The likely influence of financial literacy on financial behaviors

2021 ◽  
pp. 153-170
Author(s):  
William B. Walstad ◽  
Sam Allgood
Keyword(s):  
Financial Literacy ◽  
Financial Behaviors

Factors Affecting Financial Literacy of Vietnamese Adults: A Case Study for Hanoi and Nghe An

2017 ◽  
Vol 33 (2) ◽  
Author(s):  
Tue Nguyen Dang
Keyword(s):  
Higher Education ◽  
Multiple Regression ◽  
Financial Literacy ◽  
Urban Areas ◽  
Logistic Models ◽  
Factors Affecting ◽  
Financial Behaviors ◽  
Financial Decisions ◽  
Literacy Level

This research examines the factors affecting the financial literacy of Vietnamese adults. Using a sample of 266 observations of adults in 2 big cities in Vietnam (Hanoi and Vinh in Nghe An Province), the author evaluates the literacy level of adults in these urban areas. The financial literacy of the interviewed people is low. The multiple regression results show that lower financial literacy levels associate with higher age and married status and higher financial literacy levels associate with higher education, more family members, the person making financial decisions and the person attending a useful financial course. This research also explores the association between financial literacy and financial behaviors of individuals employing logistic models. It is found that higher financial literacy associates with less probability of overspending and higher probability of saving money and careful spending. Higher financial literacy is also found to associate with higher probability of opening a savings account and making various investments. 

Struggling to make ends meet: can consumer financial behaviors improve?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lisa K. Meneau ◽  
Janakiraman Moorthy
Keyword(s):  
Financial Literacy ◽  
Financial Management ◽  
Group Analysis ◽  
Self Control ◽  
Thinking Styles ◽  
Financial Health ◽  
Content Type ◽  
Financial Behaviors ◽  
Financial Products ◽  
The Impact

PurposeThe purpose of the study is to examine the following two research objectives. The first was to examine the predictive relationships that consumer characteristics of financial literacy, thinking styles and self-control have with a consumer's financial behaviors. The second goal was to ascertain financial management products' ability to aid those consumers who need it the most by weakening the predictive effects of consumer traits on financial behaviors.Design/methodology/approachThe study employed a web-based survey to gather information. The measurement and structural models were analyzed using generalized structured component analysis (GSCA), a component-based structural equation model. The mediation effect of self-control is assessed using the GSCA. The conditional mediation of demographic variables and use of personal financial management products are evaluated using multi-group analysis (MGA) in GSCA.FindingsAntecedents, financial literacy, thinking styles and self-control consumer characteristics are predictors of financial behaviors. However, self-control plays a more prominent role as a mediator between the other variables, strengthening the overall relationship. Also, financial products can have a beneficial moderation effect assisting those consumers who need them the most.Practical implicationsThese insights help in creating target specific financial literacy strategies to influence consumers' financial behaviors. Also, there is a need to develop mechanisms to influence a consumer's self-control and thinking styles to improve financial behavior. In conjunction with other initiatives, the impact of financial literacy has a greater effect on financial behaviors. Further, the insights assist financial institutions and financial technology firms in offering and creating products to help customers make better financial decisions and improve their financial behaviors.Social implicationsThe research addressed a significant global issue – consumer financial health. The Great Recession and the COVID-19 recession highlight the need to focus on the consumer and efforts to improve their financial health.Originality/valueThis research highlighted the mediating role of self-control and suggested that existing and future financial products can positively influence consumer behavior drivers.

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.

THE EFFECTS OF PERCEIVED AND ACTUAL FINANCIAL LITERACY ON FINANCIAL BEHAVIORS

2015 ◽  
Vol 54 (1) ◽  
pp. 675-697 ◽  
Author(s):  
Sam Allgood ◽  
William B. Walstad
Keyword(s):  
Financial Literacy ◽  
Financial Behaviors

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.

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.

scholarly journals Financial Literacy Level of Individuals and Its Relationships to Demographic Variables

2017 ◽  
Vol 8 (3) ◽  
pp. 19-26 ◽  
Author(s):  
Murat Yıldırım ◽  
Fatih Bayram ◽  
Ahmet Oğuz ◽  
Gülay Günay
Keyword(s):  
Financial Literacy ◽  
Demographic Variables ◽  
Economic Conditions ◽  
Financing System ◽  
Strong Basis ◽  
Iron And Steel ◽  
Financial Behaviors ◽  
Financial Decisions ◽  
Standards Of Living ◽  
Literacy Level

Abstract Families act in an environment of financing system which includes the pressure of the economic powers. Under these economic conditions, standards of living of individuals who fail to take optimal financial decisions and to exhibit due financial behaviors undergo some change. Individuals’ self-consciousness on financial issues will not only prepare them for prospective hard economic conditions that may emerge in the future but also supports the development of the country on strong basis. In this perspective, the awareness of financial literacy will help to use the limited sources more affectively. Recently in this economic pressure financial literacy has become an increasingly important topic. The main purpose of this study is examining individual’s financial literacy level and determining the relationship between demographic variables and financial literacy. Participants in the study consist of individual who are employees in iron and steel industry and dwelling in Karabuk, Turkey. A total of 304 employees are participated in the study on a voluntary basis. Data were collected through a demographic information form, Financial Literacy Index developed by Van Rooji et al. (2011). Financial Literacy Index includes two sections: basic financial literacy (5 items) and advantage financial literacy (11 items). Results indicated that only 8.9% of the participants have correctly answered the five basic financial literacy items. The proportion of the correct answered in advantage financial literacy section (11 items) was too low (0.3%). The statistical analyses displayed that from demographic variables only education and monthly income was important determinant, both of basic and advantage financial literacy (p<0.05). The results of this research have significant implications for individuals, policymakers and educators in their search of strategies for improving individuals’ financial literacy level.

Financial Socialization, Financial Literacy, and Financial Behavior of Adults in New Zealand

2020 ◽  
Vol 31 (2) ◽  
pp. 313-329
Author(s):  
Rashid Ameer ◽  
Robert Khan
Keyword(s):  
New Zealand ◽  
Survey Data ◽  
Financial Literacy ◽  
Financial Behavior ◽  
Financial Socialization ◽  
Adult Males ◽  
Cross Sectional ◽  
Financial Behaviors ◽  
Adult Females ◽  
Personal Finances

We used survey data from a cross-sectional New Zealand sample of adults to examine whether financial socialization and financial literacy are associated with their financial behavior. The results show different financial socialization experiences of adult males compared to adult females are associated with higher financial literacy and higher financial confidence. Adults with education in finance and economics had higher financial literacy and financial confidence in managing their personal finances. Furthermore, those with high self-assessed confidence in managing personal finance but low financial literacy, have a higher propensity to engage in undesirable financial behaviors.

scholarly journals CLUSTER ANALYSIS OF FINANCIAL BEHAVIORS AND PREFERENCES AMONG THE BOTTOM OF THE PYRAMID GROUP

2019 ◽  
Vol 21 (1) ◽  
pp. 51-63
Author(s):  
Dewi Saraswati ◽  
Dian Kusumaningrum
Keyword(s):  
Cluster Analysis ◽  
Financial Literacy ◽  
Financial Planning ◽  
Financial Inclusion ◽  
Financial Behavior ◽  
Bottom Of The Pyramid ◽  
Chi Square ◽  
Banking Services ◽  
Financial Behaviors

This study investigates the financial behavior and preferences of the bottom of the pyramid (BOP) group, and thus, contributes to the financial inclusion demand-side literature. A survey of 100 households was conducted. A cluster analysis was used to analyze the data and portray the characteristics of the BOP. Further analysis was conducted using chi-square and ANOVA tests. The results reveal three sub-groups within the BOP which consists of the very low, low, and medium. Financial behaviors are found to be indifferent among the sub-groups, except for savings allocations and financial planning. Households with a better economic condition are found to have a higher attention to use banking services. The financial literacy category indicates different attitudes in conducting long-term financial planning and service preferences. This result implies that financial literacy and adequate financial products are beneficial towards the financial inclusion of the BOP group.

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