Peer influence, personality traits, and financial literacy as predictors of Saudi students’ spending behaviour

This study aims to examine the relationship between peer influence, personality traits, financial literacy, and spending behavior among 279 students from the College of Business Administration in Saudi Arabia. Using a combination of purposive and simple random sampling techniques, data were collected and analyzed through SPSS and Partial Least Squares Structural Equation Modeling (PLS-SEM). The results reveal that personality traits have a significant influence on financial literacy (β = 0.144, p < 0.01), while peer influence shows a positive but non-significant effect (β = 0.109, p = 0.157). Personality traits, peer influence, and financial literacy all had significant positive impacts on spending behavior (β = 0.530, 0.185, and 0.128, p < 0.05), respectively. Furthermore, financial literacy mediates the relationship between personality traits and spending behavior (β = 0.076, p < 0.05), but not between peer influence and spending behavior. These findings clarify the mediating role of financial literacy in shaping students’ financial habits and decision-making. Practically, the findings highlight the need for universities to strengthen financial literacy programs, as these initiatives can enhance students’ financial competence and foster more responsible spending behavior.