THE ASSOCIATION OF OBJECTIVE FINANCIAL DECISION MAKING WITH FINANCIAL LITERACY, EDUCATION, AND MATH SKILLS

Rationale: Financial decision-making (FDM) is a critical ability with implications across the adult life-span. In healthy adults, demographic and cognitive factors impact FDM. However, the impact of these factors on FDM has yet to be fully investigated. The aim of the current study was to understand the extent to which demographics (age, education, sex), financial literacy (crystallized ability), and mathematical ability (fluid ability) influence FDM. Participants and Methods: The sample, recruited from a larger ongoing study, consisted of 73 adults; mean age=61.31 (13.76) years, mean education=15.68 (2.61) years, 59.5% female, 58% Caucasian. FDM was measured using the Financial Competence Assessment Inventory, financial literacy using a standard set of 23 questions, and math skills using WAIS-III Arithmetic, WRAT-IV Math and Cognitive Reflection Test. Results: Only variables that were significantly associated with FDM in bivariate analysis were selected for the multiple regression analysis. After adjusting for multicollinearity, stepwise multiple regression analyses revealed that the overall model with 3 predictors (education, financial literacy, WAIS-III Arithmetic) was significant (F =23.64, p < .001) and explained 50.7% of the variance in FDM. Education and WAIS-III Arithmetic predicted FDM to a higher extent than financial literacy. Conclusions: The finding that education and fluid ability has a relatively higher impact on FDM as compared to crystallized ability is important. As one ages, fluid abilities decline more rapidly than crystallized abilities. This may be one explanation for why FDM ability worsens with age. To increase confidence in these findings, future research should test these models using age-stratified analyses.

The Role of Visuospatial Ability in the Raven’s Progressive Matrices

Debate surrounding the role of visuospatial ability in performance on the Raven’s Progressive Matrices (RPM) has existed since their conception. This issue has yet to be adequately resolved, and may have implications regarding sex differences in scores. Therefore, this study aimed to examine the relationship between RPM performance, visuospatial ability and fluid ability, and any sex differences in these relationships. Data were obtained from three samples: two University samples completed the Advanced RPM and one population-based sample of men completed the Standard RPM. All samples additionally completed an alternative measure of fluid ability, and one or more measures of visuospatial ability. Structural equation modeling was used to examine the relationships between performance on the visuospatial and fluid ability tests and performance on the RPM. Visuospatial ability was found to significantly contribute to performance on the RPM, over and above fluid ability, supporting the contention that visuospatial ability is involved in RPM performance. No sex differences were found in this relationship, although sex differences in visuospatial ability may explain sex differences in RPM scores.

Cognitive Predictors of Everyday Problem Solving across the Lifespan

Background: An important aspect of successful aging is maintaining the ability to solve everyday problems encountered in daily life. The limited evidence today suggests that everyday problem solving ability increases from young adulthood to middle age, but decreases in older age. Objectives: The present study examined age differences in the relative contributions of fluid and crystallized abilities to solving problems on the Everyday Problems Test (EPT). We hypothesized that due to diminishing fluid resources available with advanced age, crystallized knowledge would become increasingly important in predicting everyday problem solving with greater age. Method: Two hundred and twenty-one healthy adults from the Dallas Lifespan Brain Study, aged 24-93 years, completed a cognitive battery that included measures of fluid ability (i.e., processing speed, working memory, inductive reasoning) and crystallized ability (i.e., multiple measures of vocabulary). These measures were used to predict performance on EPT. Results: Everyday problem solving showed an increase in performance from young to early middle age, with performance beginning to decrease at about age of 50 years. As hypothesized, fluid ability was the primary predictor of performance on everyday problem solving for young adults, but with increasing age, crystallized ability became the dominant predictor. Conclusion: This study provides evidence that everyday problem solving ability differs with age, and, more importantly, that the processes underlying it differ with age as well. The findings indicate that older adults increasingly rely on knowledge to support everyday problem solving, whereas young adults rely almost exclusively on fluid intelligence.