This study presents a community-based financial literacy program offered to low-income families in the heart of Silicon Valley. Leveraging local financial institutions and organizations, it provided financial education and encouraged habit formation, hoping for lasting outcomes toward financial well-being. Program impact was assessed in the areas of financial knowledge gain, behavioral tendencies in financial decision-making, and self-reported personal finances. Participants showed significant improvement in key knowledge areas, with positive impact observed in behavioral tendencies such as financial goal setting. Improvements in financial outcomes were not significant. The results of this intervention illustrate that maintaining long-term impact and applying sophisticated evaluation methods present key challenges for community-based efforts focused on financial education.

Recent research has shown that two forms of education intervention significantly improve financial outcomes: rigorous, in-depth personal finance courses and additional mathematics coursework. This suggests that a mathematics course that offered systematic, in-depth applications to personal finance could be particularly effective. In this article, we summarize the results from a pilot of such a course, and demonstrate how it is motivated by recent literature, despite being a type of course that has so far not been studied thoroughly. We then present the results of our preliminary impact assessment and show how financial knowledge and confidence improve significantly after taking the course. We discuss how this indicates that such an approach is a promising strategy for improving financial outcomes.

This study examines the degree to which the customer risk profiling measure (CRPM), commonly used by financial institutions to determine loss tolerance of investors, is psychometrically valid in assessing risk tolerance and predicting anxiety after experiencing a significant investment loss. Data were collected online from 91 respondents with various investment experience. Results suggest that CRPM is significantly correlated with the Grable and Lytton's Financial Risk Tolerance Scale (G/L-RTS), a validated financial risk tolerance measure. CRPM is also able to predict anxiety after experiencing a significant investment loss. Furthermore, CRPM also demonstrates incremental predictive validity above and beyond G/L-RTS in predicting anxiety after investment loss.

This article investigates the credit card debt puzzle. Simultaneously holding credit card debt and liquid assets is puzzling given the sizeable difference between interest rates of debt and assets. However, this behavior is common—about 31% of households in the 2016 Survey of Consumer Finances. The cost of co-holding may be justified if consumers anticipate future restrictions in credit or if they need to maintain liquidity. Other existing explanations for co-holding include impulsive spending and low financial literacy. This research reveals a new explanation for the credit card debt puzzle: consumers' overconfidence of their financial knowledge. Using a Coarsened Exact Matching method, we found that overconfident consumers were 20%–40% more likely to co-hold credit card debt and liquid assets.

We examined the association between financial knowledge overconfidence and the perception of emergency fund needs using the 2016 Survey of Consumer Finances (SCF) dataset. Only 28% of respondents reported a perceived amount of emergency funds needed that would cover at least three months of estimated spending. We conducted an OLS regression analysis on the log of the ratio of perceived emergency fund needs to household monthly expenditure. Overconfident respondents perceived a ratio 21.4% lower than those who had objective and subjective financial knowledge above median levels. Overconfident respondents might be underestimating emergency fund needs, suggesting the importance of not only increasing objective financial knowledge but also making consumers aware of the limitations of their financial knowledge.

This study used the 2017 National Financial Well-Being Survey to investigate the relationship between cognitive ability and seeking financial advice. Three aspects of cognitive ability were examined: memory, objective numeracy, and subjective numeracy. The results showed that in general, the three were not associated with seeking financial advice. However, after decomposing the sources of the advice, we found that among financial advice-seekers, memory and objective numeracy were positively associated with seeking financial advice from family. When adding the interactions between cognitive ability factors and age, older individuals with good memories were less likely to seek advice from family, while older individuals with higher objective numeracy were less likely to use social networks to seek financial advice. The study’s findings suggest future development in policies and practices to benefit those with low cognitive abilities to seek better financial advice using multiple advice sources.

This article reviews the theories and literature in intrahousehold financial decisions, spousal partners and financial decision making, family system and financial decision process, children, and financial decisions. The article draws conclusions from the literature review and discusses directions for future research and educational programs. Most financial education and counseling takes place at the individual level, whereas financial decisions take place at household and intrahousehold levels. Family members, spouses/partners, children, and others play a key role in individuals’ financial decisions. The article proposes the key programmatic implications for financial professionals and educators that need to be integrated into financial education and counseling. Understanding the unique dynamics of family financial decision making would help create effective educational and counseling strategies for the whole families.

The mismatch between financial objective and subjective knowledge that occurs in youth and adolescents has been understudied in the literature. Based on objective and subjective financial literacy scores, this study categorizes financial literacy into four types: financial literacy overconfidence, underconfidence, competence, and naïvete in a sample of adolescents. Data were collected from 330 students aged around 15 years old in six middle schools in Hong Kong. The results indicate that adolescents who are overconfident about their financial literacy are more likely to engage in risky financial behavior and report higher levels of financial autonomy. A randomized experimental trial was conducted to assess whether financial education could change the mismatch between financial objective and subjective knowledge. The results show a significant increase in underconfidence after the financial education intervention, but no significant change in the other three categories. The findings highlight the same type of financial literacy overconfidence in both adolescents and adults and has implications for financial counselors and educators who would improve the financial engagement of adolescents.

A variety of risk assessment questionnaires are used within the financial planning profession to assess client risk preferences. Evidence indicates that the average person overweighs losses relative to an arbitrary reference point. This paper evaluated risk assessment questions on how well they correlate with monetary loss aversion. Twenty-nine Western Texas residents between the ages of 27 and 56 participated in experimental research and filled out several risk assessment questionnaires. Two weeks later their levels of loss aversion were measured using monetary gain and loss scenarios. The individual risk assessment questions were placed into three categories: expected utility theory, prospect theory and self-assessment. Composite measures were created for within-group and between-group comparisons. Statistically significant correlations were found between monetary loss aversion and different composite measures. The results provide financial planners with a group of risk assessment questions that capture loss-averse preferences.

The Social Security Statement is one of the most important outreach efforts of the Social Security Administration (SSA). In October 1999, SSA began sending out the Statement to inform Americans aged 25 or older about their estimated benefits and their earnings records. This article reviews the Statement's history, discusses how the public uses the Statement in retirement planning, and highlights how the Statement has increased the public's knowledge of Social Security. The article describes SSA tools and publications that the public can use in retirement planning. It concludes with suggestions for how financial educators, counselors, planners, and researchers might use the Statement and related survey data to inform the public about Social Security programs, benefits, and services.