Effects of Financial Knowledge on Rationality of Financial Behavior in College Student: A Mediation Model

Abstract

Financial literacy includes knowledge, as well as attitudes, behaviors, and skills. This research explores how different degrees of financial literacy affect the rationality of financial decisions among university students, utilizing insights from the Delayed Gratification theory. Through the exploration of a moderated mediation model, the research delves into the mediating role of Delayed Gratification. Findings from a detailed survey of 4676 Chinese college students highlight two key points. Firstly, the research indicates that college students' knowledge of finance has a substantial and positive effect on the rationality of their financial actions. Secondly, the findings reveal that Delayed Gratification serves as a partial mediator in the complex link between financial knowledge and the rationality of financial behavior. This research contributes to the existing body of knowledge on financial literacy while also deepening our comprehension of how college students' financial awareness shapes the dynamics of their financial decision-making rationality. The results stress the significance of considering the information students possess and underscore the importance of Delayed Gratification in translating knowledge into responsible financial behavior. Considering the essential importance of financial literacy in managing today's intricate financial environment, this study offers significant insights that could guide educational approaches and initiatives aimed at enhancing the financial health of college students.