INFLUENCE OF FINANCIAL LITERACY ON STUDENT’S BUDGETING BEHAVIOR IN HIGHER LEARNNG INSTITUTIONS IN TANZANIA: A CASE OF SELECTED HIGHER LEARNING INSTITUTIONS IN NYAMAGANA MWANZA CITY
Purpose of the Study: This study investigates the influence of financial literacy on students’ budgeting behavior in higher learning institutions in Nyamagana District, Mwanza, Tanzania. Specifically, it examines how financial habits adopted from parents, peer influence, and sources of income shape students’ budgeting practices.
Methodology: The study employed a pragmatic research philosophy using a mixed-methods approach. A cross-sectional descriptive design was applied, combining quantitative data from structured questionnaires administered to 375 students from St. Augustine University of Tanzania (SAUT) and the Institute of Financial Management (IFM), and qualitative insights from key informant interviews with selected students, the Dean of Students, and loan officers. Quantitative data were analyzed using correlation and regression techniques.
Findings from the Study: Results indicate that financial habits adopted from parents (B = 0.212, p = 0.003), peer influence (B = 0.213, p = 0.009), and students’ sources of income (B = 0.109, p = 0.030) significantly influence budgeting behavior. Positive financial habits foster disciplined money management, peer interactions reinforce both positive and negative financial behaviors, and stable income sources enhance students’ ability to plan and allocate funds effectively. Social Learning Theory provides a useful framework for understanding these dynamics.
Originality: The study contributes to the limited literature on financial literacy and student budgeting behavior in the Tanzanian context, offering empirical evidence on the combined effect of parental habits, peer influence, and income on budgeting practices.
Practical Implications: Findings highlight the importance of financial literacy education, parental engagement, and structured peer support programs in promoting responsible financial management among students. Institutions may design workshops, mentorship programs, and policies to strengthen budgeting skills.
Social Implications: Enhancing students’ financial literacy and budgeting behavior contributes to long-term financial responsibility, reduces dependency on external support, and fosters economic empowerment for young adults, with broader implications for household financial stability in the community.
Keywords: Financial literacy, Budgeting behavior, Parental influence, Peer influence, Students, Income, Tanzania
