the end of each month. According to Dunleavy, "credit card companies are doing their best to help consumers feel comfortable acquiring debt at any point in their daily lives" (¶ 30). Unfortunately, consumers are succumbing to these companies' attractively packaged credit card offers, and when combined with the many forms of advertisement-saturated media available today, financial problems are almost guaranteed. Increasingly, it seems that the American public should go back in time and imbibe the words of T.H. Bell (1975): "You can't spend more money than you have coming in each month and avoid personal economic disaster" (p. 5). Apparently there is a great need for better consumer education at all levels, including in the postsecondary education system.
Financial Status of College Students in the United States The publication of Ernest Pascarella and Patrick Terenzini's How College Affects Students (1991) was a major boon for scholars, policy makers, and practitioners involved with higher education. Their landmark meta-analysis that summarized and synthesized several decades of research on college students has become a staple of nearly every higher education practitioner program within the U.S. and beyond, and can be credited for a variety of contributions to the body of knowledge on college students. One of the hallmarks of the text is the outcome categories delineated and described by the authors. They conceived of college affecting students in six distinct yet interrelated outcome categories, two of which are particularly salient to the present study. One category, "Change During College," pertains to the body of evidence that answers questions on whether or not students actually change during
22 22 college. An outcome category that seems to flow from the first is "Net Effects of College," in which would fall evidence that suggests changes actually are due to college. In a discussion on the net effects of college, Pascarella and Terenzini (1991) identified the difficulty of attributing change in students exclusively to one outcome category: "Change in one area may cause or be accompanied by change in other areas as well. Given this interrelatedness, estimates of change and of college's net effect in each discrete area no doubt understate college's overall, cumulative impact" (p. 566). Regardless of which outcome category deserves attribution, it is hoped that students change in positive, developmentally sound ways during their collegiate years. The implications of how the college experience affects students are many, too numerous, in fact, to articulate here. At the risk of identifying the self-evident, however, it bears acknowledgement that earning a bachelor's degree has considerable implications for an individual's lifetime earning potential. Pascarella and Terenzini (1991) suggested that the bachelor's degree holder should anticipate 20-40% higher earnings than one with a high school diploma. Indeed, "completing the bachelor's degree may be the single most important educational step in the occupational and economic attainment process" (p. 529). How college graduates manage their income is obviously an important consideration. According to Pascarella and Terenzini (1991), the more highly educated seem to be guided by different consumption values and to be more efficient consumers than persons with less formal education but equal income. In fact, formal education may actually provide acquisition and processing skills that allow individuals to make better consumer decisions (p. 552). In terms of consumer behavior, the college educated generally spend more income on housing, reading, and education but less on food, clothing, alcohol, tobacco, and transportation
23 23 than those with similar incomes but less education (U.S. Bureau of Labor Statistics, 1966, and Linden, 1967 as cited in Pascarella & Terenzini, 1991). Michael (1982) suggested that those with higher levels of education are more adept at generating facts and ideas, acquiring new information and processing it quickly, and evaluating new ideas and technologies, all of which can influence consumer behavior and seemingly future earning potential. The benefits of a higher education just described point up the challenge of ascribing effects of college on students to only one outcome category. Clearly, in terms of consumer behavior, there are differences between those with more and less education (Net Effects) as well as quality of life indices that extend later into life (Long-term Effects). Pascarella and Terenzini (1991) found some evidence that college-educated persons are more efficient in terms of saving and investing money than those with similar characteristics but less formal education. The college educated tend to save more of their income, place heavier emphasis on long-term savings for the welfare of their children, and select investment strategies that are a better hedge against inflation but also carry a higher financial risk level. Caution must be exercised, however, in interpreting this evidence; the college educated may simply view finances with a long-term perspective, which they may have developed prior to entering college. That is, the decision to attend college and accept its attendant expenses represents, for many, a forgone opportunity in the labor market, curbing earning potential temporarily at least. Thus, those who attend college may have been more forward thinking prior to matriculation, in which case college attendance may not have contributed to their long-term savings inclinations. A second volume of How College Affects Students highlights a third decade of research on college students. Therein the authors, Pascarella and Terenzini (2005), again review a massive amount of literature and research studies, but this second publication seems to contain less
24 24 information about how college affects students' and graduates' financial status. As in the first edition, most of what the authors covered regarding financial matters dealt with earnings after graduation; in that regard, the second volume is similar. Pascarella and Terenzini did find two studies suggesting that seniors have significantly lower and more realistic estimates of starting salaries after graduation than either freshmen or sophomores. Still, they point out that, despite the consistent evidence, interpreting such differences as an impact of college is problematic, as simple maturation and increased pressure on seniors to reach closure on career decisions represent other valid rival explanations for the difference. Regarding the outcome "Change During College," Pascarella and Terenzini admitted that the 1990s produced only a small body of evidence, but said it was consistent with their 1991 conclusion: "Students become more mature, knowledgeable, and focused during college in thinking about a career" (p. 534). The only financial link to this finding, however, deals with seniors being more realistic about income projections than freshmen. While Pascarella and Terenzini (1991, 2005) provided a helpful overview of what might be expected of college graduates' earnings, they offer little help in describing the financial characteristics of students during their matriculation through college. Fortunately, over the years a number of scholars have asked and answered intriguing questions about college students' financial status. Nearly four decades ago, Taylor (1968), who appears to be among the first to conduct extensive research at the intersection of college students and money management, noted that college students live and function in rather restricted financial circumstances, in which their discretionary spending is limited. Taylor remarked that students' need for knowledge and skill in personal finance is critical as they make plans to transition out of the collegiate environment and
25 25 into a lifestyle where they are earning more money and have more discretionary spending potential. Given what we know about the personal finance woes of many Americans today and how people have tended to live above their means, Taylor's (1968) closing remarks from his mid1960s research might be considered prophetic. Having conducted open-ended interviews regarding money management with 45 married couples attending the University of Oklahoma and contemplating the findings, Taylor warned of a potential danger that existed for the young couples he studied. Once they graduated and the financial limitations necessitated by their college situations were removed, their increased earning power would permit more freedom, which could lead to over-confidence. This perceived financial freedom, coupled with a reaction against the lean years of their collegiate experience, could easily lead them into debt traps. Much has changed in the United States since the mid-1960s, the higher education landscape notwithstanding. Demographic shifts have occurred in the general population and in student bodies, the cost of higher education has skyrocketed, technological developments have transpired at an astounding pace, and new, transformative communication media have flourished. So what are the financial characteristics of modern college students? In a brief journal article on the financial status of precollege students, Clow (2002), having reviewed several studies related to planning and implementing personal finance courses for such students, determined, "students do not have a good grasp of the basic concepts of personal finance or how to use them" (p. 34). If young people do not acquire sound understandings and skills in personal finance before college, they will certainly not mysteriously acquire them upon setting foot on the college campus, yet there are fiscal realities that every college student must face.
26 26 Traditionally-aged, full-time college students, because of their unique fiscal realities, do not fit the traditional pattern of high expenditures on entertainment, transportation, and personal care. In a study of the consumer expenditure patterns of college seniors, Howell (1993) found that these three categories commanded only 4.5%, 9.9%, and 2.8%, respectively, of total expenditures. Howell observed that indirect costs of attending college (i.e., total expenses minus tuition, books, and supplies) consume more than half (55.7%) of a student's budget. In addition, Howell discovered that age, marital status, and personal income were related to how students spent their resources. Interestingly, previous money management opportunities (e.g., maintaining a checking or savings account, taking a personal finance-related class, etc.) have only a very modest and inconsistent relationship to how college students spend their money (Howell, 1993). One way students increasingly spend money is via consumer credit cards. Overwhelmingly, the available research on college students' personal finance attitudes, behaviors, and knowledge revolves around credit cards and consumer debt. The topic seems to have attracted the interest of a wide array of scholars, and there is no shortage of credit-cardcarrying college students to study. Unfortunately, as Duguay (2002) pointed out, many of these young people fail at managing their first consumer credit experience, thereby establishing poor money management habits from the beginning and stumbling through life learning how to manage their finances by trial and error. The effects of irresponsible credit card use by college students can be devastating. One study found that students with high consumer debt are more prone to earn lower grades, drop out of college, wrestle with depression, file for bankruptcy, and work more hours to keep up with their bills (Roberts & Jones, 2001). There is an abundance of statistical data available on college students and credit cards. Bradshaw and Evers-Lush (1993), in a survey examination of awareness, comprehension, and
27 27 use of credit cards among college students, found that few students actually defaulted on their credit card payments, but over two-thirds paid less than half of their outstanding balance each month and nearly three-fourths paid less than the full balance due each month. Regarding the number of cards carried, just over half the respondents possessed three or more. Forty-eight percent of participants had total credit lines between $2,001 and $10,000, and 39% had a credit limit of $2,000 or less. Howell (1993) found similar results among college seniors. She surveyed students about their fiscal expenditure patterns, and discovered that the mean current total balance on credit cards and/or charge accounts was $1,249, ranging from $0 to $12,000. Regarding payment patterns, 26% paid the full balance each month, another 25% paid the minimum payment each month, and 40% paid somewhere in between the two (i.e., more than the minimum but not the full balance). Another survey project conducted by Joo and Grable (1999) queried college students about attitudes and knowledge surrounding credit card usage, among other topics. In their study, 71.5% of students owned credit cards, with an average owning three (though the range was 1 to 13). The average balance on respondents' credit cards was more than $1,700. Their findings suggested that 25-40% of all student charge card users do not fully comprehend the responsibilities and consequences of utilizing credit cards, suggesting a need for proactive money management education programs within postsecondary curricula. Another team of scholars investigated the relationship between college students' money attitudes, impulsivity, locus of control, life satisfaction, stress, and credit card debt (Norvilitis, Szablicki, & Wilson, 2003). Upon administering a series of questionnaires, the researchers discovered that over 75% of respondents had at least one credit card, with a mean balance of
28 28 $1,518 in credit card debt and a debt-to-income ratio of 0.24. The researchers also found that students who requested and received credit cards from on-campus sources had accrued more relative debt than students who obtained their credit cards from other sources. The topic of on-campus credit card marketing has been scrutinized by scholars and the media alike. Several television news programs have featured tragic incidents in which consumer debt-burdened college students have taken their own lives. One group of scholars, however, found that "attempts by universities to limit access to and use of credit cards, while well meaning, appear to be largely ineffectual" (Pinto, Parente, & Palmer, 2001b). Higher education officials and consumer advocates have increasingly expressed concerns about the potential negative effects of unlimited credit card spending on college student performance, problems such as excessive work hours to pay off balances leading to poor academic achievement. If these concerns are legitimate, and research has suggested that they are (viz., Roberts & Jones, 2001), then postsecondary education leaders need to take note. All indicators seem to suggest the cause for concern is great. Speaking before the Committee on Banking, Housing, and Urban Affairs in the U.S. Senate, Dr. Robert Manning, an expert on credit card research among college student populations, said: In 1994, when the last hearing on kiddie cards was actually held, we were looking at a period of time when it was really rare to find a student with over $5,000 in credit card debt. Today, I can go to any college across the country and find a student with anywhere from $20,000 to $25,000 in credit card debt. ("Importance of Financial Literacy," 2002, p. 15)
29 29 Though Dr. Manning's figures overshoot the average college student's credit card debt by a great deal, it is alarming to think that students, statistical outliers though they may be, on today's college campuses are mired so deeply in credit card debt. One reason some students may become so entrenched in credit card debt is compulsive purchasing tendencies. In a study by Roberts (1998), it was found that credit card use was the most important contributor explaining compulsive buying, followed by the student's sex, selfesteem, shopping frequency, perceived social status connected with buying, and television viewing. Of the participants in Roberts' study, 6% were identified as compulsive buyers. Another research project on compulsive buying among college students found that if advertising messages employ themes that target low emotional stability, high materialism, high agreeability (i.e., personable), and low conscientiousness, those messages tended to activate responses among consumers who score highly on the trait of compulsive buying. Though the number of bona fide compulsive shoppers on a campus may be relative low, it should still be an area of concern for counselors and student affairs administrators. Similar to the general public, college students seem to suffer from a lack of knowledge surrounding many personal finance issues, including but not limited to credit cards. When testifying at the Importance of Financial Literacy Among College Students (2002) hearing before a U.S. Senate committee, one speaker said college students arrive on campus with credit cards in hand but no understanding of how they work. "They do not understand what APR is. They do not understand compound interest. And they do not understand why paying only a small amount of their bill will get them into trouble later on" (p. 18). Roberts and Jones (2001) articulated a number of ways students can find themselves in financial difficulties because of credit card mismanagement, even after they have left college.
30 30 Late payments and delinquencies negatively affect students' credit reports and may hinder their ability to secure employment or gain admission into graduate school. Many employers conduct credit checks of potential employees, and many graduate schools require loans to cover the cost of tuition. With poor credit that resulted from credit card abuse, a potential graduate student may be denied access to loans needed to finance a postgraduate education. Other problems that stem from difficult personal finance situations may occur in the lives of former college students. According to Taylor and Overbey (1999), who surveyed student and nonstudent consumers regarding their financial practices and expectations, if students who have accrued sizeable credit card and student loan liability maintain high-income expectations that go unfulfilled, these students are "likely to experience increased financial instability, conflict, and stress as they leave the university environment" (p. 39). These scholars paint a rather bleak picture for students with high income expectations and poor credit management practices. Increasing debts, spiraling education costs funded by student loans, and unaffordable housing are a few factors they identify that will likely lead to financial uncertainty for such students. More recently, Gross and Keeling (2005) expressed similar concerns over the rapidly growing student loan debt levels among college students, suggesting that higher education today is "creating a debt-ridden generation" (p. 5). In the estimation of Gross and Keeling, college students today are woefully deficient in their personal finance capabilities: They cannot do basic credit math; they do not know how to determine their own credit worthiness either through establishing quality credit or by improving their credit reports and scores; they cannot create basic spending and saving plans; and they cannot unravel the myriad of lending scams to which they may be subjected. (p. 6)
31 31 These authors suggest financial competence training to be equally important in educating the whole student as teaching about alcohol and drug abuse, healthy dietary and fitness strategies, mental wellness, and so forth. When it comes to measuring the success of personal finance education initiatives on college campuses, the authors contended that testing knowledge alone is insufficient, because the goal of any consumer finance education program should also include fostering "a change in student attitudes and behaviors with respect to money and finance" (p. 9). The foregoing paragraphs on the current status of college students' personal finances suggest that the status is not good. Dr. Robert Manning would agree: "What we have before us today in higher education is a real crisis. That is, unprecedented levels of student loan debt, unprecedented levels of credit card debt, and the worst job market in over a decade" ("Importance of Financial Literacy," 2002, p. 14). According to Taylor and Overbey (1999), the solution to this crisis is education. They would suggest that, at present, college students simply do not know enough to competently and confidently navigate the maze of personal finance. Many scholars have examined this issue, which is reviewed in the following section.
College Students’ Knowledge of Money Management and Personal Finance Concerns that college students lack money management know-how are not new. In fact, a 1968 doctoral dissertation was inspired by "some rather startling reports of inability to manage finances on the part of certain couples enrolled in the University of Oklahoma" (Taylor, 1968, p. 4). The purpose of Taylor's study was to examine, through open-ended, structured interviews with 45 couples, the money management knowledge held, attitudes expressed, and spending
32 32 behaviors exhibited by participants and, based on the findings, make recommendations for personal finance education for married couples at the University. Of the 40 respondent couples who participated in the study, all reported to plan the use of their funds, but "there appeared to be a lack of clear understanding as to what planning means" (Taylor, 1968, p. 98). Regarding insurance, an important component of personal finance, participants exhibited some ambivalence regarding the topic, though nearly all of them wished they knew more about it. Clearly, even in 1968, college students were struggling with personal finance concepts such as planning and insurance, and the need for education around these and related topics seemed pressing. In 1969, another doctoral dissertation study conducted at the University of Oklahoma examined the personal finance knowledge of students completing a course on the topic with the knowledge of a similar group of students who had not taken the course. The researcher, Bernardi (1969), administered Ogden's Achievement Test for Personal Finance (Ogden, 1964) as a pretest and posttest for students enrolled in one of eight personal finance courses at the University, and also administered the same test one time (posttest only) to an equally matched group of education students. Requisite steps were taken to ensure group comparability, and after administering the posttests to each group, Bernardi compared the results and found that personal finance education was making a difference. First, when comparing the pretest and posttest results of students enrolled in the class, Bernardi found significant knowledge improvement in all but one of the content areas studied: planning, buying, borrowing, saving, investing, and protecting; sharing did not improve significantly. When comparing the personal finance enrollees' scores with the nonenrollees' scores, significant differences were found for all content areas of the achievement test. The author concluded that personal finance education was making a significant
33 33 contribution in the ability of students to manage their personal finances, and that "students who do not take personal finance have a considerable lack of knowledge of money management" (Bernardi, 1969, p. 74). A few years after the Bernardi study, Smith (1973) conducted a similar study and examined the consumer finance attitudes and achievement of college students. Following her exploration, Smith determined that college students who receive formal instruction in personal finance possess greater knowledge of credit, insurance, investments, money management, and savings than those who have not had instruction. One of Smith's notable findings dealt with work experience and personal finance knowledge. She found that work experience had a positive effect on both personal finance attitudes and achievement. Smith concluded, "it would appear to be desirable for students to have employment in order to improve their understanding and their appreciation of personal finance" (p. 39). A study undertaken at Brigham Young University (BYU) sought to assess personal and consumer finance knowledge among undergraduate students enrolled at that institution (Worthington, 1977). A criterion-referenced test developed by the Oregon Department of Education was administered to 413 undergraduate students representing males and females, singles and married students, all four academic classifications, and those who had and had not taken a course in personal finance. Based on his findings, Worthington concluded that students at BYU did not possess a level of personal finance competency adequate for intelligent consumer decision making. In one section of the test which dealt with credit concepts, students who had taken a course in personal or consumer finance scored significantly higher than students who had not completed such a course. In looking at the overall test results, however, Worthington retained the hypothesis that students who had taken a course in personal finance were no more literate in
34 34 matters of personal and consumer finance than students who had not received that type of instruction. This result stands in contrast to those found by Bernardi (1969) and Smith (1973). Worthington did concede, however, that while taking a personal or consumer finance class did not guarantee improved personal finance competence, its effects were greater than most other demographic factors examined in his study. Based upon his findings, Worthington (1977) offered seven conclusions regarding the educational needs of BYU students in matters of personal finance, conclusions which likely hold saliency for students beyond the campus environment and era in which he was writing. According to Worthington, BYU undergraduates needed better skills and understanding in basic matters of personal and consumer finance. In particular, freshmen and students who were not otherwise exposed to personal and consumer finance concepts needed the most improvement. Undergraduate students at BYU possessed adequate information to manage consumer affairs in the realms of employment/income and purchasing goods and services; however, they did not have adequate information about consumer rights and responsibilities, nor about money management as it related to financial planning, investing, insurance, and legal documentation. Another study examining personal finance knowledge was published in 1978, but this time the group under examination was community college business majors. Curtis (1978) sought to answer three primary questions: (1) Were community college business majors who had taken a collegiate personal finance course more knowledgeable about the topic than their counterparts who had not taken such a course?; (2) How did the knowledge of these personal finance-taking business majors compare with the knowledge of freshmen and sophomore business majors at four-year colleges who had taken a course in personal finance?; and (3) Did a relationship exist between students' personal finance knowledge and certain demographic factors (e.g., business
35 35 major concentration, sex, age, etc.) based upon whether students had or had not taken a personal finance course? In answering his first research question, Curtis (1978) found that the personal finance course was raising the knowledge level of students who participated in his study, and deemed it "a worthwhile course for a community college student to elect" (p. 116). Regarding his second line of inquiry, which compared community college business major enrollees with four-year institution freshmen and sophomores, all of whom had taken a personal finance course, Curtis discovered mixed results. When comparing the community college students to the four-year institution freshmen, no significant differences were found; however, when comparing the community college enrollees' knowledge with the four-year institution sophomores and with the entire four-year institution freshmen/sophomore group, significant differences in personal finance knowledge were discovered in favor of the four-year institution students. For the third research question regarding demographic factors, Curtis found several individual variables and combinations of variables that significantly increased personal finance knowledge. Among the significant variables that increased personal finance knowledge were work experience, taking a personal finance course (PF), sex and PF in combination, academic major, academic major and work experience in combination, age, socio-economic background and age in combination, and work experience and PF in combination. Upon reflecting on the impact the personal finance course was having on community college business major's knowledge of the topic, Curtis concluded that although mean scores on the Ogden (1964) test were indeed better for students who had taken a course in personal finance (24.5 correct answers out of 60 questions) than for those who had not, the average mean score for the former group was low. Curtis concluded that
36 36 "a considerable effort must be made to raise the student's personal-finance knowledges [sic] even more" (p. 116). In 1981, a doctoral research study was completed in which the consumer education knowledge of college students in Tennessee was examined. Specifically, the researcher, Moser (1981), sought to determine whether the personal finance knowledge of community college and four-year college students in Tennessee who had taken a consumer education course was higher than peer students who had not taken the course. Based upon the analysis of his researcherdeveloped consumer test, which was administered to 513 students enrolled across 11 different colleges or universities in Tennessee, Moser concluded that "no significant difference of personal finance knowledge was found between those students who had and those students who had not taken a course in Personal Finance" (p. iii). Regarding demographic characteristics as they relate to personal finance knowledge, Moser (1981) did find several significant differences worth noting. In his study, age was a significant variable. Moser established four age categories: 17-20, 21-25, 26-35, and over 35. The over 35 group differed significantly from all others. The middle two age groups did not differ from one another, but as a collective the oldest two groups did differ significantly from the youngest two groups. Like the oldest group, the 17-20 age group differed significantly from all other age categories. There were also some significant differences found between work experience and personal finance knowledge: Students who were employed full-time for more than three years scored significantly higher than those students with little or no work experience. Though Moser did not find a significant difference in personal finance knowledge between students who had and had not taken a course in personal finance, his results--which indicated that
37 37 work experience and age did significantly increase personal finance knowledge--are consistent with other research studies which preceded his (e.g., Smith, 1973; Curtis, 1978). In 1987, Danes and Hira suggested, in their rather brief literature review, that "more is known about the financial knowledge of high school students than college students. No studies were found that used college students as the sample" (p. 4). Clearly, as the preceding pages of the present literature review suggest, they were mistaken regarding the paucity of studies conducted at the intersection of college students and personal finance knowledge. Nevertheless, the findings from these scholars' investigation of college students' money management knowledge are worth reviewing. Danes and Hira surveyed 716 randomly sampled students (45% return rate, or 323 useable sets of data) at an undisclosed university, targeting in their survey money management knowledge in the following five areas: credit cards, insurance, personal loans, record keeping, and overall financial management. The Danes and Hira (1987) study contained several notable findings related to college students' money management knowledge, particularly in regard to various demographic variables. On average, respondents answered two-thirds of the overall financial management knowledge survey questions correctly. Academic classification was positively related to each of the five knowledge indexes, with the sharpest distinction emerging from the credit card knowledge index. Namely, seniors and graduate students possessed higher credit card knowledge than freshman. Students who had lived off-campus exhibited a high level of knowledge regarding credit cards and personal loans. Male students had higher knowledge levels in the areas of insurance and personal loans than females, and older students displayed greater knowledge of insurance and personal loans than younger students. Married students revealed more knowledge about credit cards, insurance, personal loans, and overall financial management
38 38 than single students. Though the authors cautioned against generalizing results beyond the institution under study, they concluded that "students had low levels of knowledge in insurance, credit cards, and overall financial management areas. These are topics that would be most appropriate for inclusion in money management lectures, workshops and seminars" (p. 15). In general, Danes and Hira believed there to be a discrepancy between what college students wished they knew about personal finance and what they actually seem to know. A decade later, two more researchers investigated college seniors' personal finance knowledge and practices. Markovich and DeVaney (1997) surveyed 500 randomly selected college seniors at a large Midwestern university, seeking to discover whether seniors had acquired requisite personal finance knowledge and practices to start their careers upon graduation. The authors hypothesized that students who were more involved in managing their own financial affairs would have greater personal finance knowledge. They further hypothesized that seniors majoring in business fields would demonstrate greater personal finance knowledge than students with other majors. The instrument administered by Markovich and DeVaney (1997) assessed seniors' knowledge of the following personal finance topics: credit use, emergency funds, insurance, investing, overall financial knowledge, and saving. The results of this study on college seniors' money management knowledge and practices are intriguing and relatively consistent with previous studies addressing similar issues. They found that seniors were not well-informed about the use of credit, but that insurance knowledge was higher than either credit use or investment knowledge. At a statistically significant level, male seniors' total knowledge of personal finance was higher than females'. Total knowledge scores across students' reported academic disciplines ranged from a high of 11.74 (out of 21 possible) for management-related majors to 6.90 for
39 39 education-related majors. Unfortunately, seniors from academic colleges whose graduates tended to earn the lowest survey scores also indicated their starting salaries were likely to be lower, causing Markovich and DeVaney (1997) to conclude, "for students who will receive lower entrylevel salaries, the importance of learning to manage money seems indisputable" (p. 64). Three additional studies published in the late-1990s provide more information regarding college students and their familiarity with personal finance topics. Munro and Hirt (1998), through a convenience sample of 310 participants, administered a 50-item survey designed to elicit data about college students' demographic characteristics and credit card payment practices. Though the results of Munro and Hirt's study will be reviewed in a subsequent section of this literature review, two remarkable conclusions from their survey of literature are worth noting here. First, their review of past research led them to conclude that budgeting, financial planning, and saving decreased as students moved from their first to last year in college. Interestingly, however, upper-division students demonstrated greater knowledge about credit cards and overall finances than their lower-division counterparts did, leading Munro and Hirt to declare, based upon studies they reviewed, "increased knowledge about credit and finances did not necessarily lead to more prudent fiscal practices by students" (p. 52). In a survey study of 924 college students, Chen and Volpe (1998) utilized a 52-item questionnaire to accomplish three primary purposes: collect evidence of personal finance literacy among college students, examine why some college students are relatively more knowledgeable than others, and examine how students' knowledge influences their opinions and decisions on personal finance matters. The overall mean percentage of correct responses on the survey was 52.87%, indicating on average students answered only about half of the survey items correctly. Respondents were fairly evenly distributed across academic disciplines (business vs. nonbusiness
40 40 majors), class rank (except for seniors, whose participation level doubled that of freshmen, sophomores, and juniors), and gender. Chen and Volpe found business majors to be more knowledgeable of personal finance issues than nonbusiness majors, graduate students to be more knowledgeable than undergraduate students, and upper-division students more knowledgeable than lower-division students. They also noted that male participants answered more questions correctly than female participants (57.40% vs. 50.77%). The researchers concluded, based upon their sample, that college students are not sufficiently knowledgeable about personal finance. A study of 242 college students' behaviors and attitudes toward credit resulted in a few notable findings about their knowledge of that topic, with a particular emphasis on credit cards (Joo & Grable, 1999). Results of a survey including questions about credit card use, attitudes toward credit, and financial knowledge revealed that 38.7% did not know the annual percentage rate of their primary credit card, only 54% knew the late fee on the credit card that they used most often, and more than 40% did not know the annual fee on their primary credit card. Joo and Grable estimated that 25%-40% of college student credit card users do not understand the consequences and obligations of credit card use, and concluded that credit and personal finance education programs are needed within higher education curricula. In 2003, Schug and Reinke overviewed a study conducted for Northwestern Mutual Financial Network by the market research firm Harris Interactive, entitled Generation 2001: The Second Study. Comprised of a national, representative sample of college seniors, the study was a follow-up to a 1997 inquiry of the class of 2001 when they were freshmen. As summarized by Schug and Reinke (2003), the results reveal disturbing knowledge gaps and a disconnect between attitude and behavior. One result which seems to support the findings of studies reviewed previously in this section indicated that "nearly half (48%) of college seniors felt 'not very
41 41 knowledgeable' or 'not very knowledgeable at all' regarding financial matters" (p. 79). In spite of this lack of personal finance knowledge, almost 75% believed it to be very likely that they would someday be able to afford the lifestyle to which they were accustomed while growing up. Lastly, while respondents rated home ownership, life insurance, and certain investment options (e.g., IRAs) as critical financial instruments, substantially fewer reported high knowledge levels about these personal finance topics. A recent study sought to determine college freshmen's personal finance knowledge. Upon administering a 20-item multiple choice financial knowledge test (maximum score = 100 points) to 407 students enrolled in English composition at Texas A&M University--Commerce, the researchers found that only one student earned a high score of 80 points, six students (1.5%) missed all 20 items, and the median score was 32.5, suggesting the average college freshman correctly answered only six or seven items out of 20 (Avard, Manton, English, & Walker, 2005). Based on their results, the researchers determined that first-year college students are not very knowledgeable of personal finance concepts, and that "universities should regard financial knowledge as being a component to their general education program and require a course in personal finance for all its students" (p. 321). For over 35 years, researchers have claimed--in one way or another--college students do not know as much as they ought to about personal finance. Whether conditions have worsened, improved, or remained the same is not altogether clear, as no longitudinal studies on college students' personal finance knowledge have been conducted. One possible indicator that conditions are worsening was discovered by Luft (2003), who reviewed the results of studies conducted by The Jump$tart Coalition for Personal Financial Literacy. In 2002, upon taking a test for personal finance literacy, students in 12th grade--one year removed from being
42 42 prospective college freshmen--answered 50.2% of the questions correctly, down from 51.9% in 2000 and 57.3% in 1997 when other groups of 12th graders had taken the same exam. These results suggest that personal finance knowledge levels of incoming college students may actually be lower than they were for cohorts in previous years.
College Students’ Attitudes about Money Management and Personal Finance Less has been written about college students' personal finance attitudes than their knowledge levels, yet attitudes are an important contributor to a consumer's financial success or demise. Nonetheless, several studies have been conducted that examine students' money management and personal finance attitudes, either in isolation or concomitantly with knowledge or behaviors. In a study conducted by an honors program bachelor's degree candidate at the prestigious University of Exeter in the United Kingdom, Davies and Lea (1995) examined college students' attitudes toward debt. Though the subjects were enrollees in a university outside of the U.S., the findings hold saliency for this portion of the literature review. In this pseudo-longitudinal survey research project, Davies and Lea sampled students from each undergraduate academic year and administered a questionnaire containing items comprising an attitude scale, life events scale, and locus of control (external vs. internal) scale. The researchers found that not all students carried debt loads, but debtors did have several notable characteristics: They tended to be older, have a more prodebt attitude, carry several types of debt, worry less about their bank account balance, and to be male. Davies and Lea also determined that debt level was associated with being further
43 43 along in university study, possessing more credit cards, being atheist or agnostic instead of protestant in religion, and displaying a more pro-debt attitude. To examine college student credit card use, Hayhoe, Leach, and Turner (1999) solicited participation in a survey research study from 2,500 students across five public universities in the United States. Upon reviewing literature related to their topic, the authors claimed, "college students of today were raised in a time of easy credit and living beyond one's means. This indicates that students may be more likely to view credit and debt with a favorable attitude" (p. 647). Hayhoe and her colleagues were able to confirm their assumption. Their survey was comprised of two previously published surveys, a credit attitudes scale, and a money beliefs and behavior scale. Achieving a 17% survey response rate, the authors found students who do not possess credit cards do feel an affective, or emotional, "high" using credit cards, while students with four or more credit cards posted higher scores on the affective credit attitude scale. The researchers also noted that older students had more credit cards and displayed higher affective credit attitudes. Introduced in the previous section of this literature review, Joo and Grable (1999) elucidated several findings related to college students' personal finance attitudes. In bulleted lists, the authors posted several notable findings. Nearly 70% of their participants agreed that credit card use can result in costs that are too high, and 93% agreed that overspending with credit cards is a strong likelihood. Three quarters of respondents admitted fearing the consequences of overspending with credit cards. Meanwhile, roughly 40% of students surveyed listed "convenience" as their number one reason for using credit cards, while 20% admitted their main reasons for using credit cards were emergencies and cash shortage.
44 44 A team of scholars collaborated to examine spending habits and credit use among college students who attended one of six public universities (Hayhoe, Leach, Turner, Bruin, & Lawrence, 2000). A total of 3,000 surveys were distributed to 500 students at each institution, with 480 students (16%) responding. The study had three primary purposes: (1) examining the impact of gender on credit card use and personal finance practices, (2) investigating the impact of the affective use of credit (i.e., how using credit makes one feel) on students' purchasing and personal finance behaviors, and (3) introducing a model that displays the interaction between several variables (viz., affective credit attitude, financial stressors, number of credit cards with a balance, personal finance practices, and variety of purchases). Several notable findings emerged from the Hayhoe et al. (2000) study. Gender and affective credit attitude influenced the types of goods and services purchased as well as financial practices. Female students used their credit cards more than males to purchase clothes, while males used plastic to eat out, buy electronics, and pursue entertainment. The authors' ability to introduce a model displaying the interaction among the variables under examination was mixed. They did find that higher affective credit attitudes and lower numbers of financial management practices increased the likelihood that students would carry a balance on several credit cards. Hayhoe et al. also discovered that male students who applied fewer financial practices were more likely to experience financial stressors (e.g., inability to purchase clothing, pay utilities or medical bills, save for emergencies, keep their car running, discuss financial matters without getting upset, or keep financial concerns from affecting relationships). A similar relationship was found for female students but the coefficient was significantly stronger, suggesting the importance of applying sound financial principles for all students, regardless of gender.
45 45 In a single-campus survey research project consisting of 216 education majors enrolled in randomly selected education courses, Henry, Weber, and Yarbrough (2001) sought to identify money management practices of college students. Though the line of inquiry was mostly geared around budgeting behaviors and demographic items elicited through a brief 13-item survey, the researchers did uncover a few attitudinal characteristics as well. Based on survey results, it seemed that students either lacked knowledge of money management practices or were simply not willing to expend the time and effort required to manage their money. Indeed, the majority of respondents did not maintain a written budget, though the authors did not speculate on how this behavior might be related to students' personal finance attitudes. Another line of inquiry pursued at the intersection of college students and personal finance involved compulsive buying tendencies. Roberts and Jones (2001) sought to discover how money attitudes and credit card use might play a role in compulsive buying among college students. In discussing their findings, the authors noted that consumers who were less concerned about price were likelier to be compulsive buyers. They also found a positive association between compulsive buying behavior and consumers who experienced higher levels of anxiety and stress regarding money matters. Hayhoe (2002), in following up on a previous study conducted with colleagues (Hayhoe, Leach, & Turner, 1999), used data from the collaborative project to follow up with former participant-students who had since graduated from or matriculated further through their institution. Between the two study years--1997 and 1999--60 students had graduated. Contrary to her hypotheses, Hayhoe discovered that 40% of respondents had lower affective credit scores, 18% remained steady, and 35% showed higher affect scores. One significant relationship was found: Graduates were much more likely to score lower than before on the affective credit scale.
46 46 Hayhoe warned that students with favorable credit attitudes may be more prone to misuse credit, and suggested that educators place greater emphasis on teaching students the long-term effects of debt. According to Hayhoe, "helping students realize how much the debt actually costs and how long it takes to repay may influence the amount of debt incurred" (p. 75). Whether the topic of interest is budgeting, compulsive buying, credit card use, or money management practices, the literature makes one thing quite clear: college students' attitudes regarding personal finance matter a great deal, and as subsequent sections of this chapter will make clear, students' attitudes seem to be inextricably intertwined with their behaviors and knowledge.
College Students’ Behaviors Regarding Money Management and Personal Finance According to best-selling author and nationally syndicated radio talk show host Dave Ramsey, a consumer advocate and personal finance educator, personal finance is 20% knowledge and 80% behavior (Ramsey, 2003). That is, the actual concepts one must grasp to experience success is the area of personal finance are not that difficult to comprehend. Some say that "knowing is half the battle," but according to Ramsey's calculation, knowing is only 20% of the battle. The greater battle that must be waged and won for consumers to truly be successful in personal financial matters is behavioral. Professors of finance and accounting, Shim and Siegel (1991), in their textbook on the theory and problems of personal finance, underscored the importance of behavior as an essential ingredient for financial success: "Even with a moderate level of income, you can build substantial wealth by exercising discipline [italics added] in your financial affairs" (p. 1). Of the studies conducted over the years at the crossroads of college
47 47 students and personal finance, the interest in their behaviors seems to have dominated this segment of academe. Indeed, many scholars have added to the body of knowledge in this area, as the following portion of the literature review will reveal. Taylor's (1968) doctoral dissertation, the methodology of which was reviewed in detail in a previous section of this literature review, contained several important findings related to married college students and their money management behaviors. Regarding planning, Taylor noted that most couples planned on a month-to-month basis as opposed to a long-term basis, and 31 couples admitted their budgeting was "mostly mental" while nine kept detailed cash flow plans and records of expenditures. Regarding giving to their local church or other worthy causes, most couples felt unable to give due to scarcity of resources; however, most couples did report making small, irregular contributions to assorted causes. Based upon interviews with the 40 participating couples, Taylor concluded that married students who earned money early in life and were responsible for spending it demonstrated a greater ability to manage their personal finances well in marriage, when education was their major goal and income for obtaining it was limited. In a survey research study involving year 1979 data from 877 college students enrolled in one of three institutions of higher education in the central New York state region, Heck (1984) sought to identify determinants of financial management behaviors among participants. The researcher believed this to be an important line of inquiry for several reasons. First, she believed developing a collection of routine personal finance behaviors would increase the likelihood of financial success and security. Second, Heck felt studying the personal finance behavior of students to be important because students' money management skills provide an experience base for financial activity later in life. According to Heck, most students' success in life depends largely upon their ability to establish financial goals and implement strategies for achieving
48 48 them. Additionally, and perhaps most importantly, "students are not only an important group of consumers, but their management skills and behaviors are harbingers of future consumer vitality in the marketplace and in the home," so it is important that their personal finance behaviors be examined (p. 13). Heck's study examined nine personal finance behaviors. In the list that follows, the first four were identified by the researcher as "planning behaviors" and the latter five are "implementing behaviors": (1) setting financial goals; (2) estimating expenses accurately; (3) estimating income accurately; (4) planning and budgeting one's spending; (5) considering several alternatives when making a financial decision; (6) adjusting to meet financial emergencies; (7) meeting deadlines or bills on time; (8) successfully meeting financial goals; and (9) successfully carrying out a spending plan (p. 13). Heck found significant associations between a number of personal finance behaviors and college student demographic characteristics. Students were more apt to display personal finance planning behaviors if they were a college senior, majoring in natural sciences, taking a greater number of classes, employed, and married. The only positive association between students who were not employed was in their ability to estimate expenses accurately. Planning behaviors were somewhat prevalent among students with higher grade point averages and higher overall incomes. Female students and students who perceived their incomes to be inadequate were less likely to engage in planning behaviors. In addition, nonwhite students tended to plan a budget but were prone to inaccurately estimate income. Regarding the implementing behaviors outlined by Heck, students who engaged in these practices tended to be seniors, natural science majors, apartment renters, not employed, female, nonwhite, and married. For the employed, hours worked each week was positively associated
49 49 only with the behavior of paying bills on time. As with planning behaviors, students holding higher grade point averages and higher overall incomes were more likely to engage in some of the implementing behaviors. Implementing behaviors were not prevalent among students who depended financially on their parents and perceived their income as inadequate for meeting their needs. In an investigation of personal finance behaviors among college seniors attending public universities during the 1991-1992 academic year, Howell (1993) analyzed survey data provided by 482 of the 14,242 college seniors enrolled in one of eight public universities in Mississippi. A three-part profile was utilized to address her first research question regarding patterns of spending behavior and money management reported by the participating students: "patterns of expenditure behavior, methods of payment utilized, and money management practices" (p. 120). Howell found that 66% used checks frequently when paying for goods or services, 62% said that they frequently used cash when buying, 40% said that they used a credit card occasionally for purchases, and 59% said they never used a money order. In addition, Howell discovered that credit cards were used most often for clothing, transportation, and food. One-half of students reported that they sometimes used a budget. The data revealed that students' income and credit card usage were inversely related, with higher incomes resulting in lower usage. Regarding married college students, Howell found that impulsive purchases were reduced, and students demonstrated a more self-proclaimed conservative attitude towards managing their fiscal resources. A survey administered among a random sample of 3,000 college juniors and seniors enrolled in one of three Texas universities was designed to gather data regarding how students obtained credit cards, how they used credit cards, and the manner in which their credit card debt
50 50 was managed (Allen & Jover, 1997). In analyzing the data garnered from 633 usable surveys, the researchers found that the average college student who used credit carried a consumer debt load of over $1,000 and the two most commonly purchased items were clothing and entertainment. Students reported that half of the credit cards they used most regularly had an annual percentage rate ranging from 17-20%, and only 13.5% of participants paid the entire card balance before the due date. Slightly less than one-third of respondents used their credit cards to receive cash advances. Allen and Jover also found ethnic differences in credit card delinquency notices: 44% of African Americans had received a delinquency notice, 35% of Hispanics reported receiving one, and 28% of Caucasians acknowledged receiving a delinquency notice. A research study conducted by Munro and Hirt (1998), the methodological details of which were reviewed in a previous section of this chapter, resulted in several interesting findings about the nature of students who pay off their credit cards responsibly compared to those who demonstrate less favorable behaviors. Students who used credit cards responsibly (convenience payers) were much more prone to be White freshmen or sophomores who obtained their credit cards prior to entering college or who had possessed their card for less than a year. Students who exhibited less wise credit card payment patterns (revolving payers) tended to be racial minorities, upper-division or graduate students who obtained their cards after entering college or who had owned their cards for three years or more. Revolving payers were more likely to be financial aid recipients, and if they were revolving payers on one credit card, they were more likely to participate in this payment practice on all credit cards, a practice which can lead to the accrual of substantial amounts of debt. In a qualitative inquiry into the money management practices of 17 freshmen and sophomore college students, Hirt and Nick (1999) conducted in-depth interviews with
51 51 participants and also reviewed respondents' financial documents (e.g., checkbook registers, credit card statements). Though they erroneously claimed that "an extensive review of the literature revealed no studies on the actual fiscal management behaviors of college students," their study did add to the body of knowledge surrounding this topic (p. 351). Hirt and Nick undertook data analysis with two primary purposes: understanding what students did with their money, and discerning how and why they made the financial decisions they did. Based upon the interview data and student records reviewed, two themes emerged, and participants were assigned to one of two personal finance positions based on their comments: "well-developed" financial skills or "under-developed" financial skills" (p. 354). Of the 17 participants, nine were placed in the welldeveloped skill category while eight were classified as having under-developed skills. Hirt and Nick (1998) also found a variety of demographic differences in students' money management practices. On-campus freshmen and off-campus sophomores expended more than their income during the inquiry period. In fact, on-campus freshmen spent five times more than their income. Regarding the on-campus freshmen, Hirt and Nick pointed to psychosocial development, as articulated by Chickering and Reisser (1993), as part of the issue: "The fact that their expenses far exceeded their income suggests that they were not managing their financial lives very successfully, and that instrumental independence was still a major challenge they needed to address" (p. 356). Hirt and Nick (1998) noticed that on-campus sophomores spent less than their income, but the sources of income were different than for freshmen. Sophomores received more allowance and also earned more through employment than their freshmen counterparts; however, the researchers also attributed the difference in expenditures to the sophomores having achieved a greater degree of instrumental independence. Although off-campus sophomores did not live
52 52 within their means, they did appear to have effectively realized emotional independence, since local relationships with peers were more numerous and prominent than attachments to family members. Regarding instrumental independence, however, the off-campus sophomores, with their new financial responsibilities, were not properly managing their resources since they were not living within their means. Already alluded to in previous sections of this literature review chapter, the Joo and Grable (1999) study also contained a few findings regarding college students' personal finance behaviors in the area of credit card use. They found that fewer than 50% of respondents paid credit card bills in full, slightly over one-third reported maxing out one or more credit cards, and more than 30% admitted to using their credit card impulsively. Using a convenience sample of 68 university student consumers and 83 nonstudent consumers, Taylor and Overbey (1999) posited that students were amassing credit card debt and student loan balances while also holding high expectations of future earnings. The researchers sought to determine whether students' expectations were realistic by comparing them to nonstudent consumers. Regarding the first part of their hypothesis, which dealt with the behavior of debt accumulation, the data revealed that 51% of students surveyed and 41% of nonstudent participants reported using credit cards on a regular basis. Regarding the utilization of a monthly budget, 43% of students and 66% of nonstudents engaged in this practice. In a study designed to examine the thought processes of college students regarding credit card acquisition, Kidwell and Turrisi (2000) administered a 20-item questionnaire to 304 students enrolled in introductory psychology at a university in the Northwestern United States. Nearly 60% of the sample reported possessing at least one credit card, while 40% stated they carried two or more. The authors were interested in discovering, through analyzing models of
53 53 behaviors and attitudes, factors that increased the likelihood that students would acquire a credit card. The authors found that when students (a) positively perceived marketing strategies, (b) had favorable past experiences with credit, (c) anticipated increased future income, (d) determined a need to build a credit history, (e) desired perceived financial safety, and (f) felt the need to have credit cards, they were prone to take on new credit cards. Kidwell and Turrisi found that a college students' decision to acquire a credit card depended heavily on their perception of the alternatives to obtaining a new credit card. For instance, if students feel embarrassed by borrowing money from someone else, or are worried about having insufficient funds to write a check or withdraw cash, then the alternative of obtaining a new credit card was perceived more favorably. Researchers have found several differences between male and female college students regarding their personal finance behaviors. Hayhoe et al. (2000) conducted a study, which was overviewed in some detail in a previous section of this literature review, and found several differences. Female students were more likely than male students to report that they kept a written budget, shopped with a list, retained bills and receipts, planned spending, and saved regularly. Female respondents were also more prone than their male counterparts to feel remorse over a purchase and to write a check with insufficient funds. Pinto, Parente, and Palmer (2001a), in an examination of college students' academic performance and their credit card usage, examined the results of a survey completed by 260 university students across three college campuses in the Northeastern United States. They found several significant findings in the realms of both gender and academic performance. Regarding gender, female students, regardless of academic classification, possessed significantly more credit cards than male students. Juniors and seniors owned significantly more credit cards than
54 54 freshmen and sophomores. Regarding academic performance, students labeled as high performers were significantly more apprehensive about their credit card use than low performing students. The researchers found this result to be consistent with anecdotal notions that high performing students tended to be anxious about many things. Low performing students tended to worry less about paying off their credit card debt than high performers, and low performers seemed to rationalize the use of credit cards. Pinto et al. (2001a) also examined personal finance behaviors against the variables of academic performance and employment in combination. They found notable differences between how the two groups--low performers and high performers--viewed credit cards affecting their academic performance. Low performers revealed that paying off credit card debt was the main reason for their employment, and believed that they would be better academic performers if they did not have to work to keep up with credit card debt. High academic performers did not share the same perceived need for employment to pay off credit card debts, but their responses revealed a different detrimental effect from credit card spending: higher anxiety levels. The previously reviewed Henry, Weber, and Yarbrough (2001) research project regarding college students' money management practices contains several significant findings relevant to personal finance behaviors. They found female collegians more likely to have a budget than their male counterparts, married students more prone to follow their budgets, and those aged 36-40 were tending to follow their budgets most of the time. In addition, Henry et al. found differences in debt level between undergraduate and graduate students: 40% of the former carried debt compared with 96% of the latter. Dr. Robert Manning, an expert researcher on college student credit card use, who spoke before a committee of the U.S. Senate on college students' financial literacy, reported a
55 55 disturbing personal finance behavior among college students from his own research. Manning found that 70% of students are using their student loans to pay for their credit cards ("Importance of Financial Literacy," 2002). To round out this portion of the review of literature and segue to the next, an excerpt by Schug and Reinke (2003), who asked the question, "Why don't people save when they know they should?", identifies a national epidemic in the U.S.--a dismal rate of personal savings--as well as the interrelatedness of attitudes, behaviors, and knowledge in the area of personal finance. According to these scholars, people are often slow to change their financial behavior because the benefits of doing so may not be immediately realized. Regarding saving and investing, Schug and Reinke acknowledged that the benefits are uncertain and the outcomes only realized at some time in the future: "Perhaps in trying to save and invest, you will make poor financial choices that do not yield the returns you expected. Worse, perhaps you won't live long enough to enjoy the benefits" (p. 80). Investing, like so many other aspects of personal finance, involves attitudes, behaviors, and knowledge. As the next section of this literature survey will demonstrate, the three are nearly always inextricably intertwined.
The Interrelatedness of Attitudes, Behaviors, and Knowledge in Personal Finance Upon reviewing many of the published empirical research projects for the present study, it becomes clear that in matters of personal finance, the lines between attitudes, behaviors, and knowledge sometimes blur. In fact, the three seem to be interrelated. Some student-participants in the studies reviewed here exercised sound personal finance behaviors, which flowed out of their attitudes and knowledge. Conversely, others demonstrated unwise, or perhaps uninformed,
56 56 money management practices, which also resulted largely from their held attitudes and knowledge. According to King (2003), learning can be defined as an outcome or as a process. As an outcome, learning "includes the knowledge, skills, and attitudes that serve as a foundation for wisdom" (p. 235). In this section of the literature survey, research findings will be reviewed that demonstrate the blending of personal finance attitudes, behaviors (or skills), and knowledge. As some findings will reveal, however, attitudes, behaviors, and knowledge do not always work together in a manner one might expect (e.g., fiscally sound attitudes do not always lead to prudent financial behaviors). Returning again to one of the early comprehensive research studies at the intersection of college students and personal finance, Taylor's (1968) project certainly shed light on the interconnectedness of attitudes, behaviors, and knowledge. The very essence of Taylor's inquiry revolved around these three components of the human experience: "The problem of this study was to determine the understandings held, attitudes expressed, and spending patterns exhibited by married university students, and, on the basis of the findings, make recommendations relative to family finance education" (p. 4). Taylor also examined respondents' attitudes, behaviors, and knowledge of saving, finding that more couples affirmed the value of saving money more than any other personal finance practice in the study. Interestingly, though participants seemed to have good intentions in the area of saving, many couples either lacked the commitment or the knowledge needed to sustain a savings initiative. Regarding borrowing, another central personal finance concept, Taylor found that nearly half of the participating couples displayed opposition to the idea of borrowing. Several couples, however, reported using payment plans for major purchases or to increase assets, even though they were opposed to the idea of paying interest. In
57 57 this instance, there was awareness of interest accrual and its effects (knowledge), distaste for making interest payments (attitude), but a decision to make a purchase on credit (behavior). Though it was conducted with high school students, a 1985 study sought to test the hypothesis that "there is no relationship between knowledge of economic concepts and attitudes toward economics" (Holyoak, Harter, & Wolfe, 1985, p. 21). The researchers wanted to test the affective and cognitive impacts of a high school personal finance curriculum on students using a quasi-experimental design in which students in the experimental groups were introduced to a new curriculum and in control groups taught in the traditional method. Though their hypothesis was rejected, indicating that there is a relationship between consumer economics attitudes and knowledge, the researchers confessed that the resultant coefficients represented a weak test of the relationship. A pair of scholars undertook a survey research project intended to examine college students' use and knowledge of credit cards (Bradshaw & Evers-Lush, 1993). Having received 495 useable surveys completed by students enrolled at universities across the Southern region of the United States, the researchers analyzed the data and found several instances where students' behaviors did not seem to suggest the application of sound knowledge. For instance, while most student-respondents reported being knowledgeable of credit cards, they were willing to pay high interest rates applied by the credit card banks. Regarding the types of credit card payment behaviors demonstrated, the authors suggested that students were not necessarily judicious users of credit since most of them paid less than half of the full card balance each month. Some researchers have found disconnects between what students do with their money and what they know about money management. Markovich and DeVaney (1997), for instance, found students to be more satisfied with their personal finance skills than with their knowledge. Hirt
58 58 and Nick (1999) identified disconnects between students' actual behaviors (e.g., expenditures exceeded income) and they way they described themselves (e.g., having good family financial relations and well-developed financial knowledge and skills). As Hirt and Nick explained, there is a difference between perceived and actual financial management skills among students; however, "such differences between perception and reality may not be uncommon among students and are consistent with the developmental notion that students can understand issues intellectually but not necessarily behave in ways that reflect that understanding" (p. 358). A trio of researchers sought to identify factors that influence the level of credit card debt among college students (Norvilitis, Szablicki, & Wilson, 2003). In so doing, they found evidence suggesting that students' personal finance attitudes are unrelated to their behaviors. Contrary to much of what was hypothesized by Norvilitis et al., attitudes about money were associated with personality variables but appeared not to be related to behaviors. The researchers suggested that the relationship between debt attitudes and behaviors may be influenced by several different variables. For instance, students may think that any debt carried would be temporary and not connected with a debt lifestyle. Also, since "that which is salient is often related to predicting behavior . . . leading a comfortable lifestyle may be more salient than the prospect of debt in the seemingly distant future" (p. 944). That is, students may think taking on debt worth it to be comfortable now, regardless of the financial implications they will face later. There may also be a peer influence factor in debt attitudes and behaviors. Students' perceptions of the lifestyles and debt loads of their peers may influence their own behavior. Based on the results of the study, and particularly the lack of relationship found between personal finance attitudes and behaviors, Norvilitis et al. (2003) concluded with a challenge for future researchers and those who would attempt to help students eliminate credit card debt. They
59 59 posited that "knowledge of financial issues, rather than attitudes alone, may be a key to reducing the problem of student credit-card debt" (p. 944). More than likely, however, it will take a sustained, concentrated educational focus on all three aspects of personal finance: attitudes, behaviors, and knowledge.
Student Development Theory Meets Personal Finance According to Hirt and Nick (1999), financial management skills are "mentioned only tangentially in student development theory, the body of work that guides so much of professional practice" in student affairs and other sectors of higher education (p. 350). These scholars did not find a cognitive development theory that addressed financial management, though they did locate one theory, described in the following paragraphs, in the psychosocial development literature that addressed the topic. Chickering and Reisser (1993), in their landmark publication that provides a practical theory of psychosocial development, outline seven "vectors" of human development through which college students typically pass during their undergraduate experience. These developmental vectors, though not to be considered precise, lock-step stages, do serve as "maps to help us determine where students are and which way they are heading" (p. 34). Though not all seven vectors will receive consideration here, nor do they all have direct applicability to students' personal financial lives, an introduction of the seven vectors by name may be useful. From first to seventh, Chickering and Reisser have labeled their developmental vectors as follows: Developing Competence, Managing Emotions, Moving through Autonomy toward Interdependence, Developing Mature Interpersonal Relationships, Establishing Identity, Developing Purpose, and Developing Integrity.
60 60 In their text, Chickering and Reisser (1993) alluded to personal finance issues as one area that interfaces with the psychosocial development of college students. For instance, in regard to the second vector of their theory, Managing Emotions, the authors claimed: "Students are anxious about all kinds of things. . . . Students [are] worried about intimate relationships, parental conflicts, finances [italics added], and interpersonal conflicts with friends" (p. 91). According to their theory, before students work through the process of learning to better manage their emotions, they may initially struggle with issues of competence. Chickering and Reisser (1993) depicted their first vector, Developing Competence, as a three-tined pitchfork comprised of three interrelated forms of competence: intellectual competence, physical and manual competence, and interpersonal competence. The handle of this metaphoric pitchfork is critically important, and has been described by the theorists as "the overarching sense of competence that reflects people's assessment of their capabilities" (p. 53). In a commentary printed in the Journal of College Student Development soon after Chickering and Reisser revised Chickering's (1969) original version of the theory, Reisser (1995) suggested that "as students come to trust their abilities and the worth of their accomplishments, an overall sense of competence increases" (p. 506). Developing competence in the area of personal finance would seem to fall under the categories of intellectual competence and interpersonal competence. For instance, when students learn to balance their own checkbooks, and to comprehend the process of comparing their own records with the bank's, they have achieved a greater sense of intellectual competence. A student who successfully works with a customer service agent at a cellular phone company regarding his or her bill might be identified as having developed greater interpersonal competence, particularly
61 61 if such interactions had in the past been eschewed by the student and delegated to a parent or avoided altogether. The third vector, Moving through Autonomy toward Interdependence, incorporates three important components of development. These first two components of this vector-- emotional independence and instrumental independence--generally reflect increasing levels of autonomy, defined as "mastery of oneself and one's powers" (Chickering & Reisser, 1993, p. 118). Emotional independence suggests diminution of continual and pressing needs for affection, approval, or reassurance. Initially, individuals begin to separate from parents and transfer emotional reliance to peers, nonparental adults, or other reference groups, until finally the person becomes comfortable alone or with company and has no need to cling. A fairly self-explanatory concept, instrumental independence has two primary parts: the ability to solve problems and organize activities in a self-directed manner, and the ability to be mobile, to move about on one's own. The capstone component of this vector is interdependence, defined as "respecting the autonomy of others and looking for ways to give and take with an ever-expanding circle of friends" (p. 140). Instrumental independence, a component of Moving through Autonomy toward Interdependence, certainly has a nexus to personal finance management. In fact, Chickering and Reisser (1993) noted in their text that the ability to manage money is one developmental task connected with achieving instrumental independence (p. 133). A good example would be a student who has obtained a job and then takes his or her earnings, allocates it in a well-conceived budget, and spends, saves, and gives according to his or her cash flow plan. Hirt and Nick (1999) used Chickering and Reisser's (1993) theory as a lens through which to consider developmental implications regarding how college students manage money.
62 62 They concluded their study by suggesting that personal finance management is an area of development in which students need support, and contended that little support had been offered to students in the past. Graham and Cockriel (1996) would likely agree that students have received little support in the area of learning how to manage money. In assessing the impact of college on students' social and personal development, Graham and Cockriel examined 36 areas of personal and social growth to determine whether a tangible impact could be traced to the college experience. Laudably, 28 of the 36 areas of personal and social growth achieved what the researchers called "tangible college impact" (p. 508). Regrettably, one of the eight areas found not to have such an impact was managing finances. Many scholars have emphasized the importance of learning to manage personal finances. Shim and Siegel (1991) asserted that financial planning can start at any age, but sooner is better. They further suggested that people with even a moderate level of income can still build substantial wealth through personal discipline in financial affairs. If sooner is better for Shim and Siegel, for Pascarella and Terenzini (1991), timing of educational initiatives is critical: "Designing maximally effective educational interventions requires knowing when an intervention will make a difference and when it will not" (p. 634). Fortunately, there are conceptual models that can be applied to help scholars understand if educational interventions are making a difference, and based on their discovery, perhaps they can determine when the interventions should be implemented to achieve maximum effectiveness.
63 63 Input-Environment-Outcome (I-E-O) Model for Assessment in Higher Education Renowned higher education scholar Alexander Astin (1993) developed what he named the input-environment-outcome, or I-E-O, model as a conceptual framework for assessment activities in higher education. Inputs refer to personal characteristics students bring into the educational program (e.g., aptitude, aspirations, background, gender, etc.). Outcomes refer to the "talents" that faculty and staff try to develop in students through their educational programs (Astin, 1993, p. 18), and these are most often reported in measures such as test scores, grade point averages, retention rates, and so forth. The environment refers to students' actual experiences during their affiliation with the educational program. For Astin, the overriding purpose of assessment activities within higher education should be to enhance educational functions in colleges and universities to bring about talent development in students. For this reason, the environment component of the I-E-O model is critical, "since the environment includes those things that the educator directly controls in order to develop the student's talents" (p. 18). Beyond the selection process during admission, college and university personnel can do little to control the inputs of students who join their campus community, and to some extent, they cannot control the outcomes, either, as Astin has found that inputs are often predictive of outcomes. The environment, on the other hand, is firmly within the institution's control, and educational environments most certainly influence learning outcomes. Scholars should be cautious about ascribing credit (or impact) to an educational environment when a positive student outcome is realized. Inputs contribute heavily to outcomes, but environments do indeed make a difference. It boils down to causation versus correlation. A causal influence (i.e., impact) suggests that one thing caused another, and ascribing causation is
64 64 impossible outside of the realm of the experimental, or control group, scientific approach (and even then it can be suspect). In natural experiments, where subjects are not randomly assigned and control groups are absent, one cannot ascribe causation per se. Astin (1993), however, argues that making causal inferences from correlational data is possible, but must be done with care through controlling as many biasing input variables as possible. In the area of personal finance education research, scholars have utilized natural experiments to make claims about student learning within higher education. For instance, Moser (1981) compared the consumer education knowledge of students who had and who had not taken a course in personal finance. Student participants were not randomly assigned to groups in Moser's study, making it a natural experiment. Nevertheless, Moser (1981) found "no significant difference of personal finance knowledge . . . between those students who had and those students who had not taken a course in Personal Finance" (p. iii) and concluded that "considerable effort should be made to improve the quality of instruction and the way consumer education is currently being delivered" (p. iv). By surmising that the personal finance course was not having its intended impact--namely, teaching students sufficient personal finance knowledge so as to differentiate them from students who had not taken the course--Moser concluded that, in Astin's terms, the environment should be improved to enhance outcomes (i.e., development of students' talents in the area of personal finance). Absent from the Moser study, and many higher education research endeavors for that matter, was an inclusion of inputs, which are often difficult to account for. Some inputs, such as indicators of academic preparedness, are easier to ascertain than other inputs, such as social tendencies and worldviews, which are often demarcated along generational lines and change over the years as new cohorts of students enter the gates of the academy.
65 65 The Millennial Generation: Today's College Consumer For many years now, sociologists and other scholars have undertaken studies of generations, cohorts of people who are born within a particular range of years, experience similar life events as impacted by societal and even global changes or occurrences, and often carry a similar set of attitudes about issues, or at least a common lens through which to view them. Among the most notable of the "generations scholars" are collaborative researchers William Strauss and Neil Howe (Strauss & Howe, 1991; Howe & Strauss, 2003), who have written extensively about past and present generations in the United States. Familiar terms for recent cohorts have been the Silent Generation (birth years 1925 to 1942), Baby Boomers (birth years 1943 to 1960), and Generation X (1961 to 1981; Coomes & DeBard, 2004). First-year students and seniors pursuing their studies at colleges and universities during the fall 2005 semester were typically born in the academic years 1986-1987 and 1983-1984, respectively, which places them in the latest major birth cohort of the present era, the Millennial Generation (birth years 1982 to 2002). For the most part, today's college students were raised by Baby Boom parents who have raised them in such a way that they represent a unique student cohort which differs from groups that have passed through America's colleges and universities in previous years. A number of scholars have studied and described the Millennial generation, including DeBard (2004), who succinctly articulated the characteristics of the cohort. Millennials were born when "baby on board" signs were widely displayed in vehicle windows in which parents were transporting their child in the safety and security of a high quality car seat. From birth, Millennials have been protected, sheltered, made to feel special, and subject to highly structured and scheduled lives. From home to school to extracurricular activities, Millennials have been nurtured through awards
66 66 and rewards, which has given them a sense of confidence but also driven them to seek achievement. They are typically team-oriented instead of individualistic, but their scheduled and achieving childhood has left them feeling pressured. Their formative years were in many respects different from those of preceding generations, and the experiences of their childhoods and adolescent years have shaped who they have become as young adults entering college. One difference between Millennials and their predecessors is the relative wealth of their families. According to DeBard (2004), there are relatively more wealthy parents who have raised the Millennial generation than previous cohorts, though there are nearly as many families (approximately 14%) who earn $25,000 or below. Still, the relative wealth of parents and the increasing level of interaction between young people and the marketplace has led Millennials to be pursued as an important consumer group by those who would sell them a product or service, colleges and universities notwithstanding. As consumer spending patterns have shifted and the means to make purchases have proliferated (e.g., more ways to finance items than previously, affinity credit cards, speed pass credit cards, check/debit cards, etc.), it is only logical to conclude that Millennials will have a different perspective on consumption and personal finance than previous generations. For example, Davies (1995) found that "some authors (e.g., Etzioni, 1988) have argued for a generational shift in attitudes, with traditional hostility to debt now breaking down. Current students grew up in the easy-credit 1980s and might be expected to be relatively tolerant of credit and debt" (p. 665). The fact that more students are carrying more debt--both credit card and student loan--than ever before suggests that today's college student is indeed less debt-averse than their predecessors, or at least they are more willing to take on debt than previous college students have been. As student affairs administrators consider programs and services to meet the
67 67 needs of Millennial collegians, it is imperative that they understand the generation and its characteristics, composition, inclinations, and preferences so that resources are spent wisely and are designed for maximum impact and satisfaction.
Overview of Baptist Higher Education in Texas According to Pascarella and Terenzini (2005), scholarly research of the 1990s offers little information about the net impact of institutional type (e.g., public, private, two-year, or fouryear) on students' knowledge acquisition or overall cognitive development. They asserted, however, that some credible evidence suggests that small, private liberal arts institutions, including those that are religiously affiliated, may be especially effective at facilitating development in principled moral reasoning. This concept, principled moral reasoning, refers to "the extent to which an individual uses principled reasoning or prefers principled considerations in making a judgment or decision about [a] dilemma" (Pascarella & Terenzini, 2005, p. 346). Due to their strong Christian heritage, Baptist-affiliated universities in Texas and beyond are most certainly interested in developing students' capacity for principled moral reasoning. While the individual mission statements of Baptist universities in Texas vary to some extent, each of the eight major denominational institutions of higher education in the state hold tightly to their heritage. As William M. Pinson, Jr. noted in the forward to a sesquicentennial history of Texas Baptist education, these institutions offer a unique type of educational opportunity that is academically excellent, unapologetically Christian, and distinctively Baptist. They strive for excellence in education without sacrificing a commitment to Jesus Christ as Savior and Lord. They strive to blend faith and reason. Open to persons of all religions or none, these schools
68 68 present a Baptist witness while holding to religious freedom and soul competency. (Pinson, 1996, p. x) The Bible, which is the foundational text for individual Christians and Christian institutions, contains over 800 scriptures that relate to personal finance in some form (Ramsey, 2001). Students enrolled in Baptist universities are exposed to the Bible throughout their educational experience, in venues such as the classroom, chapel, and beyond. For those who heed its instruction, the Bible helps guide the Christian's principled moral reasoning in a host of everyday matters, including relationships, marriage, disagreements, and money management. Each of the Baptist institutions involved in the present study have a unique history, but each was founded as a place where students could learn, develop, and grow in a learning environment based upon biblical teachings and Christian principles. A brief history of each participating institution is provided in the paragraphs that follow.
Baylor University In 1844, members of the Texas Baptist Education Society petitioned the Congress of the Republic of Texas to charter a Baptist college, and on February 1, 1845, Texas President Anson Jones signed legislation establishing Baylor University as the first Baptist college or university in the Republic, and today holds the distinction of being the oldest institution of higher learning in Texas and the largest Baptist university in the world (Dawson & Storey, 1996; Baylor, 2003). Originally located in Independence, Texas near Houston and Galveston, the institution welcomed its first 24 students--men and women--on May 18, 1846. Named after Judge Robert Emmett Bledsoe Baylor, one of three men who played prominent roles in petitioning for the institution, Baylor University was relocated its present site through a merger. In 1861, another Baptist
69 69 institution of higher education--Waco University--opened its doors in Waco, Texas, and existed as a distinct college for 25 years until, in October 1885, Baylor University and Waco University were consolidated under the name, Baylor University (Dawson & Storey, 1996). The founders of Baylor wanted to "create literally in the wilderness a university equivalent in stature to that of the better institutions of the eastern United States" (Dawson & Storey, 1996, p. 11). Today, "the mission of Baylor University is to educate men and women for worldwide leadership and service by integrating academic excellence and Christian commitment within a caring community" (Baylor, 2003, ¶ 1). With a fall 2005 undergraduate enrollment of 11,825 students, Baylor's enrollment is predominantly full-time (97%), almost entirely traditionally-aged (97.5%), and, like many colleges and universities today, somewhat gender imbalanced, with 58.5% female students and 41.5% male students (Baylor, 2005).
East Texas Baptist University Founded as a two-year college in 1912 as the College of Marshall, so named because of its location in the east Texas town of Marshall, the school grew in size and regional stature and became East Texas Baptist College in 1944. Higher education began in this rural Texas town much earlier than 1912, with the founding of Marshall University in 1842 and its sister school for women, the Masonic Female Institute, in 1843. The Baptist influence over each of these institutions was strong, and even the 1944 name change required the approval of the Baptist General Convention of Texas, the coordinating board which approved the change and also elevated East Texas Baptist College to a four-year institution. In 1984, a charter revision changed the name of the institution to East Texas Baptist University (ETBU), the name it bears to this day (Dawson & Storey, 1996).
70 70 The mission of ETBU includes the following statements: Our purpose is the development of intellectual inquiry, social consciousness, wellness, skills for a contemporary society, global awareness, and Christian character, for we believe that these endeavors prepare students to accept the obligations and opportunities to serve humanity and the Kingdom of God. . . . We are committed to Christian stewardship and to providing and maintaining an environment conducive to learning, leadership development, and academic excellence. We affirm that the liberal arts form the surest foundation for education and that the Christian faith provides the surest foundation for life. (East Texas Baptist University, 2006b, ¶ 1) With a fall 2005 undergraduate enrollment of 1,326 students, ETBU is evenly balanced between female and male students, and is primarily comprised of traditionally-aged (88%), full-time enrolled (89%) students (East Texas Baptist University, 2006a).
Hardin-Simmons University Founded as Abilene Baptist College in 1891 by the Sweetwater Baptist Association, the first cornerstone was laid on July 4, 1891, with funding for the first building made possible by a $5,000 gift from James B. Simmons, a Baptist minister in New York City. To acknowledge his generous contribution, the institution's name was changed to Simmons College. In 1925, the institution became Simmons University when it established a Master of Arts degree. When, in 1934, Mr. and Mrs. John G. Hardin of Burkburnett, Texas generously gave $900,000 to the school, the name was changed to its present form, Hardin-Simmons University (Dawson & Storey, 1996).
71 71 While its focus is to provide an "academically challenging education based upon a liberal arts foundation," Hardin-Simmons University (HSU) also offers specialized graduate and professional degree programs (Hardin-Simmons University, n.d., ¶ 1). According to its statement of purpose, HSU "affirms the relevance and importance of the Christian faith for life in the contemporary world by maintaining a clear identification with the loyalty to the Christian faith and functioning within the context of historical Baptist values and principles" (Hardin-Simmons University, n.d., ¶ 3). The faculty and staff of HSU are committed to developing the mind and nurturing the spiritual life of their students. In the fall 2005 semester, undergraduate enrollees numbered 1,991, with 55% being female, 89% enrolled full-time (Hardin-Simmons University, 2006), and 91% classified as traditional college students (Forrest McMillan, personal communication, June 14, 2006).
Houston Baptist University A relatively young institution compared to its sister schools, Houston Baptist College was founded in 1960 through the initiative of the Union Baptist Association of Houston and encouragement from the Education Commission of the Baptist General Convention of Texas (BGCT). Although the charter was signed in November 1960, groundbreaking for the first building did not commence until May 1962. The first classes were offered in September 1963 to a freshman class comprised of 193 students. Following a self-study conducted in 1973 for the Southern Association of Colleges and Schools, the institution's name was changed to Houston Baptist University (HBU), and by 1977 HBU began offering graduate studies in professional and specialized programs such as business and nursing (Dawson & Storey, 1996).
72 72 The vision of HBU is "to be recognized as one of metropolitan America's premier academic Christian institutions," and as a Christian, liberal arts university, its mission is to prepare students "for meaningful lives and work, and for service to God and the peoples of the world" (Houston Baptist University, 2006, ¶ 2). Among the purposes of HBU is the commitment to foster "spiritual maturity, strength of character, and moral virtue as the foundation for successful living," as well as the development of "professional behaviors and personal characteristics for life-long learning and service to God and to the community" (Houston Baptist University, 2006, ¶ 4). Demographically, HBU is somewhat distinct from its Baptist peer institutions in Texas. With a fall 2005 enrollment of 1,934 undergraduate students, a full 67% of those enrollees were female, 85% were full-time enrolled, and 80% were traditionally-aged (Houston Baptist University, 2005). The location of HBU in a large, urban environment contributes to a population of many commuter students, as well as adult learners pursuing degrees part-time while they work in full-time jobs. Nevertheless, HBU remains predominantly an institution of traditionally-aged, full-time students.
Howard Payne University Howard Payne College was founded in 1889 by Dr. John David Robnett, who served as pastor of First Baptist Church in Brownwood, Texas, the church that sits adjacent to Howard Payne today. Robnett's dream was to establish a college to train ministers and missionaries, but he had difficulty raising support, until he found it in the nearby Pecan Valley Baptist Association, a group of men who began organizing the Pecan Valley Baptist College in June 1889. Securing the necessary funding to establish the college proved challenging, so Robnett called upon his brother-in-law, Edward Howard Payne, who lived in Fulton, Missouri, and Payne
73 73 generously gave a sizeable donation to support the college. To recognize his generosity, Robnett proposed the name be changed to Howard Payne College. The first session of classes began on September 16, 1890 with more than 200 students. Howard Payne College earned full membership in the Southern Association of Schools in 1949, and in 1974 underwent a name change to Howard Payne University (HPU). According to its statement of mission and purpose, "Howard Payne University remains dedicated to honoring Christ and serving His Church by providing an educational experience that integrates faith, learning, and living" (Howard Payne University, n.d., ¶ 1). Furthermore, "students, faculty, staff, and administration work together under the shared values of academic excellence, service to others, and Christian integrity" (Howard Payne University, n.d., ¶ 1). Proposed by President Lanny Hall and adopted by HPU's board of trustees in May 2004, the Howard Payne Promise (Howard Payne University, 2004) provides assurances to students and their parents regarding guaranteed tuition, quality educational experiences, a personal career track, and a personal success plan. Within the text describing the personal career plan, HPU promises to provide students with "a variety of personal development and mentoring programs, time management seminars and personal finance sessions [italics added]," indicating that among the educational emphases identified in the Howard Payne Promise are seminars or workshops to support student success in the area personal finance (Howard Payne University, 2004, ¶ 3). In the fall 2005 semester, HPU enrolled 1,179 students, 52.5% of whom were female, pointing to a fairly evenly distributed student population across gender lines. With respect to enrollment status, 86% of students were full-time enrolled and 81% were traditionally-aged students (Nathan Brown, personal communication, May 19, 2006).
74 74 University of Mary Hardin-Baylor The University of Mary-Hardin Baylor originated as the female extension of Baylor University, which in its earliest years was located in Independence, Texas. Though Baylor students were initially taught together in the classrooms, the idea of coeducational learning grew increasingly unpopular, and by 1854 Baylor University was split into two distinct units--the Male Department and Female Department--which were completely separated administratively, educationally, and physically. In 1866, the leadership of the Female Department petitioned the state legislature to become the Baylor Female College, which would completely distinguish it from Baylor University. The charter was granted, and for the next 20 years Baylor University and Baylor Female College operated in Independence, Texas. In 1885, the Baptist General Convention of Texas voted to move Baylor Female College to the central Texas town of Belton, which offered $31,000 cash and land as inducements, and in 1886 the institution began operating in its new home, where it remains to the present. In 1924, the institution was renamed Baylor College for Women, and in 1926 the college received initial membership into the Southern Association of Colleges and Schools. The financial crisis of the 1930s was largely offset at Baylor College for Women, as it was for several Baptist colleges in Texas, by the generosity of Mr. and Mrs. John G. Hardin, who had achieved great wealth through ranching and oil business in the state. To honor its benefactors, the college in 1934 changed its name to Mary HardinBaylor College. With the establishment of Camp (later Fort) Hood by the U.S. Army in 1942, the college began offering classes to soldiers at the installation, and though the issue was debated at least as early as the 1940s, Mary Hardin-Baylor College did not become a coeducational institution until 1971, a decision that opponents had believed would "destroy the uniqueness of the college" that had for so long served young women (Smith, 1996). In 1978, as the institution
75 75 began offering graduate programs, the name of the college was changed to the University of Mary-Hardin Baylor (UMHB), and by the mid-1990s enrollment had reached 2,200 and the institution was offering nine undergraduate and four master's-level graduate degrees (Smith, 1996). According to its mission statement, UMHB is "a Christ-centered institution of higher learning" in which "Christian principles and beliefs form the basis of the educational environment of the university" (University of Mary Hardin-Baylor, n.d., ¶ 1). The total fall 2005 undergraduate enrollment was 2,725 students, 64% of whom were female. With respect to enrollment status, 85% of students were full-time enrolled and 77% were traditionally-aged (Amy Bawcom, personal communication, May 22, 2006). The preceding paragraphs have provided historical information for each of the six participating Baptist institutions as well as a snapshot of several demographic variables that describe the undergraduate student body of each university. Tables 29-34 in Appendix G compare several demographic characteristics (viz., gender, attendance status, and age category) of students who participated in the present study with overall student body demographic data for each institution.
Christian Higher Education and a Biblical Approach to Personal Finance Each of the six Baptist universities highlighted in the preceding section is characterized by the common denominator of Christian values. Mission statements of these institutions include many terms preceded by the word Christian, including beliefs, character, commitment, faith, principles, and stewardship, while other phrases like "service to God" and "honoring Christ" also
76 76 appear in these documents. The foundational text for the Christian faith is the Bible, and adherents to the faith hold it in highest regard, believing the Bible to be inspired by the triune God and written so that men and women may know Him and thereby have a relationship with Him. Just like the individual Christians who comprise them, Christian-based institutions such as Baptist universities in Texas hold the Bible in highest regard, and seek to implement programs and services that reflect the decrees and principles contained therein. Guthrie (1997) proposed a series of admonitory statements regarding student learning at the Christian college, and in so doing inherently underscored the centrality of using biblical guidance to design curricula, programs, and services: Given the inherently religious nature of student learning, Christian colleges should strive to provide student learning Christianly with respect both to content issues and to organizational structures. This is simply to underscore the idea that neither the content of student learning nor the systems that undergird it are neutral. For example, for a Christian college simply to install the formal curriculum structure of a state university as its own is inappropriate. Much care must be taken regarding what, how, and why various subjects comprise the in-class curriculum of a Christian institution. Similarly, organizational issues such as codes of conduct, faculty reward structures, student discipline procedures, graduation requirements, and the like should be intentional, thoughtful byproducts of the Christian beliefs that guide a Christian college. (pp. 66-67) Clearly, the historical and modern day characteristics of institutions of higher education matter a great deal, and for institutions that have maintained and continue to emphasize their Christian heritage, the application of biblical principles will be evident, or at least it should be.
77 77 As previously discussed, the Bible gives guidance to help Christians face life's issues, including everyday matters such as relationships, marriage, disagreements, and even money management. Indeed, as Ramsey (2001) has pointed out, there are over 800 scriptures that relate to personal finance in some form. In fact, according to Ramsey, during His earthly ministry Jesus Christ spoke more about money and possessions than He did about love. Both the Old and New Testaments of the Bible contain a host of references to personal finance issues, a complete review of which is beyond the scope of this paper. A few highlights, however, will help illustrate how the Bible speaks loud and clear about personal finance. Regarding saving rather than squandering, Proverbs 21: 20 suggests that "in the house of the wise are stores of choice food and oil, but a foolish man devours all he has" (NIV Study Bible, 1995, p. 968). Jesus taught of the need to budget so people can anticipate expenses and be adequately prepared to meet them, as recorded in Luke 14: 28-30: Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying, "This fellow began to build and was not able to finish." (NIV Study Bible, 1995, p. 1566) Two adjacent scriptures in the Bible refer to the importance of a) teaching children to be spiritually successful people and b) the condition of those who are in debt. It is interesting that these scriptures are connected, perhaps suggesting the importance of teaching young people about personal finance and debt avoidance. These verses are found in Proverbs 22: 6-7, which reads: "Train a child in the way he should go, and when he is old he will not turn from it. The rich rule over the poor and the borrower is servant to the lender" (NIV Study Bible, 1995, p. 969).
78 78 Regarding investing for the future, Ecclesiastes 11: 1-2 (NIV Study Bible, 1995) recommends taking some risk, which is a key component of investing ("Cast your bread upon the waters, for after many days you will find it again.") and diversification ("Give portions to seven, yes to eight, for you do not know what disaster may come upon the land."), which is also a central idea in sound investing (p. 995). Jesus also spoke of investing when he shared the parable of the talents, which is recorded in Matthew 25: 14-30 and Luke 19: 12-27. Typical of Jesus' parables, there is a deeper spiritual message communicated within a more easily comprehended surface message. In this parable, the surface message deals with three servants who each were given a certain sum of money for which to be responsible while their master was away. Two of them were productive and used the master's money to earn even more during his absence, while the third servant buried the money in the ground and was thereby unproductive with it. The latter servant was rebuked for his actions, and the master exclaimed, "You should have at least put my money on deposit with the bankers, so that when I returned I would have received it back with interest" (NIV Study Bible, p. 1477). The foregoing Bible references represent just a few examples of how the scriptures provide guidance to the Christian with respect to personal finance matters. Scholars have carefully analyzed and written about scriptures such as the preceding, as well as many other writings throughout the Old and New Testaments, to provide guidance and insights regarding biblical approaches to personal finance issues. The frontispiece of Moore's (1953) text on biblical money management reads as follows: "The doctrine of Christian stewardship reveals that all we have belongs to God, we are his partners or trustees in handling the possessions committed to us, and we must therefore use all of life and property to do his will" (p. xviii). The term steward is synonymous with manager, and dates back to the feudal system of
79 79 medieval Europe, in which a lord ruled a certain portion of land (i.e., a realm), and a steward managed the assets, crops, property, etc. The King James Version of the Bible was translated during this era, and therefore included the term steward where relevant, as people in that era could readily visualize the term's meaning. The central idea, then, is that Christians are called to be good stewards, or managers, of the resources over which they have been given responsibility. But why should Christians worry about being good stewards of fiscal resources? What's the purpose? Blomberg (1999), in his book Neither Poverty Nor Riches: A Biblical Theology of Material Possessions, helps she light on these questions. According to Blomberg, a necessary sign of a life in the process of being redeemed is that of transformation in the area of stewardship. Ultimately, one's entire life should be dedicated to God, but a particularly telling area of determining one's religious commitment involves one's finances. (p. 244) Throughout the Bible is found the mandate to care for those who are less fortunate (e.g., the widow, the fatherless, the poor, etc.), and the New Testament urges Christians to help spread the Gospel of Jesus Christ (e.g., Matthew 28: 19 in NIV Study Bible, 1995, p. 1487). One way believers can care for the less fortunate and help spread the Gospel is through financial giving. Christian giving, prompted by a love for God and a desire to follow biblical teachings, is one mark of spiritual maturation. Since the Bible represents the primary source of guidance for the Christian and the Christian institution, Baptist colleges in Texas notwithstanding, and since the Bible contains over 800 scriptures that deal with personal finance issues, it would stand to reason that faculty and staff serving at Texas' Baptist universities would be inclined to draw upon this synergy as they design educational programs within their institutions. A perusal of each university's website,
80 80 however, will largely reveal that such educational emphases are absent, and for the sole institution that does espouse personal finance sessions in its cocurriculum, there may be more rhetoric than reality. It is hoped that with heightened awareness of the personal finance education void that exists at most colleges and universities in the United States, and with a renewed zeal for infusing biblical principles into the educational experience, Baptist universities in Texas and elsewhere will take full advantage of their unique educational niche and begin to promote personal finance training as one component of their curriculums and cocurriculums.
Self-Report Data in Research Though there are strengths and weaknesses to utilizing self-report data within higher education (Raphael & Lloyd, 2004), it is widely acknowledged that much research conducted at colleges and universities relies on students' self-reports of their own attitudes, behaviors, and knowledge. Indeed, "the largest, most respected, and most famous national studies use the selfreport format" (Turrentine, 2001, p. 361). By their very nature, questionnaires and surveys are measures of self-reported information. According to Pace (1984), the accuracy of self-reported responses depends on clarity of instrument items, respondents' base of experience or knowledge to respond to the items, the appropriateness of the items and their format, and if the respondents regard themselves as having a valid opinion regarding the subject being queried. Though the present study will rely heavily upon self-report data through the administration of a survey, the fact that large, famous, well-respected national surveys rely on self-report data provides assurance that this methodology can prove fruitful. It should be noted, however, that sometimes survey takers can tend to give socially acceptable answers, or what the respondent thinks the researcher wants to hear. Safeguards to this tendency include the assurance of anonymity of
81 81 respondents and confidentiality of answers, as well as requests in the cover letter and instructions for participants to respond candidly and truthfully.
Surveys of Perception It is quite commonplace in survey research to ask respondents to offer their perception of the topic under study. For example, racial minorities may be asked via questionnaire to rate their perceptions of the race climate on a college campus, which might include questions about how they think the majority group views members of the respondents' own minority group. Another example might include faculty members being asked to evaluate the academic preparedness of incoming students. In either instance, the respondent cannot know for certain how the other party (e.g., majority group members or incoming students) thinks or feels, but the respondent can certainly report their perception. The axiom "what is perceived as real is real in its consequences" certainly applies to this type of survey research (Patton, 1997, p. 222). Some survey research studies have been conducted in which students report a behavior and faculty or staff members report their perceptions of that behavior. In a single-institution inquiry by Heinemann and Dunkelblau (1984), the researchers sought to investigate differences between successful university students (persisters) and students who withdrew, and to examine the accuracy of faculty and staff perceptions of students' experiences. One of the findings suggested that faculty and staff did not consistently perceive students' needs or how they might more effectively be retained if those needs were better met.
82 82 Administering Web-based Surveys Survey research via mail has a much longer history than that conducted via the Internet or e-mail. Much has been written about survey research, however, and most of the principles that apply to paper-based questionnaire construction and administration apply to electronic survey research as well. Still, survey research via electronic media is an emerging area, having only surfaced as an alternative with the advent of e-mail and the Internet. There has been relatively little written on the topic of electronically administered questionnaires or comparisons of their effectiveness to that of mail surveys (Underwood, Kim, & Matier, 2000). Matz (1999) compared the process of administering a Web-based survey versus a traditional pencil-and-paper survey. Her responses were quite interesting, as they seem to rebuff several typical assumptions about Web-based surveys. Matz found no significant differences between the demographic characteristics (e.g., age and gender) of participants taking the electronic survey and those completing a mailed, paper survey. In addition, she did not find significant differences between either the content or the pattern of survey responses for either group. One significant finding, and a rather important one, surrounded the overall response rate: For the paper survey it was 43%, and for the Web survey, 33%. Matz also perceived that the paper instrument accorded more flexibility to respondents, as they could easily make comments about survey items they did not understand or felt were vague. Despite these somewhat negative findings, Matz concluded that Web surveys seemed to be a reasonable alternative to mail surveys, if not equally suspect of some unavoidable deficiencies. Mertler (2002) examined the advantages and limitations of conducting survey research via the Internet, including both Web-based and e-mail platforms. Two highly advantageous aspects of Internet-based survey administration are cost savings and efficiency (both in
83 83 administration and data entry). He found that a relatively high response rate could be achieved within a short time frame. In his study, Mertler did encounter difficulties in obtaining a comprehensive e-mail address list, which called into question the representativeness of his sample. In summarizing his conclusions from this and similar articles he had authored, however, Mertler claimed, "I firmly believe that the advantages of Web surveys outweigh the limitations" (C. A. Mertler, personal communication, March 18, 2005).
Conclusion This chapter began with a broad look at the personal finance characteristics of the United States general citizenry, and then proceeded into a review of studies in which the personal finance attitudes, behaviors, and knowledge of college students has been the research object. From that point, an introduction of a student development theory that intersects with personal finance management issues was presented, followed by a review of an assessment model that examines student inputs, outputs, and educational environments. Next, an overview of the Millennial Generation, the demographic cohort that is now entering college, was provided. Rounding out the survey of literature was a brief overview of Baptist higher education in Texas and an overview of Christian higher education and the approach to personal finance articulated in the Bible, followed by a review of issues related to survey research, namely, self-reported data, surveys of perception, and web-based surveys. Based upon extensive literature searches conducted by the researcher between January 2003 and the completion of this report, it was concluded that the research questions posed in this study had not been asked. Accordingly, it appears that the results of this research project contribute new knowledge at the crossroads of
84 84 personal finance and college students, in particular, those enrolled at Baptist universities in Texas.
85 85 CHAPTER III. METHODOLOGY
Research Questions This study was designed to examine via survey research the current status of personal finance attitudes, behaviors, and knowledge of first-year and senior students at selected Baptist universities in the state of Texas. It was surmised that a willingness on the part of such institutions to initiate a personal finance curriculum within their first-year experience program and beyond could become a hallmark of Christian-based private colleges, and that student affairs personnel at these institutions would have useful suggestions about how this topic could be emphasized within their institution's context. Therefore, in addition to surveying first-year and senior students themselves, student affairs staff at participating institutions were also surveyed in order to identify the educational needs of their students in regard to personal finance and to suggest possible strategies to meet these learning needs within a curricular or cocurricular response. Eight primary research questions were answered in this study. First, what attitudes do first-year and senior college students at selected Baptist universities possess regarding personal finance concepts? Second, what personal finance behaviors do first-year and senior college students at selected Baptist universities exhibit regarding personal finance concepts? Third, what knowledge do first-year and senior college students at selected Baptist universities claim to possess regarding personal finance concepts? Fourth, how do the personal finance attitudes, behaviors, and knowledge of first-year and senior college students at selected Baptist universities compare given the typical variation in age and collegiate experience between the two groups? Fifth, how do perceptions between first-year and senior college students at selected Baptist
86 86 universities differ regarding their university experience influencing their personal finance attitudes, behaviors, and knowledge? Sixth, how do the personal finance attitudes, behaviors, and knowledge of first-year and senior students at selected Baptist universities differ by selected demographic factors? Seventh, what personal finance attitudes, behaviors, and knowledge levels of first-year and senior college students are perceived by student affairs professionals at selected Baptist universities, and how do those perceptions compare with actual student responses? Finally, what strategies can be recommended by student affairs professionals at selected Baptist universities that can align institutional mission with programmatic initiatives, integrate personal finance into the college curriculum and cocurriculum, and encourage application of personal finance theory into student life? These eight questions guided this research project.
Data Sources The data for this study were obtained from two sources: students attending Baptist universities in Texas and student affairs administrators employed by Baptist universities in Texas. Participants from both groups completed online surveys powered by Snap Surveys housed on the Bowling Green State University website at Internet addresses publicized only to those selected for participation in the study.
Participating Institutions Six of the eight Baptist universities in Texas agreed to participate in this study: Baylor University (Waco, TX), East Texas Baptist University (Marshall, TX), Hardin-Simmons University (Abilene, TX), Houston Baptist University, Howard Payne University (Brownwood,
87 87 TX), and the University of Mary Hardin-Baylor (Belton, TX). The surveys were only administered among selected students and administrators at these six institutions.
Student Data Data from student participants was gathered through the researcher-developed Personal Finance Survey: Student Version. The researcher was able to obtain spreadsheets of student data (i.e., name, address, e-mail address, academic classification) from each of the participating institutions. The spreadsheets represented each campus' first-year and senior student populations. Sampled students from the participating institutions received a postcard inviting them to take the online survey. Three follow-up e-mails were sent with a similar invitation. In both instances, participation was emphasized as voluntary but resulting in entry for prize drawings. The Snap Surveys software allowed the researcher to ensure anonymity of respondents' data while still allowing for tracking of participation so that follow-up solicitations could be sent accordingly.
Students The students targeted for participation and examination in this study were first-year and senior collegians at Baptist universities in Texas. Sampling frames were obtained from each participating institution in the form of spreadsheets. There were two sampling frames per campus: one with the first-year student population and one with the senior population. Each spreadsheet was arranged in alphabetical order by last name and sampling was conducted according to the guidelines of systematic random sampling (i.e., every kth case was sampled for solicitation).
88 88 The focus of this study was not to report data at the institution level. That is, no comparisons across institutions have been made. Rather, the aim was to obtain a hearty sample that was evenly distributed across the six participating institutions, which provided a hedge against bias caused by oversampling students at one particular institution who may have unique demographic features or belong to a larger student body. That said, the data were collected in a manner that allowed for institutional identification. Doing so was important as it allowed the researcher to provide participating institutions with aggregate data for students enrolled at their particular university. It is widely acknowledged among survey research experts that too small a sample can result in nonsignificant findings and an inability to generalize, while too large a sample size can yield statistically significant findings that may not be meaningful or generalizable. According to Charles and Mertler (2002), the minimum sample size depends upon the type of research inquiry being conducted. For descriptive research endeavors such as the present study, they suggest a sample that represents approximately 10-20% of the population; however, Gay and Airasian (2000) contended that once population sizes reach a certain magnitude (e.g., N = 5,000), population sizes become irrelevant and a sample size of roughly 400 participants would provide adequate representation. While the figures just listed inform sampling procedures for survey distribution, what about response rate? Many researchers fret, with good reason, about survey return rates and at what level they should be concerned about them. Krathwohl (1993) accurately and succinctly addressed these concerns. He pointed out that the key factor is "the representativeness of the people reached with respect to the topic of concern in comparison to the population to which we wish to generalize. If those reached are truly representative, a low response rate is acceptable" (p.
89 89 386). Survey response rates can vary and depend upon a number of factors (e.g., incentive for completion, length of survey, or population sampled). Though a 100% response rate would be desirous, a more realistic projection might be 25%. In the present student, the researcher drew a sample of 2,100 students evenly distributed across the participating institutions (350 students per institution [175 first-year students and 175 seniors]). With 408 useable sets of student data received, a response rate of 19% was realized.
Survey Instrument The Personal Finance Survey: Student Version was developed by the researcher in July 2003 in preparation for a study conducted at Bowling Green State University (BGSU) during the fall 2003 semester (Marsh, 2004). Initial survey items were developed based upon an extensive literature review of other studies (viz., Kidwell & Turrisi, 2000; Roberts & Jones, 2001) conducted at the intersection of college or high school students and personal finance, as well as the researcher's own knowledge in the area of personal finance, which has been particularly influenced by the consumer finance education materials produced by Ramsey (2001, 2003). The instrument then underwent several iterations as it was reviewed by two experts in survey research, one from BGSU and another from Kansas State University. For the personal finance content itself, a professor of finance at BGSU who regularly teaches a course in personal finance reviewed the questionnaire and found no areas of concern. Certain survey items, particularly those dealing with attitudes and behaviors, were written to ascertain students' views on issues such as debt and cash flow planning. As literature surveyed in Chapter II suggested, the Bible provides scriptural guidance in the area of Christian stewardship of fiscal resources. For instance, Proverbs 22:7 describes debt as a form of servitude:
90 90 "the borrower is servant to the lender" (NIV Study Bible, 1995, p. 969). In Luke 14: 28, Jesus Christ spoke through a parable about the need to consider and plan for expenditures: "Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it" (NIV Study Bible, 1995, p. 1566)? From a Christian worldview, in which it is believed that all fiscal resources and material possessions are gifts from God, applying biblical teachings to household finances represents wisdom and is a mark of spiritual maturation. Credit card debt and similar forms of indebtedness can typically be avoided by careful planning and a personal decision to avoid such servitude. Thus, it was important to craft survey items that would determine students' attitudes and behaviors about such issues, particularly for those who attend Baptist universities in which Christian values are espoused. The only changes made to the original version of the student survey for the proposed study were in the demographics section, in which some items were removed, added, or slightly modified for clarity. An additional adjustment was the medium through which it was administered, online rather than in paper form. A final change to the survey was the insertion of an additional column for students to respond to the first 38 items: students were asked not only to respond to each item, but also to rate the extent to which their university experience contributed to their attitudes, behaviors, or knowledge as indicated by each survey item. As Chapter IV will reveal, various survey items within each of the personal finance scales--Attitudes, Behaviors, and Knowledge--were grouped into categories for presentation purposes. To facilitate a more meaningful and less cumbersome analysis, the 16 Attitude scale items were grouped into five categories: Orientation toward Personal Finance, Debt Philosophy, Approach to Credit Cards, Financial Security, and Valuing Personal Finance. Similarly, the 11 Behavior scale survey items were grouped into four categories: Organizing, Spending, Saving,
91 91 and Squandering. Finally, the 11 Knowledge items were placed in one of four categories: Financial Foundations, Credit Issues, Important Factors, and Investments. It should be noted that the categories were not assigned based upon statistical analyses, but rather by the nature of the items themselves. For instance, in the Attitudes portion of the survey, items that dealt with credit cards were assigned to the category, Approach to Credit Cards. Similarly, items in the Behavior area that focused on saving money were assigned to the category, Saving. A similar pattern was followed for all survey items--they were grouped in a category with other items dealing with related personal finance subjects. Each participating institution produced the requested sampling frames (i.e., spreadsheets containing names, local addresses, e-mail addresses, and academic classification), and once sampling occurred, students were contacted in two ways: via e-mail and postcard. A postcard was first sent to the local/school address of each sampled student. The postcard, mailed on November 17, 2005, introduced the study, requested students' participation, directed them to the website for completing the survey, and announced the prize drawing. On November 28, 2005, a mass e-mail was sent soliciting participation and including similar information to the postcard. Students had 12 days from that date to complete the survey. In the interim, two follow-up e-mails were sent to nonrespondents on December 2, 2005 and December 7, 2005. By December 9, 2005, an acceptable response rate was achieved and data collection ceased. The decision to send a postcard seemed wise in that it likely drove up the survey response rate but unwise in that it compromised a beneficial aspect of the Snap Surveys software. The survey program assigns a unique Internet address (URL) to each participant based on his or her e-mail address. When a participant receives an e-mail about the survey generated by the software program, and subsequently completes the survey, the database takes note of the respondent's
92 92 identity so that no further solicitations are sent to the respondent. The postcard invitation did not contain the unique URL but rather the generic address, which compromised the precision of tracking responses, which is a beneficial aspect of using a program like Snap Surveys. Successful steps were taken to overcome this shortcoming, however, and the additional invitation to participate seemed to bolster the overall response rate. Unfortunately, the inability to track those who completed the survey using the generic URL resulted in a few comments such as, "stop emailing me, I've already completed the survey!" Fortunately, these were isolated incidents and positive feedback about the process and the online survey far outweighed negative feedback.
Student Affairs Administrator Data The other group through whom data were generated for this study were student affairs (or "student life") professionals at each of the participating Baptist universities. Data were collected in both quantitative and qualitative forms via an Internet-based survey instrument that shared many similarities to the student version.
Administrators The administrative staff members who participated in this study represented a variety of functional areas or titles, a list of which can be found in Chapter IV: Analysis of Findings. Since student affairs administrators across six institutions were relatively few in number, the entire population was solicited for participation at each campus. While it represented a sample of convenience, maximizing the number of respondents from this relatively small group of potential participants was important to gain as broad a perspective as possible on the matter under examination, obtain a hearty sample for the quantitative data, and achieve a rich collection of
93 93 qualitative comments, reactions, and suggestions. With the qualitative data being collected via open-ended survey response items, it was beneficial to achieve a generous response rate (100/169, 59%) which allowed categorization and thematization of the qualitative results.
Survey Instrument The Personal Finance Survey: Administrator Version was administered electronically via the Internet. Sharing many similarities with the student version, the administrator survey asked respondents to rate their perceptions of first-year and senior students' personal finance attitudes, behaviors, and knowledge. In addition, a series of open-ended items was included to address the eighth research question: What strategies can be recommended by student affairs professionals at selected Baptist universities that can align institutional mission with programmatic initiatives, integrate personal finance into the college curriculum and cocurriculum, and encourage application of personal finance theory into student life? Student affairs professionals are typically the campus experts on knowing the students who attend their institution, and as such should have been equipped to answer both the quantitatively-based perception items and the qualitativelybased recommendation questions. On July 28, 2005, the student affairs administrator survey, in paper form, was pilot tested with 23 student affairs staff representing five Baptist universities in Texas at the Baptist Association of Student Affairs roundtable conference in Belton, Texas. Based on the useful feedback received, the administrator survey underwent several minor modifications that enhanced clarity and ability for respondents to rate student perceptions. The survey was then converted to electronic form an administered via the Internet. Prospective participants were solicited on the same dates as the students.
94 94 The student affairs administrators were contacted regarding the survey via two media. First, a personally-addressed letter from the researcher was sent that introduced the study, directed them to the online survey, etc. Shortly thereafter the first of three e-mail messages was sent that accomplished the same purpose. The final two e-mail reminders were sent in conjunction with the student e-mail follow-ups, and data collection ceased on December 9, 2005.
Data Storage Housed on the BGSU web, the two versions of the survey were created and powered by Snap Surveys software. (Not being able to access the software program and database from his employing university and research site, the researcher was aided tremendously in the online survey design and administration process by Dr. William Knight, Assistant Vice President for Planning and Accountability, at BGSU). A user-friendly online survey design and management system, Snap Surveys software worked exceptionally well as the mode for gathering data for the study. Once participants completed the survey, their responses were stored in a data file that was easily downloaded into the popular Statistical Package for the Social Sciences (SPSS) software for analysis. The qualitative data was also downloaded into SPSS and was already in typed form, rendering transcription unnecessary.
Analytical Approaches A variety of approaches were used to analyze the data collected. Charles and Mertler (2002) cautioned against going "overboard" in applying statistical procedures (p. 196). They recommended the following: Know "what questions you wish to answer or which hypotheses you intend to test. Then select the statistics that are appropriate for describing your data and for
95 95 performing the treatments you require" (p. 196). In this study, there were eight research questions with data being provided by two sources: students and student affairs administrators. Student data were analyzed to address the first six research questions and administrator data for the final two questions. All but one of the research questions were addressed through analyzing quantitative data. Primarily, then, quantitative analysis techniques were applied. A portion of the seventh research question and the entire final research question, however, relied upon administrative respondents to provide written feedback about problems and challenges students face in their personal finances, and also suggestions about programmatic initiatives that would integrate personal finance into the college curriculum and cocurriculum and encourage application of personal finance theory into student life. Basic qualitative data analysis techniques were used for this portion of the data.
Overview of Data For each participating institution, quantitative student data and quantitative administrator data were generated through the Personal Finance Survey: Student Version and the Personal Finance Survey: Administrator Version, respectively, and were nominal or interval in nature. According to Charles and Mertler (2002), nominal data can be classified into two or more verbal (name) categories, which means the data are different but the difference is not quantifiable. An example of nominal data is gender (i.e., male or female). Most demographic data from the survey will be nominally scaled. Interval data is defined as successive numbers on a scale expressed in equal numerical units, but the scale's zero point is arbitrarily chosen (Mertler & Charles, 2000; Krathwohl, 1993). A common example of a survey scale that yields interval data is the Likert
96 96 scale, where scores may be displayed as follows: 1 = strongly disagree, 2 = disagree, 3 = agree, and 4 = strongly agree, and equal units between each score can be assumed. According to Krathwohl, when dealing with interval data, one can find all three measures of central tendency in the data: mean, median, and mode. The ability to derive mean scores was particularly important in the present study in which descriptive statistics, t test statistics, and one-way analysis of variance (ANOVA) results are reported. Some might argue that data derived from Likert or Likert-type scales should be classified as ordinal in nature, which means that numerals are assigned to ordered data to indicate size relative to some characteristic (e.g., size, ability), but no assumption is made that the differences between the numerals are equal (Krathwohl, 1993). The researcher has received assurance from an educational research expert that interpreting data derived from Likert and Likert-type scales as interval rather than ordinal is quite commonplace in survey research (C. A. Mertler, personal communication, July 31, 2003). Treating data as interval allows for calculation of means, which opens the door to additional statistical analyses (e.g., t tests, ANOVA, etc.); however, this approach is only appropriate for composite scores representing groups of scaled questions, not for individual items themselves. Both versions of the survey administered in the present study contained three major sections regarding personal finance: Attitudes, Behaviors, and Knowledge. For each version, respondents answered Attitude items utilizing a Likert scale, and values were assigned to response options as follows: 1 = strongly disagree, 2 = disagree, 3 = agree, 4 = strongly agree, and 5 = not applicable. Respondents answered Behavior items along a Likert-type scale, and the following numerical values were assigned to the response options: 1 = never, 2 = rarely, 3 = sometimes, 4 = usually, 5 = always, and 6 = not applicable. Participants answered the
97 97 Knowledge items along a 5-point Likert-type scale which was assigned the following values: 1 = poor, 2 = fair, 3 = good, 4 = very good, and 5 = excellent. Prior to conducting statistical analyses in which "not applicable" responses should be factored out, those scores were removed from the dataset so as not to skew the mean scores being computed or the inferences made therefrom. One distinct feature of the Personal Finance Survey: Student Version was a second set of response options per item in the Attitudes, Behaviors, and Knowledge sections of the instrument. In addition to rating their personal finance attitudes, behaviors, and knowledge levels, students were also requested to rate the extent to which their university experience contributed to their attitudes, behaviors, or knowledge as indicated by each survey item. Student participants rated the influence of their university experience along the following Likert-type scale with values assigned as follows: 1 = not at all, 2 = somewhat, 3 = quite a bit, and 4 = a great deal. This second response set allowed the researcher to compare first-year students and seniors with respect to the university experience's influence on their personal finance characteristics. In survey research, questionnaire items are sometimes worded in the negative to keep respondents alert to the questions so they must concentrate and not fall into a mindless response pattern. While Spector (1992) cautioned against using negatives to reverse the wording of an item, he did not discount their use entirely, suggesting instead that they be phrased with care. Before analyzing data gathered through a negatively worded item, the researcher should typically considered reverse scoring responses. A few items in each version of the Personal Finance Survey were either worded in the negative or the nature of the item and the attitude or behavior being queried rendered reverse scoring essential. These items were reverse scored based on teachings from two primary sources: conventional personal finance practice or scriptural wisdom from the Bible. In the Attitudes section of the survey, five questions were reverse scored prior to
98 98 analysis: Having a credit card is a basis for a person to feel financially secure; Being in financial debt to another is OK; I will always carry some sort of financial debt during my lifetime; I will not be financially secure in the future; and, Personal finances do not affect relationships with others. The first four questions were reverse scored so that higher numerical responses were associated with better answers (i.e., responses which reflect sounder personal finance attitudes). For example, since according to Proverbs 22:7 (NIV Study Bible, 1995, p. 969) debt is generally something to be avoided if possible, students who strongly disagreed that they would always carry debt during their lifetime would have registered a numerical score of one, but their attitudes are good, so reverse scoring the mark of one to a four is appropriate. Four items in the Behavior section were reverse scored. Each question began with the phrase, to what extent do you . . . Pay less than the full balance of your monthly credit card bill(s)?; Write checks knowing full well that your account's funds are insufficient?; Buy things you need even when you can't really afford them?; and Buy things (e.g., clothes, music) to make yourself feel better? None of these items were negatively worded, but each of them warranted reverse scoring because a higher score represented a higher frequency (e.g., usually, always) and always paying less than the full balance of one's credit card bill, for example, represents unwise behavior compared to never engaging in this practice.
Demographic Characteristics Each version of the survey was designed to gather various demographic characteristics from respondents, the results of which are provided in Chapter IV: Results. That particular section of the dissertation answers the question, who are the participants in this study and what are their characteristics? Student research participants were requested to provide the following
99 99 demographic information: gender, age, academic classification, attendance status, institution attending, major, employment status, interest in matters of faith, religious/denominational affiliation, use of student loans and knowledge of those loans, and personal experience with formal personal finance education. Administrator research participants were requested to provide demographic information as well: functional area in student affairs and years worked in student affairs. Descriptive statistics were used to portray respondents' demographic characteristics. The following information is provided for all three groups (i.e., first-year students, seniors, and administrators): number of respondents (n), number sampled (N), response rate (n/N = percentage), and number of respondents representing each possible demographic category expressed as both a number and a percentage of the overall respondent group (e.g., 100 of 200 [50%] first-year student respondents were female). The results of two questions on the administrator survey's demographics section are also reported in the demographics section of this report: administrators' opinions of how important it is to teach college students about personal finance concepts and applications, and how well each respondent thinks his/her own university is addressing the issue of personal finance education for its students.
Research Question One: What attitudes do first-year and senior college students at selected Baptist universities possess regarding personal finance concepts? The first research question was addressed through quantitative data analysis. The data were derived from the student survey, questions 1-16. Descriptive statistics (i.e., frequencies [n] and percentages [%]) were calculated to describe results from each of the 16 survey items about first-year students' and seniors' personal finance attitudes.
100 100
Research Question Two: What personal finance behaviors do first-year and senior college students at selected Baptist universities exhibit regarding personal finance concepts? The second research question was also addressed through quantitative data analysis. The data were derived from the student survey, questions 17-27. Descriptive statistics (i.e., frequencies [n] and percentages [%]) were calculated to describe results from each of the 11 survey items about first-year and senior students' personal finance behaviors.
Research Question Three: What knowledge do first-year and senior college students at selected Baptist universities claim to possess regarding personal finance concepts? The third research question was also addressed through quantitative data analysis. The data were derived from the student survey, questions 28-38. Descriptive statistics (i.e., frequencies [n] percentages [%]) were calculated to describe results from each of the 11 survey items about first-year and senior students' personal finance knowledge.
Research Question Four: How do the personal finance attitudes, behaviors, and knowledge of first-year and senior college students at selected Baptist universities compare given the typical variation in age and collegiate experience between the two groups? Having overviewed individually first-year and senior students' personal finance attitude, behavior, and knowledge characteristics, which allowed for casual observations and comparisons to be made, this research question necessitated statistical comparisons between the two groups. The researcher compared first-year students' and seniors' mean scaled scores for the attitude, behavior, and knowledge items. One-way ANOVA tests were applied to the data for the
101 101 composite score comparisons. Resultant statistics included the F ratio, which represents the mean difference between the two scores, the degrees of freedom and error, levels of significance, and effect sizes. These statistics are presented in both table and narrative form. The decision to utilize one-way ANOVA rather than independent samples t tests lies in the sample size. According to Charles and Mertler (2002), an independent samples t test analyzes the difference between the mean of two groups to determine whether the difference is significant, but is appropriate only for small samples (pp. 112, 375). For large samples, such as the ones to be drawn in the proposed study, they suggest using the ANOVA technique. According to Mertler and Vannatta (2002), a one-way ANOVA helps researchers study the effect that one factor (i.e., independent variable) has on one dependent variable. Related to research question four of the present study, the independent variable is academic classification (first-year student or senior) and the dependent variable is personal finance attitudes (or behaviors or knowledge).
Research Question Five: How do perceptions between first-year and senior college students at selected Baptist universities differ regarding their university experience influencing their personal finance attitudes, behaviors, and knowledge? Throughout the student survey, participants were asked to not only rate their attitudes, behaviors, and knowledge regarding personal finance topics, but they were also requested to report the extent to which their collegiate experience shaped their opinions, practices, and aptitude in these areas for each survey item. Hence, the data were derived from questions 1-38 of the student survey. Descriptive statistics (i.e., frequencies [n] and percentages [%]) were computed and are utilized to display results from each of these 38 survey items. In addition, composite scores for each of the three survey sections (attitudes, behaviors, and knowledge)
102 102 were compared between first-year and senior students for significant differences in their attribution of college as having influenced their personal finance characteristics.
Research Question Six: How do the personal finance attitudes, behaviors, and knowledge of first-year and senior students at selected Baptist universities differ by selected demographic factors? In this portion of the analysis, the researcher returned to exploring demographic characteristics, but combined first-year and senior students' attitude, behavior, and knowledge scores to examine other possible demographic differences. Specifically, t tests and ANOVAs were employed to compare selected demographic characteristics (e.g., academic major, age, attendance status, gender, employment status, and religiosity) with attitude, behavior, and knowledge scores. For instance, do differences exist between male and female students in the area of personal finance attitudes? Or, do differences exist between students who attend college part-time versus those who attend full-time with respect to their personal finance behaviors? The resultant test statistics and other appropriate statistical output for each analysis is provided graphically (e.g., table of means, standard deviations, etc.) and discussed in text.
Research Question Seven: What personal finance attitudes, behaviors, and knowledge levels of first-year and senior college students are perceived by student affairs professionals at selected Baptist universities, and how do those perceptions compare with actual student responses? In addressing research question six, quantitative data derived from the administrator survey was analyzed and compared with results from the student survey. In the administrator version of the survey--a modified version of the student instrument--student affairs
103 103 administrators were asked to rate their perceptions of first-year and senior students' (who were enrolled at the administrators' employing campus) personal finance attitudes, behaviors, and knowledge. For example, while students responded to this item, "I believe that having a budget is an important personal finance strategy," administrators responded to these items: "Freshmen believe that having a budget is an important personal finance strategy" and "Seniors believe that having a budget is an important personal finance strategy." The administrator-generated perception data for attitudes, behaviors, and knowledge were analyzed and reported in the same way the student data was for the first three research questions. Descriptive statistics (i.e., frequencies [n] and percentages [%]) were used to describe results from each of the 32 attitude items, 22 behavior items, and 22 knowledge items in the administrator survey. In addition, composite descriptive results provided an overall picture of student affairs administrators' perceptions of first-year students' personal finance attitudes, behaviors, and knowledge, as well as those of seniors. A series of t tests were run to compare the composite administrator perception scores for each of the three survey sections (i.e., attitudes, behaviors, and knowledge) with each of the student group's composite scores to check for significant differences. Results of each t test are reported in similar fashion to those presented for research question four. For the composite score comparisons, resultant statistics include means and standard deviations, the t statistics, degrees of freedom, and notations of significant differences. These statistics are presented in both table and narrative form as appropriate. Research question seven was also addressed through qualitative data derived from the administrator survey. Administrators were asked, "What, if any, specific problems or difficulties do you see college students at your campus facing regarding money management, finances, etc.?" Through basic qualitative analyses of responses (e.g., categorizing, subcategorizing), the
104 104 researcher was able to identify themes which are presented in text, with direct quotations supplied as appropriate.
Research Question Eight: What strategies can be recommended by student affairs professionals at selected Baptist universities that can align institutional mission with programmatic initiatives, integrate personal finance into the college curriculum and cocurriculum, and encourage application of personal finance theory into student life? This research question was informed by two Likert-type survey items and two openended questions. The former, mentioned previously under in the demographics section of this chapter, targeted administrators' opinions of how important it is to teach college students about personal finance concepts and applications, and how well each respondent thought his/her employing university was addressing the issue of personal finance education for its students. The two open-ended questions solicited respondents' input about (1) strategies that could be incorporated into the curriculum or cocurriculum to address personal finance issues and yet fit with their institution's mission, and (2) strategies already implemented at their institution to teach students about personal finance issues. Basic qualitative data analysis techniques were used to examine responses to each openended survey item, chiefly, categorizing and subcategorizing responses. According to Charles and Mertler (2002), "qualitative data are analyzed logico-inductively, a thought process that uses logic to make sense of observations" (p. 180). They outline the basic process as follows: (1) observations are made of behaviors, situations, etc., (2) topics are identified from these observations and are examined to discover patterns and categories, (3) conclusions are induced from observations and are stated verbally, and (4) the conclusions are used to answer research
105 105 questions (p. 180). In the present study, observations took the form of respondents' personal observations as reported via their responses to each open-ended survey item. The topics were largely guided by each survey question (e.g., curricular strategies that could be implemented to address personal finance education). Within each topic, however, a variety of patterns and categories were evident.
Review and Approval Process The present research study was subject to two levels of review. As an enrolled student of Bowling Green State University (BGSU), the researcher was required to obtain approval from the BGSU Human Subjects Review Board (HSRB). The board conducted an expedited review as the survey research project would not be terribly invasive. In addition, the HSRB at BGSU had previously granted permission for administration of the student version of the survey (Marsh, 2004). Once approval from BGSU was granted (see Appendix A), the researcher contacted the president of each of the eight Baptist universities (see Appendix B) in Texas to explain the research project, solicit permission to survey administrators and students, and request connection with a contact person who could provide the necessary sampling frames. All eight presidents granted permission to participate, but only six institutions were able to provide the sampling frames according to the researcher's time line. The researcher was not required to submit human subjects review forms to any of the eight Baptist institutions, though some carefully scrutinized the proposal letter and asked clarifying questions to ensure that administrators' and students' rights as human subjects would be protected.
106 106 CHAPTER IV. RESULTS
The preceding chapters provided an overview of the topic under consideration--an examination of the personal finance attitudes, behaviors, and knowledge levels of first-year and senior students at Baptist universities in Texas--and a survey of the literature related to personal finance issues with a particular emphasis on college students. Following the literature review, the methodological procedures for the study were outlined. This chapter will include a presentation of the results from the analyses conducted to address each research question. The review of results will be guided by the eight research questions, proceeding down the list of questions in order. First, however, an overview of the research participants' demographic characteristics is presented.
Response Rates and Demographic Characteristics Participants in this study were drawn from two groups: first-year and senior students enrolled at one of six participating Baptist universities in Texas, and student affairs administrators employed at the same six institutions. A systematic random sample of 2,100 students evenly distributed across the participating institutions (350 students per institution [175 first-year students and 175 seniors]) resulted in a 19% response rate, with 408 useable sets of student data received. Cronbach's alpha (α) reliability coefficients for the first response column of the Personal Finance Survey: Student Version were .46 (Attitudes), .62 (Behaviors), and .94 (Knowledge), and for the second response column (university experience) Cronbach's alpha (α) reliability coefficients were .71 (Attitudes), .71 (Behaviors), and .94 (Knowledge). The entire population of student affairs personnel at the six participating institutions represented the sample
107 107 of administrators, and a hearty response rate (100/169 or 59%) was realized. For the Personal Finance Survey: Administrator Version, Cronbach's alpha (α) reliability coefficients for perceptions of first-year students and seniors, respectively, were .77 and .76 (Attitudes), .88 and .86 (Behaviors), and .77 and .93 (Knowledge).
Demographic Characteristics of Students The Personal Finance Survey: Student Version posed a series of items designed to collect demographic data, an overview of which is provided in Table 1. Table 1 Demographic Characteristics of Student Participants (N = 408) Characteristic
FY Students
Seniors
Total
n
%
n
%
n
%
120
67
157
69
277
68
60
33
71
31
131
32
170
94
186
82
356
87
0
0
37
16
37
9
10
6
5
2
15
4
Full-time student
178
99
219
96
397
97
Part-time student
1
0.5
9
4
10
2
No response
1
0.5
0
0
1
