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CHAPTER 2: LITERATURE REVIEW

1.0 INTRODUCTION

This chapter is about the literature reviews that have been reviewed based on the research

topic. Literature is a report of a compilation and review means is in written forms on the research

topic which write by those people with authority in the field. In this study, I want to find out the

causes of student finance problems based on various resources such as book, newspaper article,

website or magazine. So, by using all of the resources I can find more information about the

causes of student finance problems and also provide some opinion about the situation.

As we know, majority of students receive their scholarship or education loan at the

beginning of each semester. So, they not have any problem at the beginning semester compare

with last of each semester. Based on Financial Behavior and Problems among College Students

in Malaysia: Research and Education Implication by Mohamad Fazli Sabri, there are many

causes about student finance problems such as parents marital status and educational level,

family income, sibling rank, types of college, residence and education fund (Mohamad Fazli

Sabri et al, 2008).

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2.0 CAUSES OF STUDENT FINANCE PROBLEMS

2.1 UNNECESSARY THINGS

Today, we know that majority of students have money from their scholarship and

education loan for each semester with cash and in a big amount. So they have a problem for

planning their finance with more efficiently. It is because for each semester, they have many

things for use in their study such as reference book, fees and more.

The finding is supported by Mohamad Fazli Sabri et al (2008), more than half of the

respondents did not save any money when they received their scholarship or education loan.

More than half of the students used their money for shopping. About 45% of them spent all their

money before the end of the semester; 17% of students gifted some money to their family, and

13% used their money to repay debts. My opinion about this situation is student must planning

their finance from the beginning of each semester so that they just using the money for necessary

things.

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2.2 THE INFLUENCE OF FAMILY MEMBERS

The second causes of student finance problems are family aspect. This is because some

student comes from low income families. Student had gifted some money to their family for help

them from finance crisis. At the same time, this situation can make the student cannot manage

their finance properly because they had to use their scholarship or education loan for another

things. Sometimes, student cant manage their finance because of a strong family influence. Base

on College Students and Financial Literacy: What They Know and What We Need to Learn by

Cude B. J, the influence of family members is important but complex. Most students reported

hearing various messages about money from various family members. Most of the messages

students shared related to controlling spending and avoiding or using credit wisely. In addition,

many were very aware that they and a sibling approached financial management differently and

wanted to be different from or like their sibling, depending on whether the sibling was more or

less responsible. (Cude et al, 2006).

Unlike the research from Cude B. J et al (2006), the most significant influence on

students money management behaviors was their parents (70.0%) reported parents together;

13.0% said mother, 6.0%, father). Few students identified as their most important influence a

brother/sister (1.2%), grandparents (1.9%), and other family relative (1.2%). So, student should

manage their finance with using their own opinion and ways. It is because they often influenced

by their family and not confident to make own decision about their finance.

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In this case, student will lost focus for manage their finance because of family

intervention. The effect of this situation is student will leave their finances managed by family.

For another situation that related with this cause is family problem that can make the student

having a problem in their finance. Mohamad Fazli Sabri et al (2008) clearly has noted, students

who have college graduate parents, higher family income, only child, tend to spend on more

items, and have no saving were more likely to have financial problems. There is a negative

significant difference between students who have late childhood consumer experience and

financial problems. Also those who have had more financial socialization have fewer financial

problems.

2.3 FAILED TO MANAGE THEIR FINANCE PROPERLY

The last cause is student failed to manage their finance properly. As we know, student

attitude can give an impact to their finance management. Some student have positive attitude and

another student have negative attitude. Refer to Cude B. J et al (2006), one conclusion from the

research is that some college students are not managing their finances well, because they have

not adopted the set of recommended practices. Another conclusion is that some recommended

practices should be modified to more accurately match ways in which college students

responsibly manage their finances.

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Student also failed to manage their finance with more efficiently because not prepare to

face some possibility that can giving bad effect to their finance. Base on Changing College

Students Financial Knowledge, Attitudes, and Behavior through Seminar Participation by

Borden L. M, young adults also may be unprepared to effectively manage the psychological

costs associated with high debt; for example, increased levels of stress and decreased levels of

psychological well-being (Borden L. M. et al, 2008).

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3.0 CONCLUSION

As a conclusion, student should to know about financial knowledge, responsible attitudes

and finding their weakness in finance problem. They must try to manage their finance without

any intervention from outside such as family, friends and more. Others can also help students in

financial management by establishing some of activities that can attract their interest. According to

Cude B. J et al (2006), other options available to campus administrators include workshops and

seminars, financial counseling centers on campus, peer education, and Internet resources.

However, parents also should to have knowledge about finance management so that can

conduct or discuss with their children. Also refer to Cude B. J et al (2006), parents needs to be

aware of the major role that they play in the financial socialization of their children and that this

process occurs at a very early age. Resources are needed to educate parents about how to

constructively talk to their children about financial management issues. So, all parties should

cooperate in this matter so that students can focus on their study.

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4.0 REFERENCES LIST

Financial Behavior and Problems among College Students in Malaysia: Research and Education
Implication. Consumer Interests Annual. Volume 54, 2008. Retrieved 2008, from
consumerinterests.org/images/56.SabriMasudHiraMacdonaldPaim.pdf.

Borden L. M, Lee S. A, Serido J, Collins D (2008), Changing College Students Financial


Knowledge, Attitudes, and Behaviour through Seminar Participation. J Fam Econ Iss (2008) 29:
23-40. Retrieved November 2007, from www.springerlink.com/index/f69v62227391vr43.pdf
Cude B. J, Lawrence F. C, Machtmes K, Lyons A. C, Metzger K, LeJeune E, Marks L (2006),
College Students and Financial Literacy:What They Know and What We Need to Learn. Eastern
Family Economics and Resource Management Association. Conference (2006). Retrieved 2006,
from http://mrupured.myweb.uga.edu/conf/22.pdf

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RESEARCH QUESTIONS:

What are the causes of finance problem among FSKKP students?

POSSIBLE ANSWER:

The causes of finance problem among FSKKP students are when receiving a scholarship or
education loan, they always buy an unnecessary things, the influence of family members and
failed to manage their finance properly.

Authors Name Unnecessary Things The Influence of Family Failed to Manage their
Members Finance Properly
In recent years, educators, The most significant A number of students
Cude B. J, Lawrence F. C,
policy makers, and influence on students described using online
Machtmes K, Lyons A. C,
university officials have money management banking and online access
Metzger K, LeJeune E,
focused on one aspect of behaviors was their to their credit card
Marks L (2006)
college parents (70.0% accounts. These students
students financial reported parents together; were not writing checks or
practices their use of 13.0% said mother, 6.0%, balancing checkbooks.
credit, and most father). Few students However, they did have
specifically credit cards. identified as their most systems for
Increased use of credit important checking their bank
cards by influence a brother/sister account balances (usually
college students has (1.2%), grandparents to avoid over drafting) and
generated a concern (1.9%), other family managing their credit card
among many that credit relative (1.2%) or friend charges in relation to their
card debt puts college (1.5%). A small credit limit
students at greater risk for percentage (5.2%)
financial problems after reported other, which
graduation included boyfriend,
girlfriend, husband, wife,

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teacher, self, personal
experience, church, and
classes.
Some researchers have Student often begin their
Borden L. M, Lee S. A,
suggested that lower college careers without
Serido J, Collins D (2008)
income families may not
ever having been solely
be aware of
responsible for their own
college financing options
personal finances
(Olson 1982) or may be
unprepared to effectively
uncomfortable using credit
manage the psychological
for college expenses
costs
(Churaman 1992)

associated with high debt


uncertain about where students from a rural area, More than half of the
Mohamad Fazli Sabri,
money is spent (2.58); buy parent marital status is respondents did not save
MacDonald M, Hira T. K,
unnecessary things (2.36); widow, low family any money when they
Jariah Masud, Paim L,
lend money to friends income, middle child, received their scholarship
Mohd. Amin Othman
(2.27); and skip meals to public university, or
(2008),
save money (2.17) stay on campus, GPA education loan. More than
between 2.5-3.74, and tend half of the students used
to spend on more items their money for shopping.
were likely to report About 45% of them spent
engaging in more effective all their
financial behaviors money before the end of
the semester; 17% of
students gifted some
money to their family, and
13% used their money to
repay debts.

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