Financial literacy has become on focus of many research studies. Evidences have shown that financial literacy is beneficial for individuals, families and the community as it increases efficiency and financial wellness, improve the quality of living and makes the society more financially active. In addition, it is widely known that university student constitutes one of the most key segment of population. During this period, most students start to become financially independent and take financial responsibility. Studies undertaken in developed and developing countries have demonstrated that university students do not manage wisely their personal finance. One of the main factors found to influence their financial literacy is parental income. The purpose of this study is to explore the importance of students' financial literacy and whether there is any linkage between parental income and students' financial literacy. The main objectives of this research are: i) firstly, to review the existing literature regarding different definitions of financial literacy and its benefits. ii) secondly, to evaluate how financially literate are Albanian university students; ii) thirdly, to examine whether financial literacy differs based on the level of students' parental income; and iii) finally, to draw some conclusions and recommendations to improve student's financial literacy. An instrument comprised of personal finance and personal characteristics is administered to 637 students in Albania. The One Way Welch ANOVA and multiple comparison technique are utilized to analyze the data. The results indicate that student's financial literacy is influenced by their family income.