Financial Literacy and its Impact on Financial Management Motivational Behaviour: A Study of Private College Students in Kota Kinabalu

Abstract

Financial literacy has become a foundational life competency for tertiary students who are navigating the transition to financial independence. Yet empirical evidence on its behavioural consequences in underserved Malaysian regions, particularly Sabah in East Malaysia, remains scarce. This study examines the level of financial literacy among private college students in Kota Kinabalu and tests its impact on their financial management motivational behaviour (FMMB). Grounded in the Theory of Planned Behaviour, Social Cognitive Theory, and the Locus of Control framework, the study adopts a quantitative, cross-sectional, explanatory case-study design. A structured questionnaire was administered to 220 diploma and certificate students selected through stratified random sampling across twelve programmes. The instrument was adapted from the OECD/INFE Toolkit, the Lusardi and Mitchell literacy items, the Financial Self-Efficacy Scale, and the Financial Management Behavior Scale. Data were analysed using descriptive statistics, one-sample t-tests, Pearson product-moment correlation, and simple linear regression in IBM SPSS Version 27.The findings reveal a moderate level of objective financial literacy (M = 2.50 out of 5), contrasted with significantly above-neutral self-perceived literacy (M = 3.65; t(219) = 8.59, p < .001) and motivational behaviour (M = 3.68; t(219) = 8.61, p < .001). This pattern is consistent with the overconfidence documented in previous studies. A strong, positive, and statistically significant relationship emerged between financial literacy and motivational behaviour (r = .85, p < .001). Regression analysis further showed that literacy explained 72.8% of the variance in motivational behaviour (R² = .728; F(1, 218) = 583.62, p < .001). The study contributes theoretically by operationalising FMMB as a distinct motivational construct that links knowledge to sustained practice. It contributes contextually by providing Sabah-specific evidence from a private-college sample, and practically by informing Malaysia's National Strategy for Financial Literacy and Sustainable Development Goal 4. Implications for educators, institutions, and policymakers are discussed.