Financial Education is not Enough: Millennials May Need Financial Capability to Demonstrate Healthier Financial Behaviors

2015 ◽  
Vol 37 (4) ◽  
pp. 649-671 ◽  
Author(s):  
Terri Friedline ◽  
Stacia West
Keyword(s):  
Financial Education ◽  
Financial Capability ◽  
Financial Behaviors

scholarly journals Financial Prudence through Financial Education: A Conceptual Framework for Financial Inclusion

2018 ◽  
Vol 31 (1) ◽  
pp. 151-166
Author(s):  
Laily Dwi Arsyianti Laily Dwi Arsyianti
Keyword(s):  
Conceptual Framework ◽  
Production Function ◽  
Low Income ◽  
Financial Education ◽  
Income Group ◽  
Financial Inclusion ◽  
Social Production ◽  
Financial Behaviors ◽  
The Government ◽  
Low Income Households

This paper aims to develop a framework to improve financial prudence through financial education and financial inclusion for low-income households in Indonesia. Knowledge shapes attitude, which later influences behavior. A household, in terms of its social production function, needs to feel secure financially in order not to fall into insolvency or bankruptcy. Households that are equipped with better financial education and knowledge are more likely to undertake recommended financial behaviors. By targeting the low-income group through a financial inclusion agenda, the government, Islamic social finance practitioners, and academicians enable low-income households to act with financial prudence.

Conclusion

2021 ◽  
pp. 109-128
Author(s):  
Rajiv Prabhakar
Keyword(s):  
Young People ◽  
Everyday Life ◽  
Financial Education ◽  
Financial Inclusion ◽  
Financial Capability ◽  
The Everyday ◽  
The Way

This concluding chapter reflects on some of the things that critics of financial inclusion might learn from its supporters. As many critics of financial inclusion are already engaging with policy topics at some level, they might benefit from a deeper engagement with policy detail. This might pave the way for more detailed criticisms. The chapter then uses the example of the financial education of young people to highlight the varying nature of policy, which might also inform theoretical discussions of the everyday life of finance. Indeed, financial education is important in building financial capability. Finally, the chapter suggests some possible further areas of research that build upon some of the arguments contained in this book.

scholarly journals The Assessment of Financial Literacy: New Evidence from Europe

2019 ◽  
Vol 7 (3) ◽  
pp. 54 ◽  
Author(s):  
Nicolini ◽  
Haupt
Keyword(s):  
Financial Literacy ◽  
Selection Process ◽  
Financial Education ◽  
Assessment Tools ◽  
Financial Behaviors ◽  
Financial Decisions ◽  
The Uk ◽  
New Evidence ◽  
The Relationship ◽  
Literacy Research

The hypothesis that people with more financial literacy make better financial decisions and show positive financial behaviors is crucial for more than one stakeholder. A weak connection between financial literacy and financial behaviors jeopardizes the opportunity to invest in financial education and to develop a consumer protection framework based on the chance to develop aware and responsible financial consumers. This study uses data from different countries (Germany, France, Italy, Sweden, the UK), using surveys devised and fielded specifically to measure financial literacy and in order to assess if the availability of a broad set of items on financial literacy allows to develop new measures of financial literacy to better understand the relationship between financial literacy and financial behaviors. The well-established Lusardi–Mitchell questions are compared with measures that differ in terms of number of items (the “50-items” index), range of topics (the “5-specific” index), or selection process of the items (the “unbiased” index). Results support the hypothesis that the Lusardi–Mitchell questions remain a good measure in a first-step analysis, but a deeper understanding of the connection between financial literacy and financial behaviors benefits from the measures proposed in the study, that should be considered as additional assessment tools in financial literacy research.

Enhancing Links between Research and Practice to Improve Consumer Financial Education and Well-Being

2015 ◽  
Vol 26 (1) ◽  
pp. 94-101 ◽  
Author(s):  
Billy J. Hensley
Keyword(s):  
Financial Literacy ◽  
Meta Analysis ◽  
Financial Education ◽  
Well Being ◽  
Collective Impact ◽  
Research Protocol ◽  
Education Programs ◽  
Financial Behaviors ◽  
Research And Practice ◽  
Influence Behavior

A recent meta-analysis of the effect of financial literacy and financial education on downstream financial behaviors has shown a weak collective impact of the work of financial education. While the findings are not stellar, they do not support a dismantling of financial education programs and funding. This paper examines the findings of the meta-analysis and discusses the implications for the field. In this discussion, a more thoughtful consideration of the ways to provide financial education and the manner about how to influence behavior is highlighted. In addition, this article proposes a systematic examination of why timely educational approaches should coexist with longer-term financial education programming. The field also needs a more rigorous examination of factors that impact intervention effectiveness, including a call for improved research protocol and evaluation and a plea for greater visibility between researchers and practitioners.

Financial education and financial satisfaction

2017 ◽  
Vol 35 (5) ◽  
pp. 805-817 ◽  
Author(s):  
Jing Jian Xiao ◽  
Nilton Porto
Keyword(s):  
Financial Literacy ◽  
Financial Education ◽  
Well Being ◽  
Financial Behavior ◽  
Future Research ◽  
Financial Satisfaction ◽  
Financial Capability ◽  
Data Set ◽  
Content Type ◽  
Mediating Factors

Purpose The purpose of this paper is to investigate roles of financial literacy, financial behavior, and financial capability as mediating factors between financial education and financial satisfaction. Design/methodology/approach Data are from the 2012 National Financial Capability Study, a large national data set with detailed information on financial satisfaction, education, literacy, behavior, capability, and related variables. Mediation analyses are used to answer research questions. Findings Financial education may affect financial satisfaction, a subjective measure of financial well-being, through financial literacy, financial behavior, and financial capability variables. Results show that subjective financial literacy, desirable financial behavior and a financial capability index (a sum of Z-scores of objective financial literacy, subjective financial literacy, desirable financial behavior, and perceived financial capability) are strong mediators between financial education and financial satisfaction. Research limitations/implications The study has used cross sectional data that can only document associations between financial education and satisfaction and the mediators between them. Future research could use relevant longitudinal data to verify multiple benefits of financial education. Practical implications The findings have implications for financial service professionals to take advantages of multiple benefits of financial education in content acquisition, confidence in knowledge and ability, and action taking when they communicate with their clients. Social implications Policy makers on consumer financial education may use the information to advocate and promote effective education programs to improve consumer financial well-being. Originality/value This study is the first of this kind to examine the association between financial education and financial satisfaction and several financial capability variables as mediating factors.

scholarly journals Education, Financial Knowledge and Consumer Confidence in Financial Goals: Evidence from the 2018 US National Financial Capability Study

2020 ◽  
pp. 9-21
Author(s):  
Fuzhong Chen ◽  
Ziteng Han ◽  
Qingyang Ma
Keyword(s):  
Higher Education ◽  
Financial Support ◽  
Financial Education ◽  
Financial Knowledge ◽  
Consumer Confidence ◽  
Education Programs ◽  
Financial Capability ◽  
Ordered Logistic Regression ◽  
Education Levels ◽  
Robustness Check

Consumer confidence in financial goals is the degree of trust expressed by consumers through the activities of setting financial goals and subsequent realization. Utilizing data from the 2018 US National Financial Capability Study, in terms of the data characteristics of the dependent variable, this study utilizes the method of ordered logistic regression to explore the roles of education and financial knowledge in consumer confidence in financial goals. Moreover, this study also performs a robustness check, which suggests unchanged results. The results indicate that both education and financial knowledge positively contribute to consumer confidence in financial goals and consumers both with higher education levels and financial knowledge will be more confident in financial goals. Thus, policymakers are recommended to provide financial support for education and focus on mechanisms of improving financial knowledge through financial education programs and financial related courses.

scholarly journals Consumer Financial Knowledge and Retirement Planning Behaviors

2021 ◽  
pp. 109-123
Author(s):  
Fuzhong Chen ◽  
Zijun Sun
Keyword(s):  
Population Aging ◽  
Financial Education ◽  
The Elderly ◽  
Retirement Planning ◽  
Financial Knowledge ◽  
Education Programs ◽  
Financial Capability ◽  
Retirement Accounts ◽  
The World ◽  
High Level

With the increasingly serious problem of population aging around the world, the issue of consumer retirement planning behaviors has been highlighted in recent years. The purpose of this study is to investigate the effect of consumer financial knowledge on retirement planning behaviors. Utilizing the data from the National Financial Capability Study in 2009, 2012, 2015, and 2018, this study measures consumer retirement planning behavior through the variables of whether consumers have retirement accounts and whether they regularly contribute to their retirement account. To verify the robustness, a series of additional regressions are conducted by replacing the estimation approach and dropping income outliers. The results imply that consumers with a high level of financial knowledge tend to perform desirable retirement behaviors. Based on the results, we recommend that financial education programs should be widely introduced and targeted at those who lack financial knowledge, such as the elderly and the under-educated, to stimulate consumers to improve their retirement planning behaviors.

Combining Adult Education and Professional Development Best Practice to Improve Financial Education Teacher Training

2017 ◽  
Vol 28 (1) ◽  
pp. 33-48 ◽  
Author(s):  
Billy J. Hensley ◽  
Jesse B. Jurgenson ◽  
Lisa-Anne Ferris
Keyword(s):  
Professional Development ◽  
Adult Education ◽  
Financial Literacy ◽  
Best Practice ◽  
Development Program ◽  
Financial Education ◽  
Financial Behaviors ◽  
Personal Finances ◽  
Teacher Professional ◽  
Financial Decision

Financial education is an important area of study due in part to the need for improved understanding of how to navigate an ever more complex financial decision-making environment, thus the need for effective classroom instruction. The purpose of this study is to examine a “teacher-as-learner” professional development program that is rooted in both professional development and adult education fields of study as means of providing financial education. This program educates teachers on their own personal finance, ultimately better preparing educators to teach financial literacy education. Results showed significant improvements in self-reported financial behaviors between pre- and posttests. Results suggest using contextual learning for teacher professional development because it benefits personal finances and successful teaching practices.

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