Abstract:
This study explores the relationship between financial behaviour and personal
financial distress among management undergraduates in Sri Lankan state universities.
Rising inflation, limited income opportunities, and indirect costs of higher education
have heightened financial challenges, which adversely influence students’ academic
performance and psychological well-being. Despite their academic exposure to
finance, many undergraduates struggle to apply effective budgeting, saving,
spending, and debt management practices in real life. The objective of this research
was to examine how these financial behaviours contribute to or mitigate personal
financial distress. A quantitative approach was adopted, and the primary data were
collected through a structured questionnaire from 364 undergraduates selected using
a stratified random sampling technique across five state universities in Sri Lanka.
Data were analysed using descriptive statistics, correlation, and multiple regression
analysis with SPSS. The results demonstrate that budgeting habits, spending patterns,
saving behaviour, and debt management significantly influence personal financial
distress, where poor practices increase stress while effective practices reduce it. The
findings highlight a gap between theoretical financial knowledge and its practical
application, underscoring the need for experiential and skill-based financial
education. This study contributes to the body of knowledge by providing empirical
evidence from the Sri Lankan higher education context and emphasises the
importance of tailored financial literacy programmes. Strengthening such initiatives
can foster healthier financial habits, reduce anxiety, and enhance both academic
outcomes and long-term financial resilience of undergraduates.
