Honors Program Theses


Honors Program Thesis (UNI Access Only)

First Advisor

Frank Thompson, Advisor


Financial literacy;


Financial literacy affects all consumers. It is an important topic because the consequences of a financial decision can impact an individual’s choices for the rest of their lives. Young people in the United States of America have to make long-lasting financial decisions with little formal education in personal finance. One group of young adults needing to make financial decisions is university students. With such a high cost of post-secondary education, many finance it with student loans. Large student loan balances ultimately have repercussions on a young graduate’s future as the loans add a significant monthly payment to their budget. On average, students in the state of Iowa are graduating with $29,732 in debt, which ranks Iowa as the eighth highest state for student loan debt in the United States of America. At the University of Northern Iowa, 75% of students graduate with at least some debt (Cochran & Reed, 2015).

This high amount of student debt is not only a financial burden at the time of graduation, but, as students become professionals, it is also influences workforce decisions as students may sub-optimize their job search by taking a lower paying job in order to begin repaying their students loans as soon as possible after graduation. They may also delay plans to enter graduate school due to the high cost of undergraduate debt. According to a 2014 University of Arizona longitudinal study of over 1,000 students, nearly half (48.9%) of graduates with full-time jobs are still relying on their parents for financial support. This high number of graduates who are not self-sufficient, raises concern about student financial decision making skills (University of Arizona, 2014). An individual family member’s financial issues oftentimes can impact a whole family unit. As families rely on each other for support and information, lacking financial literacy skills can tend to be cyclical and ingrained within the family.

Financial issues and needing to work full-time are often the number one reason why students drop out of higher education (Ross, et al., 2012). The implications of poor financial management can affect more than students’ finances as it can affect their academic performance, mental and physical well-being, and even their ability to find employment after graduation (Adams & Moore 2007, Bodvarsson and Walker, 2004; Lyons, 2003, 2004, Shim, et al. 2009, Eastern Family Economics 2006). With so many areas of a person's life being affected by financial decisions, it is clear making sound financial decisions is important in making sure people can optimize their all areas of life.

Companies have a need for an educated workforce and it is in their best interests to assist in removing educational barriers for current and future employees. Furthermore, financial illiteracy increases stress and distractions in the workplace. A worker on average spends 28 hours on personal finances at work a month, costing an average of $5,000 per year (Qian, 2013). Additional research has shown similar statistics such as a study by D’Abate & Eddy (2007), which found employees spent over an hour a day on personal business in the workplace such as paying bills, making personal appointments, etc. This creates a presenteeism issue as an employee is at work, but performing at sub-optimal levels due to being distracted by personal issues and concerns from a variety of sources. Since employees are working on financial issues as well as dealing with medical and stress issues, it is estimated that presenteeism costs employers about $180 billion per year in lost productivity (Weaver, 2010). By improving employee financial literacy, companies will gain more focused workers, increasing productivity and benefitting companies’ net income. Companies can assist in this area of need because they have the resources and expertise necessary to educate consumers on their financial decisions, assisting them to make better financial decisions, and thus creating a more educated workplace consisting of professionals who are educated about their personal finances.

Year of Submission



Department of Finance

University Honors Designation

A thesis submitted in partial fulfillment of the requirements for the designation University Honors

Date Original


Object Description

1 PDF file (35 pages)



File Format


Off-Campus Download