This work examines the influence of financial knowledge and parental financial literacy on undergraduates’ self-perceived financial knowledge, focusing on the manifestations of overconfidence and underconfidence. In this regard, overconfidence occurs when students believe they know more than they actually do, while underconfidence refers to the tendency to underestimate their own level of knowledge. Research into confidence in financial knowledge is fundamental to understanding how students address financial decisions, which have long-term implications for their economic well-being.

The empirical analysis is based on a sample of 568 undergraduates from different Spanish public universities and uses discrete choice econometric models to assess the probability of overconfidence and underconfidence as a function of the levels of both financial knowledge and parental financial literacy. The results show that higher levels of financial knowledge among students reduce overconfidence but increase underconfidence. This finding suggests that students who are more financially literate are more aware of their own limitations, leading to greater modesty in the self-assessment of their abilities. However, the level of parental financial knowledge has the opposite effect, reducing underconfidence but increasing overconfidence. This phenomenon may be due to students internalising the confidence they perceive in their parents, which in turn, provokes an overestimation of their own financial knowledge.

These results extend the current literature on the role of personal and parental financial knowledge and literacy, respectively, in shaping financial attitudes and behaviour. Furthermore, these findings highlight the influence that the levels of both young people’s own financial knowledge and parental financial literacy may have on their self-perceptions. These findings also suggest that financial education programmes should focus not only on transmitting knowledge, but also on helping students to develop realistic perceptions of their capabilities. Additionally, the results point to the importance of involving families in the financial education process, as parental financial literacy may directly influence undergraduates' perceptions of their own knowledge.

In conclusion, this paper highlights the importance of considering both personal financial knowledge and family financial literacy when analysing confidence in financial competencies. The results provide valuable theoretical and practical contributions for the design of more effective educational interventions aimed at improving not only financial knowledge, but also accurate self-perceptions of financial capabilities among undergraduates.

Keywords: Financial knowledge, parental financial literacy, Self-perception (of financial capabilities).