Project Piggybank: A Study on Financial Awareness and Financial Behaviour Among Students

Financial literacy is an essential life skill necessary for effective debt management and long-term financial security; however, it remains insufficiently integrated into formal school curricula. This study, titled Project Piggybank, investigates financial awareness and financial behaviour among students aged 16–25 years. The research examines students’ financial knowledge, saving habits, budgeting practices, employment influence, and financial decision-making confidence. A structured questionnaire was used to collect primary data on objective financial knowledge (e.g., interest calculation) and behavioural indicators (e.g., saving frequency and credit usage). Descriptive statistical tools and a Chi-square test were applied for analysis. The findings reveal strong theoretical financial knowledge but moderate behavioural implementation, indicating a knowledge–behaviour gap. The study recommends integrating structured and practical financial literacy programs into school curricula to enhance financial preparedness.

Keywords: Financial literacy, student behaviour, budgeting, financial education, saving habits

In today’s fast-paced digital economy, financial literacy is no longer just a “bonus” skill—it is a fundamental necessity. With the rise of UPI, digital wallets, easy credit, and online investing, young people are managing money earlier than ever before. However, while students may be tech-savvy, many lack a foundational understanding of essential concepts like compound interest, disciplined budgeting, and the risks of debt.

1.1 The Gap in Modern Education

Despite the clear importance of money management, there remains a significant “literacy gap” in our formal education system. Traditional school curricula are heavily weighted toward academic subjects like Mathematics, Science, and Languages. While a student might be able to solve complex calculus problems, they often graduate without a basic understanding of how compound interest works, how to create a personal budget, or how to manage credit card debt. This lack of practical financial education leaves many young adults vulnerable to predatory lending, impulsive spending habits, and long-term financial stress.

1.2 The Rationale for Research

Financial behavior is often formed during the teenage years. Without a structured foundation, students may enter the workforce or higher education with poor habits that lead to a cycle of debt and financial insecurity. Research suggests that there is often a disconnect between what students think they know about money and how they actually behave when they have it. Understanding this gap is essential for developing educational programs that go beyond theory and focus on real-world application.

1.3 Project Piggybank

To address this issue, Project Piggybank was developed to evaluate the current state of financial awareness among students. By analyzing data on how students save, spend, and perceive money, this study aims to answer a critical question: Are students prepared for the financial responsibilities of adulthood? Through a structured survey, this research explores the link between what students know (theory) and how they actually behave (practice), ultimately advocating for the inclusion of financial education in the modern classroom.

2.1 The Global and National State of Financial Literacy

Research by the OECD (2024) and recent Indian studies (e.g., IJFMR, 2026) consistently show that while young adults are increasingly using digital payment tools like UPI, their foundational financial knowledge remains low. A pan-India survey revealed that only about 27% of Indians are considered financially literate. Studies highlight that students often struggle with “The Big Three” financial concepts: inflation, compound interest, and risk diversification.

2.2 Knowledge vs. Behavioral Gaps

A critical theme in recent literature is the “Action Gap.” Researchers such as Kaiser & Menkhoff (2020) and Zulaihati et al. (2023) found that high scores on a financial test do not always lead to good financial habits. Many students understand the theory of saving but fail to practice it due to “present bias”—the tendency to value immediate spending (like fast fashion or eating out) over long-term security. This supports the need for behavioral studies like Project Piggybank.

2.3 The Role of Financial Socialization

Literature suggests that “Financial Socialization”—learning from parents, peers, and the media—is a primary teacher for students. According to Money Matters (2025), young adults who observe their parents budgeting or discussing investments are significantly more likely to develop responsible habits themselves. However, as financial products become more digital and complex, parental guidance alone is becoming insufficient, increasing the demand for formal school-based education.

2.4 Impact of Employment and Work Experience

Studies focusing on student employment (e.g., Pant, 2024) indicate that students who hold part-time jobs or internships generally exhibit higher financial awareness. Having “skin in the game” by earning their own money forces individuals to prioritize expenses. However, research by Struckell et al. (2022) notes that without proper education, even employed students can fall into “lifestyle creep,” where their spending increases as fast as their earnings.

Shim et al. (2010) studied the relationship between financial knowledge and financial behaviour among young adults. Their findings indicated that individuals with higher financial literacy were more likely to save regularly and manage expenses effectively. The study also suggested that employment experience positively influences financial responsibility.

Furthermore, Mandell (2008) found that while many students could answer financial literacy questions correctly, their real-life financial practices did not always reflect their knowledge. This highlights the gap between theoretical understanding and actual financial behaviour.

2.5 The Necessity of School Integration

Overall, existing literature confirms the importance of financial literacy but reveals gaps in understanding how financial knowledge translates into real-life behaviour, especially among young individuals aged 16–25 years. Therefore, Project Piggybank builds on these existing studies by specifically focusing on the 16–25 age bracket in the current digital-first economy.

Although financial literacy is widely discussed in academic research, several important gaps remain, particularly concerning young individuals aged 16–25 years. Most existing studies focus primarily on adults, working professionals, or university students, often overlooking the transitional age group where individuals begin shifting from financial dependence to independent money management. This developmental stage is critical, yet insufficiently explored in an integrated manner.

Another significant gap in the literature is the separation between financial knowledge and financial behaviour. Many studies assess theoretical understanding—such as calculating interest or defining a budget—but do not examine whether this knowledge translates into responsible real-life financial actions. The connection between what young individuals know about money and how they actually manage it—through saving, budgeting, or controlling spending—remains under-researched.

Furthermore, limited research has explored how employment status (full-time, part-time, casual, or unemployed) influences financial awareness and saving habits within this age group. While financial education is often recommended by educators and policymakers, there is also insufficient evidence regarding how students themselves perceive the importance of learning financial skills in school.

Therefore, this study aims to address these gaps by examining financial knowledge, financial behaviour, employment influence, and student perceptions together to provide a more comprehensive understanding of financial preparedness among individuals aged 16–25 years.

• What is the level of financial literacy among students aged 16–25 years regarding interest, savings, and budgeting?
• What are the saving, spending, and budgeting behaviours of students within this age group?
• Is there a significant relationship between students’ financial knowledge and their financial behaviour?
• How do students perceive the importance of financial education in schools, and does employment status influence their financial awareness and saving habits?

• To assess the level of financial literacy among students aged 16–25 years regarding interest, savings, and budgeting.
• To examine the saving, spending, and budgeting behaviours of students within the 16–25 age group.
• To analyse the relationship between students’ financial knowledge and their financial behaviour.
• To evaluate students’ perceptions regarding the importance of financial education in schools.
• To examine whether employment status influences financial awareness and saving habits among students.

This study employs a Descriptive Research Design with a Quantitative Approach. This means the research aims to describe the current state of financial literacy among students by collecting numerical data through a survey and analyzing it to find patterns and trends.

7.1 Universe and Population

The target population of this study consists of students aged 16–25 years. This age group represents a transitional stage where individuals begin developing independent financial habits and decision-making skills.

7.2 Sampling Technique and Sample Size

Participants were selected using convenience sampling, as respondents were chosen based on accessibility and willingness to participate. A total of 187 respondents were surveyed, out of which responses of 160 were considered to ensure a diverse range of perspectives across different educational backgrounds and employment statuses.

7.3 Data Collection Tool (The Instrument)

The primary data was collected using a Structured Questionnaire. The questionnaire was divided into four key sections:

• Demographics: Age, gender, education level, and employment status.
• Financial Knowledge: Objective questions on interest calculation, inflation, and budgeting basics.
• Financial Behaviour: Self-reported data on saving frequency, spending habits, and use of digital payment apps (UPI).
• Perceptions: A Likert-scale section (Agree/Disagree) regarding the inclusion of financial literacy in schools.

7.4 Sources of Data

• Primary Data: Collected directly from respondents through the survey mentioned above.
• Secondary Data: Gathered from academic journals, news reports, government publications (RBI/OECD), and previous research papers to support the literature review.

7.5 Data Analysis Plan

The collected data will be analysed using:

• Percentage Analysis to determine levels of financial literacy and behaviour
• Frequency Distribution to summarize responses
• Comparative Analysis to examine differences based on employment status
• Simple Correlation Analysis (if applicable) to assess the relationship between financial knowledge and financial behaviour

The results will be presented using tables and charts for better interpretation.

This chapter presents data analysis using descriptive statistics and one inferential statistical test (Chi-square test) appropriate for Class 12 research level. The valid sample size after data cleaning was 160 respondents.

Hypothesis 1: Financial Knowledge and Saving Behaviour

H₀: There is no significant relationship between financial knowledge and saving behaviour.
H₁: There is a significant relationship between financial knowledge and saving behaviour.

Contingency Table:

Step 1: Calculate Expected Values using formula: E = (Row Total × Column Total) / N

• Expected value for (Correct & Regular) = (142 × 110) / 160 = 97.62
• Expected value for (Correct & Irregular) = (142 × 50) / 160 = 44.38
• Expected value for (Incorrect & Regular) = (18 × 110) / 160 = 12.38
• Expected value for (Incorrect & Irregular) = (18 × 50) / 160 = 5.62

Step 2: Apply Chi-square formula: χ² = Σ (O − E)² / E

Calculated χ² value = 15.847

At 5% significance level and degree of freedom (df = 1), the critical value is 3.84. Since calculated χ² > 3.84, we reject H₀ and accept H₁. This indicates a significant relationship between financial knowledge and saving behaviour.

Hypothesis 2: Financial Literacy and Budgeting Behaviour

Budget Maintenance Percentage Calculation:

Percentage maintaining budget = (80 / 160) × 100 = 50.0%

Although financial knowledge accuracy was above 85%, only about 50% maintain a personal budget. This shows partial support for H₁ but also confirms the presence of a Knowledge–Behaviour Gap.

Hypothesis 3: Employment Status and Saving Behaviour

Employed saving rate = (50 / 65) × 100 = 76.92%

Unemployed saving rate = (60 / 95) × 100 = 63.16%

The slightly higher saving percentage among employed students indicates moderate support for H₁. Employment exposure appears to positively influence saving behaviour.

Hypothesis 4: Importance and Financial Confidence (Likert Analysis)

Mean Calculation Formula: Mean = Σ(f × x) / N

• Mean Confidence = 3.22
• Mean Importance = 4.36

The higher mean score for importance (close to 5) indicates strong agreement that financial education is necessary. The moderate confidence mean (around 3) shows students feel only moderately confident. This suggests that increasing financial education may improve confidence levels.

Overall Interpretation

The statistical and descriptive analysis confirms that students possess strong financial knowledge. However, behavioural indicators such as budgeting and expense tracking remain moderate. The Chi-square test confirms a significant relationship between knowledge and saving behaviour, while descriptive analysis highlights the presence of a Knowledge–Behaviour Gap.

The study concludes that students aged 16–25 years demonstrate strong theoretical financial literacy. However, practical financial behaviours such as budgeting and expense tracking are only moderately practiced. The Chi-square analysis confirmed a significant relationship between financial knowledge and saving behaviour. Nevertheless, knowledge alone does not fully translate into consistent financial discipline.

The findings strongly support the inclusion of structured and practical financial education in school curricula.

9.1 Recommendations

1. Introduce practical budgeting and tax workshops in schools.
2. Incorporate behavioural finance elements in curriculum.
3. Provide digital financial tool training.
4. Encourage early saving and investment awareness.
5. Conduct periodic financial literacy assessments.

By implementing these recommendations, educational institutions can bridge the gap between financial knowledge and financial behaviour.

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