THEME

Financial education in engineering students of the evening shift

daytime of the National University of Engineering UNI-RUPAP.

PALABRAS CLAVE:Educación financiera. Población joven universitaria.

Socioeconomic characteristics. Financial planning. Behavioral finance.

PROBLEM

In the United States, in 2008, less than 60% of high school students had
correct answers in a survey aimed at measuring financial education.
Japan, in the same year, a survey showed that 71% of adults
they lack information about financial stocks and bonds and 57% about
financial products in general (Red, 2008). In Latin America, less than half
the population understands the term 'interest rate' and is able to carry out
basic calculations regarding simple interest rate. The concept of inflation
it is also not understood by the majority of the population and an even smaller percentage is

able to calculate changes in the purchasing power of a certain amount

of money due to inflation.

In Latin America, just over 50% understand the relationship between risk and
profitability; however, less than half have a good understanding of the
relationship between risk and portfolio diversification (case of Colombia, Mexico and
Peru). Those with higher incomes have greater knowledge of issues
financial (Colombia and Peru). On average, women have a lower level of
financial knowledge that men (Hung, Yoong, and Brown, 2012;
OECD/INFE, 2013b). However, in most cases, women are the
responsible for the household budget and seem to be better regarding the
short-term money management. Likewise, women have a greater
risk aversion that men (Atkinson and Messy, 2012; Hung, Yoong and Brown,
2012; OECD/INFE, 2013b). The document of the organization for Cooperation and
economic development (OECD), Improving Financial Literacy, states that the lack
financial education in the modern globalized world makes individuals and
the families most prone to indebtedness and bankruptcy.

According to explorations -derived from interviews with key informants- conducted

by economist Osvaldo Gutiérrez; it is agreed that "Unfortunately, to
Most people and families don't like to talk about these topics, they don't
feel comfortable talking about their finances. However, many of the
economic problems originate from the limited financial literacy that
people and families have.
it can lead to developing risky financial behaviors.

In Nicaragua, according to Msc. Elaine, Creator of the first Finance blog.

Personnel (Silver with Chat), according to results obtained through
Surveys conducted with over 500 people yielded results that were not promising.
highlighting that 66% of the surveyed have some type of debt,
only 48% save "something" each month and less than 23% invest. If we are talking about
financial health terms this means that only 7% have a life
healthy finance, 33% have poor financial health and the rest of the
people are in the middle.

Elaine mentions that "basically in Nicaragua our financial education is

very very low and we don't have to be experts in personal finance to know
that something is wrong in the country when the majority of people owe a lot
más de lo que ahorran o invierten”.

We are individuals who tend to view our financial decisions as

unique, but what happens when six million people make the same bad choices
financial decisions. Basically, we are creating a country of much
consumerism that generates debt, little savings, almost no investment and zero
planning for the future.
 STATEMENT OF THE PROBLEM

Is the current level of knowledge about the financial field, on the part of the
daytime industrial engineering university students from the University
National Engineering UNI-RUPAP oscillating between precarious and limited?

What importance does financial education have for young people?

university students?

2. What are the characteristics of financial education and finances?

personnel?

3. What is the level of financial education among university students?

4. What are the socioeconomic characteristics that are reflected in the

framework of financial education?
 OBJECTIVES

General Objective

Establish the level of financial education of university students

daytime industrial engineering at the National University of Engineering UNI-
RUPAP

Specific objective

Structure a theoretical framework related to concepts, importance and

characteristics of financial education and personal finance.

Develop a referential framework on the level of financial education, mainly

in young populations at a global and Latin American level.

Make a diagnosis on socioeconomic characteristics, level of education

financial, level of planning and financial supervision, outstanding aspects
of financial products and services and a classification of finance
behavioral patterns of university students in industrial engineering during daytime shifts
from the National University of Engineering UNI-RUPAP.
 Justification

In recent years, several international organizations have warned about the

need to improve people's financial education, particularly those
young people, as deficiencies in this area can lead individuals to
to make wrong decisions about their personal economy, with the consequent
risk of asset losses, excessive indebtedness leading to exclusion
financial.

Providing financial education for children and young people is a

important component in the transition from childhood to adulthood and education
of financially responsible citizens. The OECD (2012) reports that 'the
financial education should start in school. People should be
educated about financial matters as soon as possible.

For the economies of Latin America, financial education is a priority, already

that it has the potential to generate a positive effect on inequality and the
poverty, as well as on economic growth. Generally, it is considered
that a 10% increase in access to financial services generates a
reduction of 0.6 points in the Gini inequality coefficient (Honohan, 2007)
while a 10% increase in private credit reduces poverty by nearly
of 3% (García, N., Grifoni, A., López, J.C. and Mejía, D., (2013).

The proper familiarity with basic economic concepts, from the

early ages can help in adulthood to choose products and services
financial products that best suit one's own needs. In many countries, it
has been deepening their awareness about the importance of that the
people go through financial education processes, for which they have
implemented programs, workshops, communication channels in order to promote
a culture of saving in the country.
 Theoretical Framework

4.1. Theoretical Conceptual Framework

4.1.1. Financial Education

Financial education, just like general education, is one of the engines

of social development because it allows the generation of human capital, but
especially because it offers better life alternatives when making decisions
adequate finances. Ruiz Pérez (2010). According to Mejía, D. (2012). and Rica,
C. d. (2011) financial education 'is the process by which both the
consumers like financial investors achieve a better understanding of
the different financial products, their risks and benefits, and that, through the
information or instruction, develop skills that allow for better decision making
of decisions, which results in greater economic well-being.
Following Ruiz Pérez, Eliseo (2010) and Nova Bolsa Brasil. News (2011), there
financial education enables individuals to improve the
understanding of financial concepts and products, prevent fraud, take
appropriate decisions according to their circumstances and needs and avoid situations
undesirable effects derived either from excessive indebtedness or from positions of
inadequate risks.
Gómez describes financial education as the transmission of knowledge,
skills and attitudes necessary for people to adopt good
money management practices for income generation, spending, saving,
indebtedness and investment. Gómez-Soto, F. (2009).
4.1.2. Importance of Financial Education

Financial education is more important now than in the past.

past, due to the rapid growth of financial markets and to the
existence of more numerous and complex financial products.
Financial education allows people access to information and
tools about the functioning of the complex world of the economy and the
finance; and its impact and importance in daily life, therefore, it is vital,
in decision-making.
[Link]. Incidencia Macroeconómica

Macroeconomically, the international financial crisis has awakened a lot

interest of public and private institutions, because financial consumers
be more aware of their credit decisions and have a better
knowledge of the financial products they acquire. It has also revived the
interest in the mobilization of deposits due to liquidity problems that has
brought with him. Financial education facilitates the mobilization of savings. A greater
mobilization of the savings of the poor would allow for greater deepening
financial of a country, with the positive effects that this has on development
economic (Levine, 2007). Greater financial inclusion can help reduce
poverty through the accumulation of financial assets. The more scarce
the more resources there are, the greater the need to manage them well and securely.
Association of Private Banks of Ecuador (2011).
4.1.3. Characteristics of Financial Education
4.1.4. Basic Financial Concepts
Financial Products
Financial Assets
Assets
Liabilities
Capital
Expenses
Costs and Margins
Gross margin
Net Income (or Loss)
Cash Flow
Working Capital
Leverage
Return on Investment
Risk Premium
4.1.5. Personal Finance
4.1.6. Characteristics of Personal Finances
4.2. Discussion
4.3. Reference Framework

Currently in the whole world, the interest in financial education and its
education has become one of the main objectives of the programs
state and private. Let's see what happens in representative countries
selected.
 United Kingdom

It has a special agency dedicated to Financial Education called Service.

of Financial Advisory (FSA). The Financial Services Act 2010 included
a provision to establish the Financial Education Organization of
Consumer. The strategy involved the FSA spending nearly 10 million pounds on
year through a plan with seven points. The priority areas that stand out for
direct their efforts were: new parents, schools, adults, youth, tools
electronics and money advice.
United States

A part of the country's financial education efforts is managed to

through a non-profit organization called Jumpstart Coalition. The
The Economic Education Council (CEE) conducted a survey in 2009 in the
states and found that 44 states currently have low financial education
personal. The results of the JumpStart financial education survey
Personal indicate low levels of financial education among young people of the
United States. According to the financial capability survey (National Financial
Capability Study), conducted in the USA by the Self-Regulator of the Industry
Financial Industry Regulatory Authority the generation of Millennials,
they exhibit an alarming number of problems in their behaviors
financial
Spain

The publication PISA 2012 Results: Students and Money. Financial Literacy Skills for
the 21st Century by the (OECD) and the Ministry of Education, Culture and
Sport, the Bank of Spain and the National Securities Market Commission
(CNMV) conducted a study on financial issues on an international scale about the
young people, 18 countries were included, 13 of them from the OECD, within the evaluation
more general education. The understanding of young people from different backgrounds was assessed.
knowledge about financial education, related to financial instruments,
complex or unexplored a series of skills to see to what extent they can
facing financial situations appropriate for their age. One of their
main conclusions is that the level of financial knowledge is still a
long road to travel. Thus, in countries with better results, such as Colombia,
United States and Australia, the young people who claim to have learned to drive their
money stands around 40%. In Spain, the result barely exceeds 20%.
while Italy and China show the lowest results, with 14% and 9%
affirmative response.
 Saudi Arabia

SEDCO Holding conducted a nationwide survey with the participation of a thousand

Saudi youth and the results showed that only 11% follow up on their
expenses; although 75% understood the basic concepts of management
money. A deep analysis of the SEDCO survey revealed that 45%
the youth does not save money at all, while only 20% save a little
10% of their monthly income. Regarding consumption habits, the study
it indicated that elements such as mobile phones and travel spending represent
almost 80% of purchases. Regarding the financing of their lifestyle, 46%
young people depend on their parents to finance their expenses. Fortunately,
90% of respondents stated that they are interested in increasing their
financial knowledge.
South Korea

a survey showed that high school students had a grade

reproachful on this subject, that is, they answered less than 60% of the questions
correctly in tests designed to measure their ability to choose and manage
a credit card, your knowledge about saving and investing for the
retirement, and the awareness of risk and the importance of securing one's assets.
Singapore

The government of Singapore, through the Ministry of Economy, funded the creation
from the Financial Education Institute in 2012. The Institute is managed together
with MoneySENSE (national financial education program) and the Polytechnic of
Singapore. This Institute aims to build financial skills.
basic needs in general in the population of Singapore and particularly in the youth, to
through free financial education programs. From 2012 to 2014, the
The institute has reached more than 24,000 people in Singapore through workshops and
talks.
Colombia

Since 2012, the banking sector, along with the National Government, to increase the
financial education levels in the country has implemented the Program of
Economic and Financial Education for children and young people, which aims to promote the
development of basic and civic competencies, as well as critical reflection for
make responsible financial decisions. However, 'In general terms,
it states that there is illiteracy in topics related to financial education.
Most young people make investment and/or borrowing decisions without
to have clarity on aspects such as internal rate of return, net present value,
cost del money interest flows of box y budget.
[Link]
 Chile

the interpretation of the INJUV survey (2013) indicates that, although part
important young Chileans declare to have debt, around two thirds
admits to being unaware of important financial concepts. Surveys from the Institute
National Youth Institute (INJUV) found that, among Chilean youth aged 18 to 29
In years, up to 37% report having debts; the figure reaches 47% in the age group.
between 25 and 29. Meanwhile, "less than half of those who have had loans to their
the name states that before taking the loan, they explained the payment system to him/her and
to know well the interests and associated expenses of credits (46%).

Argentina

In 2017, VISA launched a financial education site for young people, during 2017.
an average of 2,700,000 new accounts were registered monthly for customers
between 16 and 30 years old. Therefore, the card launched a financial education site for the
young people who have recently entered the banking system. On the other hand, there are communications that are
in line with the policies promoted by the Central Bank of the Argentine Republic
(BCRA) to facilitate everyday economic operations, stimulate education
financial literacy for young people and promote banking inclusion through the use of means
payment electronics.
It is observed that countries in Asia, Europe, and America, the level of financial education
the young population does not have sufficient development and the level of application of
Learning strategies for this broad theme are just at an initial level.
In the countries that made efforts on financial education for young people,
Like Singapore, South Korea, and Saudi Arabia, it is noted that the results do not
are entirely satisfactory, as they did not fully manage to motivate the
young populations to participate in financial education programs.
 Methodological Design

1. Type of Research

According to its Applicability

Applied because it seeks the use of knowledge that it previously obtains.

surveyed.

According to the Level of Knowledge (Scope of Result)

The research will have an exploratory scope. Its objective is to examine the
The theme of financial education for young university students in industrial engineering
of the daytime shift of the National University of Engineering UNI-RUPAP and obtain
information for a more complete investigation to be conducted in the future. During
the literature review found that there are similar researches, but
in other scenarios (Other Countries) therefore the research will begin as
exploratory.

According to the Researcher Strategy

Field Research. It will focus on conducting the study where the phenomenon occurs.
In a natural way, this seeks to achieve the situation as realistically as possible.
possible.

According to the Amplitude

The research will have a transversal scope, it will be conducted over a period
of time that encompasses the first half of the year 2019.

2. Research Method

The method used is the inductive logical method since the conclusions will be
extracted from the study of all the elements that are part of the object of
research, but also of which not all can be studied in their
totality involves taking representative samples, which will allow for
generalizations. It will also be divided into:
 Observation: The phenomenon will be observed and an explanation will be sought.
regarding him.
Hypothesis: A research is proposed, which may be the answer to
fact that the phenomenon occurs.

Experimentation: A verification of the hypothesis is carried out with several

different cases that lead to the same result.

Conclusion: If the hypothesis works for several cases, then it works

for everyone.

3. Study area

The place where the research took place was at National University of
Engineering, Pedro Arauz Palacios Campus, located on the south side of Villa
Progress.

Universe

Our universe will be made up of the engineering students.

industrial of the daytime shift, of the university campus Pedro Arauz Palacio, located in
Managua.
Sample
The sample is, in essence, a subgroup of the population. In reality, rarely
It is possible to measure the entire population, so we obtain or select one.
shows and, of course, it is intended that this subset be a faithful reflection of
set of the population. In this case, it was chosen to work with the sample
probabilistic since all elements of the population have the same
possibility of being chosen for the sample and is obtained by defining the
characteristics of the population and the sample size, and through a
random mechanical selection of the sampling/analysis units, in order to
determine a representative sample for the surveys of all students
of the daytime industrial engineering program.

For the determination of sample size, based on the sampling technique

simple random, the following formula was taken into account:
 2∗ ∗ ∗
=
− 1∗ +2 ∗2 ∗

Where

n = sample number

Z = level of confidence.

N = population or universe

E = maximum tolerable error

p = probability of success

probability of failure

5. Techniques and Instruments for Data Collection

Data collection refers to the process of obtaining empirical information.

that allows the measurement of the variables in the units of analysis, in order to obtain
the necessary data for the study of the problem or aspect of social reality
reason for research. According to J. Galtung, data collection refers to
data matrix filling process (Op. Cit. Pg. 105)
Currently in scientific research there is a great variety of techniques or
tools for data collection in fieldwork of a
certain research. According to the method and type of research to
to carry out, either one technique or another is used.

According to J. Galtung, quantitative research generally uses the following

instruments and techniques for data collection.
The Questionnaire
Survey
The Interview
Content Analysis
La Observación
The instrument to be applied will be the Survey since it is a technique of
data collection that leads to establishing contact with the units of
observation (students), through the previously established questionnaires
to obtain information about people (public opinion and current values)
of the same ones).
 6. How Will the Information Be Processed?

It consists of processing the data (scattered, disorganized, individual) obtained.

of the study population during the fieldwork, and is intended to
generate result (grouped and ordered data), from which will be made
the analysis according to the research hypothesis objectives.
Statistical tools must be mentioned in data processing.
to be used.
As Hernández (2003) mentions, one must decide what type of data analysis to perform.
will be carried out: quantitative, qualitative or mixed.
Since in our case the chosen analysis is of a qualitative nature
we will process the information through a qualitative analysis.
The collection and analysis of data: Considering that there is no desire to measure
variables to carry out inferences and statistical analyses but rather
try to obtain data which will be converted into information about people, beings
live, communities, situations or in-depth processes.
7. Research execution plan
Our execution plan will focus on data collection applying
the survey technique processing the obtained data according to the information
that is held of university students during a period of time that includes the
first half of the year 2019.
 Annexes

Survey on Financial Education for Engineering University Students

Industrial of the daytime shift.

OBJECTIVE: To carry out a diagnosis on socioeconomic characteristics, level

of financial education, level of financial planning and supervision, aspects
outstanding features of financial products and services and a categorization of them
behavioral finance of the daytime students of Industrial Engineering.

I. Socioeconomic Characteristics of Young People

1. Sexo: Masculino Female
2. Edad (en años) _______________
3. Origin______________________
4. Estado Civil: 1. Casado Single Divorced 4. Widower
5. Tienes Hijos: 1. Sí 2. No
How many children do you have? __________.
7. What neighborhood do you live in? (Specify if it's outside of Managua)

___________________________________________________________.
8. Who do you currently live with? 1. Parents2. Relatives 3. Residence
from the University 4. Friendships 5. Couple 6. Alone
9. Besides studying, do you have any additional occupation? 1. No
Yes
10.¿Cuál es esa ocupación? 1. Empleado Público Private Employee
3. Self-employed worker 4. Another Occupation
11. What is the source of your income? 1. Financial support from your parents
2. Financial support from family members 3. Own Income 4. Another source
of Revenues
12. What range does your monthly income fall into? (in Córdobas) 1. 500-
1,000 2. 1,000-1,500 1,500-2,000 2,000-2,500 More
of 2,500
13.¿Cuánto gastas mensualmente? (en córdobas) 1. 500-1,000 2. 1,000-
1,500 3. 1,500-2,000 4. 2,000-2,500 5. Más de 2,500
14.¿Cuál es la desagregación porcentual de tus gastos? [Link]ón_______%
2. Alimentación_______% 3. Recreación________% 4. Alquiler_______% 5.
Transporte______% 6. Vestimenta________% 7. Otros_______%
15.¿Mensualmente tiene un excedente? 1. Sí 2. No
16. If you have a surplus, what do you do with that amount? 1. Save it in an account in

the bank Invest 3. Travel 4. Makes various expenses

II. Financial Literacy Level

17. Do you think that having knowledge about finances is? Very
["Necessary 2.","Necessary 3.","Slightly Necessary"] They are not necessary
18. The knowledge about finances of my family is? 1. High 2. Medium
3. Low
19. Is my friends' knowledge about finances? 1. High 2. Medium
3. Low
[Link] I consider my personal knowledge about finance to be? 1. High
2. Medium 3. Low
21. Do you know for sure what the components of the Financial System are?
Nicaraguan?
Yes No
22. Do you know what financial products and services are currently offered by the
banks?
Yes, totally 2. Yes, partially 3. No
23. How do you assess your knowledge about the different types of interests?
High 2. Medium 3. Low
24. Are you aware of the features of the Pension Law?
Yes, totally 2. Yes, partially No
25. Do you know the following concepts?
Investment Yes, totally 2. Yes, partially 3. No
Credit Yes, totally Yes, partially 3. No
Interests Yes, totally Yes, partially No
 Remittance Yes, totally 2. Yes, partially No
-Seguro Yes, totally 2. Yes, partially 3. No
Debt Yes, totally Yes, partially No
Cash Flow Yes, totally 2. Yes, partially 3. No
26. Do you know the current orientation and actions of exchange rate policy in
Nicaragua?
Yes, totally 2. Yes, partially 3. No

III. Financial Planning and Supervision

27. Do you have short to medium-term financial goals? 1. Yes 2. No
28.¿Controlas tus gastos? 1. Sí 2. No
29.¿Sabes cómo estructurar un presupuesto? 1. Sí 2. No
30. If you create a budget, do you apply and follow up on it?
Always Frequently 3. Rarely Never
31. Do you exceed your expenses?
Always Frequently 3. Few times 4. Never
32. Is there a possibility that your income is greater than your expenses?
Always Frequently 3. Rarely 4. Never
33. Do you track your expenses?
Yes 2. No
34. What is the purpose for which you save?
To acquire something that interests me (consumer goods)
No savings 3. Travel 4. Unforeseen events
5. Other (please specify)___________________

IV. Financial Products and Services

35. Are you currently a client of the financial system? 1. Yes No
36. Do you have a debit card at that institution? 1. Yes 2. No
37. Do you have a credit card at that institution? 1. Yes No
38. Have you ever applied for a loan in that institution or in any other?
Yes 2. No
39.¿Qué productos o servicios financieros quisieras tener?
Credit card 2. Debit card 3. Savings Bank
4. Current account 5. Other (please specify)___________________
40. Which institution do you think should apply an Education strategy and
Financial culture, so that young people can elevate their knowledge to this level?
Through high school 2. University 3. Institution
banking finance 4. Non-banking financial institution 5. Other

V. Behavioral Finance
41. Do you think that your gender, marital status, age, and level of education affect
in your financial decisions? 1. Yes No
42. Do you think that your emotions (fear, ambition, etc.) affect your
decisiones financieras? Si 2. No
43. Do you think that most people make financial decisions of
way...? 1. Rational 2. Irrational
44. Do you think that your social and economic condition affects your decisions?
financieras? 1. Sí 2. No
45. What are the psychological aspects of a person before they make a decision?
financial decision, are they something…?

Very important 2. Important 3. A little important 4. Nothing

important
46. The social aspects of a person before they make a decision
financial, are something…?
Very important 2. Important 3. Slightly Important 4. Nothing

important
THANK YOU FOR YOUR COLLABORATION!
 BIBLIOGRAPHY

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