Determinants of financial habits

Abstract

This study concerns financial customs and intelligence of Hungarian college students. The authors focus on practical matters, viz., which the determinants of banking and related services are. The research is based on a survey of 2020, catechizing 1004 respondents attending five disparate faculties in five different Hungarian universities. Beyond conventional sociodemographic variables, we have included two blocks of questions about financial customs and knowledge. They were aggregated to deliver the indices of financial consciousness and financial intelligence. The analysis of determinants of different personal customs was prosecuted by the classification method of CHAID decision tree. Differences among the groups of habits were principally decided by financial consciousness and not by financial intelligence. Contrary to financial consciousness, which is the key driver of group dissimilitude, financial intelligence only influenced people’s customs at the third level of the decision tree. Services in question have proven to be most peculiar to males above the age of 23 with a high level of financial consciousness, and students attending economic or law faculties, most preferably working and studying simultaneously and choosing a correspondence course instead of full-time education. Considering university students are the potential future clients of banks offering the services being analyzed, the precipitate of this study may be a useful tool to grasp the preferences and characteristics of the target group. Keywords: finances, consciousness, intelligence, student, decision tree, banking