Determinants of financial literacy and financial well-being: Structural equation modelling for Gaziantep and surrounding districts

Low level of financial literacy, considered a potential reason for financial crises, has been a hot topic of discussion in recent years. The increase in the diversity of financial products, easier access to financial markets, and the proliferation of banking services such as credit cards and consumer loans have created the need for financial literacy for individuals. Therefore, financial education needs to take its place in the general education system for a more financially conscious society. An increase in financial literacy levels may lead to more use of financial services, more conscious investment and saving decisions and easier control of budgeting, thereby improving financial wellbeing. In this context, the current dissertation aimed to measure the financial literacy levels of university students in Gaziantep and surrounding districts and to determine the variables that affect financial literacy and financial wellbeing. For the research, a questionnaire was administered to 1,856 students in 10 universities (8 public and 2 private universities). The financial literacy scale used in the study has been adapted into Turkish from the scale developed by Mandell (2002) and used by the Jump$tart Coalition in the USA. The findings obtained using the financial literacy scale have shown that university students have low levels of financial literacy. As a result of the Structural Equation Modelling analysis, it has been demonstrated that the variables affecting financial literacy are financial self-efficacy, the media effect as a financial socialization variable, gender and the income status of the family, whereas financial wellbeing has been found to be affected by financial self-efficacy, the education effect as a financial socialization variable and the income status of the family. Furthermore, an alternative model including all the variables has been suggested in the fourth chapter of the dissertation.