I Know I Should, But Do I Do It? Connecting Covert and Overt Financial Behaviors

When it comes to money, clients often know what they should do, but they do not always do it. The purpose of this study was twofold: (a) to introduce a new scale to measure financial cognition and (b) to explore the link between thinking (i.e., covert behavior) and financial behavior (i.e., overt behavior). Social Cognitive Theory and Cognitive Behavioral Theory framed the study. Data were collected in two stages from 236 employees in a Midwestern region. Stage one results suggest a newly developed measure, the Financial Cognition Scale, shows acceptable reliability, and construct validity. Stage two found positive associations between the covert behaviors of financial cognition, financial knowledge, and financial self-efficacy and the overt behavior of financial behavior, and a negative association between financial anxiety and financial behavior. Implications for practitioners and researchers are presented.