Seeking Financial Advice and Other Desirable Financial Behaviors

2018 ◽  
Vol 29 (2) ◽  
pp. 198-207 ◽  
Author(s):  
Keith A. Moreland
Keyword(s):  
Well Being ◽  
Study Data ◽  
Financial Knowledge ◽  
Financial Behaviors ◽  
Financial Advice ◽  
Financial Decision Making ◽  
Potential Source ◽  
Relevant Variables ◽  
Financial Decision ◽  
Two Measures

Advice from financial counselors is one potential source for improving financial behaviors and well-being among clients and within their communities. This study examined whether obtaining financial advice is associated with other personal financial behaviors. Analysis of National Financial Capability Study data showed that obtaining advice is positively associated with financial behaviors while controlling for other relevant variables, including two measures of financial knowledge. The results also indicated greater benefits from obtaining advice for those with less financial knowledge. The findings suggest that efforts by financial counselors to provide financial advice to clients and others through service activities can improve financial decision-making in their communities including by those who can benefit the most.

Introduction

2017 ◽  
Author(s):  
Brett Hammond ◽  
Olivia S. Mitchell ◽  
Stephen P. Utkus
Keyword(s):  
Decision Making ◽  
Cognitive Deficits ◽  
The Elderly ◽  
Older Population ◽  
Older Americans ◽  
Financial Advice ◽  
Financial Decision Making ◽  
Financial Decision

By the end of the next decade, the number of older Americans will have grown rapidly, but half if not more of the elderly will suffer from cognitive deficits after the age of 80. This volume explores how financial decision making changes at older ages, how and when financial advice can be useful for the older population, and what solutions and opportunities are needed to resolve the likely problems that will arise.

scholarly journals Why Do Financial Literacy Programmes Fail?

2013 ◽  
Vol 2 (1) ◽  
pp. 18
Author(s):  
Bart Frijns ◽  
Aaron Gilbert ◽  
Alireza Tourani-Rad
Keyword(s):  
Decision Making ◽  
Causal Relationship ◽  
Financial Literacy ◽  
Positive Relationship ◽  
Financial Knowledge ◽  
Financial Decision Making ◽  
Financial Decision

Numerous studies have found a positive relationship between financial literacy andfinancial experience. Typically, this relationship is interpreted as being a causal relationship,i.e. an increase in financial literacy leads to better financial decision making. However, asimple relationship cannot be interpreted in a causal way. In this paper, we show evidencefor a causal relationship running the opposite way, i.e. people with more financial experienceseem to acquire more financial knowledge and become more financially literate. Thisfinding has important implications as it suggests that programmes targeted at improvingfinancial literacy could be more effective if they incorporate experiential components.

Skills and household financial decision-making in Indonesia

2020 ◽  
Vol 47 (11) ◽  
pp. 1433-1450
Author(s):  
Arief Wibisono Lubis
Keyword(s):  
Decision Making ◽  
Cognitive Ability ◽  
Financial Literacy ◽  
Well Being ◽  
Microfinance Institutions ◽  
Content Type ◽  
Household Decision ◽  
Financial Decision Making ◽  
Household Decision Making ◽  
Financial Decision

PurposeThis study examines whether financial literacy is a relevant factor that determines authority in household financial decision-making, an area that is often viewed as boring, difficult and full of uncertainties. Cognitive ability and personality traits are also included as additional explanatory variables.Design/methodology/approachThe logistic regression technique was applied using a sample of more than 2,300 microfinance institutions' clients in three provinces in Indonesia.FindingsThis study finds that financial literacy correlates positively with authority in household financial decision-making only among men. This does not mean that financial literacy is irrelevant for women's agency, since the skill might be important for authorities in other decision-making areas, including those outside households. Meanwhile, the relationship between cognitive ability and household financial decision-making authority is more universal.Research limitations/implicationsThis study does not collect information on the levels of financial literacy of other household members and does not capture respondents' perceptions of household financial decision-making.Social implicationsThe overall low level of financial literacy calls for the need for more targeted efforts to address this issue by policymakers. Education policy should also be designed to improve cognitive ability, as this ability is important for human agency and well-being.Originality/valueHousehold decision-making has received significant attention in the literature. Authority in household decision-making is important because it represents a person's agency and has a profound impact on well-being. To the best of author's knowledge, studies on the importance of skills in household financial decision-making are very limited.

PENGARUH FINANCIAL ATTITUDE DAN FINANCIAL KNOWLEDGE TERHADAP KEPUTUSAN KEUANGAN PADA PEMILIK USAHA KECIL DAN MENENGAH (UKM) DI PULAU LOMBOK: SUATU PERSPEKTIF BEHAVIORAL FINANCE

2020 ◽  
Vol 6 (2) ◽  
pp. 166-178
Author(s):  
Siti Aisyah Hidayati ◽  
Sri Wahyulina ◽  
Embun Suryani
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Financial Management ◽  
Sampling Technique ◽  
Provincial Government ◽  
Financial Knowledge ◽  
Financial Attitudes ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision

This study aims to analyze the effect of Financial Attitude and Financial Knowledge on financial decisions on Small and Medium Business Owners (UKM) on Lombok Island. The theoretical contribution of this research is expected to contribute to science and the development of behavioral finance theories related to financial decision making in Small and Medium Enterprises (SMEs). It is also expected that behavioral finance will be the subject of financial management courses. Furthermore, the practical contribution of this research is expected to provide input, suggestions and recommendations to the policy maker of the NTB Provincial Government in making policies related to the development of SMEs. This research is a quantitative approach based research, with the type of explanatory research. The study population is all SMEs in the island of Lombok. The sampling technique is done by using Non probability sampling, which uses judgment sampling, which is choosing SMEs that are engaged in the pottery industry and have already exported. From the existing population, there are 35 (thirty-five) SMEs that can be taken as samples. Respondents in this study are the owners of each of these UKM. Data collection techniques used in this study were using a questionnaire. To achieve research objectives and hypothesis testing, the data obtained will be processed according to needs using GSCA (Generalized Structured Component Analysis) statistical tools.The results showed that Financial Attitudes had a positive and significant effect on financial decision making by SME owners and owners. This means that the better the Financial Attitudes owned by SME owners, the bolder they are in making financial decisions. Financial Knowledge has a positive and significant impact on financial decision making by SME owners and owners. This means that the better the Financial Knowledge possessed by SME owners, the bolder the financial decisions will be

Financial Knowledge, Confidence, Credit Use, and Financial Satisfaction

2019 ◽  
Vol 30 (2) ◽  
pp. 175-190 ◽  
Author(s):  
Stephen A. Atlas ◽  
Jialing Lu ◽  
P. Dorin Micu ◽  
Nilton Porto
Keyword(s):  
Credit Card ◽  
Well Being ◽  
Financial Knowledge ◽  
Strong Interactions ◽  
Financial Satisfaction ◽  
Financial Behaviors ◽  
Subjective Knowledge ◽  
Subjective Financial Knowledge ◽  
The Right ◽  
Credit Card Use

This article investigates associations between confidence about financial knowledge and two outcome variables, financial behaviors and financial satisfaction. On one hand, subjective financial knowledge (confidence) is necessary to make proactive decisions, yet overconfidence has been associated with a range of negative financial behaviors and outcomes. Both types of objective and subjective knowledge may be related to critical financial behaviors and choices such as credit card usage which in turn may be associated with financial satisfaction, an important component of consumer well-being. This article analyzes data from the 2015 National Financial Capability Study to examine how financial knowledge confidence relates to credit card behaviors and financial satisfaction. We use mediation and floodlight analyses to uncover relevant relationships between variables of interest. We find evidence that confidence is associated with healthy credit card use that contributes to financial satisfaction. We also observe strong interactions with knowledge to find that confidence is more strongly associated with credit card use and overall financial satisfaction as knowledge increases. Findings from this study can help financial educators and advisors to deliver the right mix of financial knowledge to better financial choices and behaviors.

scholarly journals Financial Capability in Ethiopia: A Case Study of Addis Ababa City

2020 ◽  
Vol 10 (3) ◽  
pp. 245
Author(s):  
Miheretu Kebede Lemu
Keyword(s):  
Decision Making ◽  
Financial Services ◽  
Addis Ababa ◽  
Financial Knowledge ◽  
Financial Behavior ◽  
Financial Contracts ◽  
Financial Capability ◽  
Financial Decision Making ◽  
Financial Decision

This study investigates financial knowledge, behavior and attitude of individuals to gauge how the financial market evaluates an individual's financial capability and financial decision making. Higher financial knowledge increases the entry into sophisticated financial contracts and the understanding of contemporary featured new financial products as well as good financial decision making. Financial behavior also enhances the financial decision making of those individuals as well as the relationship between individuals and their behavior towards saving, investment, cash and credit. These effects are intensified by individuals' financial behavior, the level of relationship with investments, savings and the use of credit. This study found out that a deeper acquaintance of individuals on financial knowledge, attitude and behaviour results in positive consequences on their relations with financial services providers and in turn promotes to financial capability.

Integrating affect, cognition, and culture in Hispanic financial planning

2018 ◽  
Vol 36 (4) ◽  
pp. 726-743 ◽  
Author(s):  
Suri Weisfeld-Spolter ◽  
Fiona Sussan ◽  
Cindy Rippé ◽  
Stephen Gould
Keyword(s):  
Decision Making ◽  
Cultural Values ◽  
Financial Planning ◽  
Financial Knowledge ◽  
Cultural Value ◽  
Equation Modeling ◽  
Data Set ◽  
Content Type ◽  
Financial Decision Making ◽  
Financial Decision

PurposeDebt is at a peak and consumers purport needing help with financial planning. To better understand the antecedents of financial planning behavior, the purpose of this paper is to examine the importance of cultural values in financial decision making within the context of Hispanic American consumers. A new conceptual model is proposed to integrate affect (cultural value) and cognition (financial knowledge) in financial planning.Design/methodology/approachTo uncover respondents’ views on cultural values, financial knowledge, financial attitude, and financial planning behavior, an online survey hosted on a business school’s website was distributed to members of two Hispanic Chambers of Commerce. The survey consisted of five parts, and took each respondent an average of 15 minutes to complete. The final data set has 158 observations.FindingsResults analyzed using structural equation modeling confirmed the hypotheses that financial knowledge, attitude, and perceived control simultaneously influence Hispanic consumers’ intentions to purchase financial planning products or services. More interestingly, these results confirm that multiple different routes coexist in the decision-making process, especially within the Hispanic financial planning context.Originality/valueKey contributions of this paper include the conceptualization of cultural value as an antecedent to Hispanic financial behavior; detailing the different routes to financial decision making for US Hispanic consumers; and informing financial service managers on marketing strategies toward Hispanic consumers.

Australian women with good financial knowledge fare better in divorce

2021 ◽  
pp. 031289622110220
Author(s):  
Tracey West ◽  
Elizabeth Mitchell
Keyword(s):  
Financial Literacy ◽  
Positive Impact ◽  
Financial Education ◽  
Jel Classification ◽  
Financial Knowledge ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision

Divorce dissolves couple households, who likely specialised in household financial decision-making tasks, into singles who need to learn new skills. Financial decisions will be particularly challenging for those newly separated people that are lacking knowledge and confidence. Given the substantive literature supporting the lack of financial knowledge of women in comparison to men, women are likely to be more disadvantaged by this aspect of divorce. We employ the HILDA Survey and find support for the role of financial literacy in improving wealth outcomes in divorce, particularly for women. We find that the positive impact is significant over the long term. This research contributes to knowledge of the role of financial education in building resilience to endure financial shocks. JEL classification: D14; G53; G50; J12; J16

scholarly journals The role of financial literacy and advice in financial decision making

2019 ◽  
Vol 20 (1) ◽  
pp. 388-413
Author(s):  
M Reyers
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Financial Advice ◽  
South Africans ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Low Levels ◽  
Key Questions

Financial decision making is complex and individuals either need to have the financial knowledge to make the correct decisions, or they need to ask for advice from experts. However, there are two key questions pertaining to financial advice. Firstly, do financially unsophisticated individuals know that they need advice, and do they therefore ask for assistance? Secondly, if they do ask for advice, are financially unsophisticated individuals able to assess the quality of the advice received? A growing body of research is focused on determining to what extent financial advice can act as a substitute for low levels of financial literacy. To date, studies have found conflicting results. This study used data from a national survey of South Africans to determine whether advice could substitute for low levels of financial sophistication. Additionally, the quality of advice in preretirement cash-out decisions was assessed using survey data collected at a university. The results indicate that professional financial advice complements financial literacy, while advice from other sources could substitute for low levels of financial sophistication. Furthermore, the study found that with respect to pre-retirement cash-out decisions, financially unsophisticated individuals followed advice from human resources departments or fund administrators and received quality advice.

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