Financial Literacy and Self-Efficacy Shape Student Money Management

Abstract

General Background: Financial literacy and self-efficacy are widely recognized as pivotal competencies in ensuring sound financial behavior, particularly among university students navigating financial independence. Specific Background: However, there is limited empirical research examining these variables within the context of Islamic higher education institutions in Indonesia. Knowledge Gap: Prior studies have insufficiently explored the intersection of financial knowledge, psychological confidence, and practical financial behavior in this demographic. Aims: This study investigates the relationship between financial literacy, self-efficacy, and financial management behavior among students of the Faculty of Islamic Economics and Business (FEBI) at the State Islamic University of North Sumatra. Results: Utilizing a sample of 98 students selected via the Slovin formula from a population of 4,300, data was gathered through Likert-scale surveys and analyzed using SPSS version 25. Novelty: The research integrates multiple linear regression with classical assumption and hypothesis testing to yield a comprehensive analytical perspective. Implications: Findings reveal that both financial literacy and self-efficacy significantly enhance students’ capacity for responsible financial management. This underscores the need for integrative educational strategies that simultaneously address financial knowledge and confidence-building to foster healthier financial behaviors in Islamic academic contexts. Highlights: Reveals a strong link between financial knowledge and spending habits. Highlights self-efficacy as a key driver of financial responsibility. Uses SPSS and robust statistical methods for valid conclusions. Keywords: Financial Literacy, Self-Efficacy, Financial Behavior, Islamic University, Student Finance