Peer Influence Among Students

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BACKGROUND INFORMATION A lot of people know that lack of savings is a critical problem amongst students. Students have very minimal knowledge when it comes to managing their money. In addition, they do not plan their budgets wisely and this is true of tertiary students. Sometimes friends influence them and this is what we refer to as peer influence. According to Montandon (2014), youngsters are greatly influenced by peers when it comes to decision-making. He also found that peer influence has a significant effect in the risk attitude of Gen Y. Likewise, Vincent-Wayne Mitchell et al (2015) emphasizes that youngsters also learn from direct and indirect interaction with peers. For instance, through discussion, rulemaking, reinforcement and also…show more content…
For example, Cude et. al. (2006) and Sam et. al. (2012) agreed that parents are highly influential in shaping their children’s financial behavior, hence children will look up to their parents when they start to manage their own financial matters. Olson (1982) claims that families who come from lower income may not be familiar with the college financing options. Similarly, Churaman (1992) states that the parents may be uncomfortable using credit for university expenses. Moreover, Joo et al. (2003) observe that students tend to mimic their parent’s behavior towards credit card use. Hence, these studies imply that family background may play a role in youngster’s attitudes and behaviors concerning the use of credit cards. According to Nellie Mae (2002), university graduates are facing with an average debt burden of $20,402 for both education and credit card debt combined. Similarly, Bianco and Bosco (2002) found that the financial experts voiced their concern on how serious consequences could bring upon those college students near and post graduation regarding the credit card debt together with student loan debt. In addition, Lusardi, Mitchell and Curto (2009) stressed that those who have high credit card debt or student loans delay people’s ability to accumulate…show more content…
Davidson (2006) stress that there is an increasing need of financial literacy awareness among the students who have a various spending pattern and he also recommends financial literacy training that should be conducted from earlier stage of education for instance, high schools and universities. Besides that, it is crucial for the authorities, for instance, the Ministry of Higher Education to propose and ensure that any financial education program that is meant to develop financial knowledge must not be in the form of general media. However, they must consider a structured approach to boost people’s understanding on personal financial

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