CHAPTER 2: LITERATURE REVIEW

In order to examine the financial management behaviours of students at Durham

University, it is necessary to review past studies which have been conducted on this related topic.
An examination of the literature relevant to the present study revealed two guiding topics are;
Money Management Needs and Consumer Behaviour.

A research specifically addressed money management needs (Murphy & Archer, 2006). In
a study regarding student expense budgets, male and female students reported different financial
needs at different times in their college. For example, senior women spend more money in rent
than senior men. This difference was attributed to a preference. Women are likely to pay more
money for a nicer apartment. In one study, a random sample of undergraduate students at a large
South Eastern university were administered a survey which consisted of seven demographic
variables, and two open-ended questions. Students were asked to briefly describe two conditions
or situations which they found to be the most stressful in both personal and academic categories.
Of the respondents, 7% listed problems with finances as their first or second academically-related
stressor, while 27% listed problems with finances as their first or second personally-related
stressor.

Two years later, the same study was repeated, and 3% of respondents listed problem with
finances as an academic stressor, while 31% listed problems with finance a personal stressor.
Problems with finance again were reported more frequently by older students, and those living off
campus. Additionally, problems with finance were reported more frequently by those students in
fraternities and sororities. Researchers concluded that financial concerns are not addressed
effectively on campus (Murphy & Archer, 2006). Students’ money management needs do not
explain what attitudes they may have about money management. Therefore, information about
college students’ attitudes toward money management is relevant to the present study.

Comparing to one more research that related to consumer behaviour, the consumer
behaviour of college students have been studied in relation to Electronic Funds Transfer Systems
(EFTS) use, and buying behaviours (Bailey & Rudge, 2002; Churaman, 2005). Churaman (2005)
administered a questionnaire to college students enrolled in an upper-level finance course at a
large, East Coast university. Results from the questionnaire allowed the researcher to determine
patterns of ATM usage. At the time of the study, students reported using EFTS for over two and a
half years. 88%t percent of the respondents used ATMs to get cash, while 76% used ATMs to
check account balances. 66% percent of the respondents made deposits while using an ATM, 50%
made transfers from savings to checking accounts, while 49% made transfers from checking to
savings accounts. In a related study about college students’ consumer behaviours, Bailey and
Rudge (2002) surveyed randomly selected college students at a mid-sized residential university in
the Midwest. Respondents identified sources of income, and rated their use of name-brand
products in 12 categories. College students have a high degree of loyalty to, and most often use,
name-brand products. In terms of income, 61% of the respondents receive income from jobs, while
51% receive an allowance from their parents.

The literature on consumerism reveals a pattern about college students and adult
consumers. Textbook reviews at all levels lack comprehensive and current information about
consumerism. Students and adults report a limited understanding of financial management and
consumer issues. Moreover, what information they do hold may be dated, and no longer relevant
in the current economic environment. A limited understanding is apparent in other financial
management areas, as well. As a result, it is crucial to conduct the same study by examining other
factors that influence the financial management behaviours of students at Durham University.