Does Mental Accounting Play an Important Role in Young Entrepreneurs? Studies on Entrepreneurship Education

Abstract

The purpose of this study was to examine the role of mental accounting, financial attitude, and financial selfefficacy on financial behavior. Furthermore, this study examines the effect of financial knowledge on mental accounting, financial attitude, and financial self-efficacy. This study uses 400 student respondents who have businesses. Data analysis using PLS. The results show that financial behavior is influenced by mental accounting, financial attitude, and financial self-efficacy. However, financial knowledge did not increase mental accounting and financial self-efficacy. This study proves that mental accounting is very important for student success in business. Mental accounting controls the mindset of young entrepreneurs in managing finances so that they have a positive financial attitude, good financial self-efficacy, and effective financial behavior. From this study, we believe that mental accounting plays an important role for young entrepreneurs in financial decision-making. However, financial knowledge does not necessarily influence the mental accounting mindset.