The purpose of this study was to examine the association between myopic time discounting and financial well-being moderated by financial knowledge, guided by the dual-self model. Regression results with data from the 2016 National Financial Well-Being Survey sponsored by the Consumer Financial Protection Bureau showed that myopia was associated negatively with financial well-being. In addition, financial knowledge was positively associated with financial well-being, and it plays an important role as a moderator on the association between myopia and financial well-being. When both financial knowledge’s direct and interactive effects were considered, financial knowledge may increase the financial well-being of myopic discounters at much smaller rates than nonmyopic discounters. This study provides implications for financial practitioners, educators, and researchers in helping consumers improve their financial well-being.
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- Go to article: More Than a Score? Indirect Associations Between Credit Score and Romantic Relationship Quality in Emerging Adulthood
More Than a Score? Indirect Associations Between Credit Score and Romantic Relationship Quality in Emerging Adulthood
Higher credit scores have unique financial benefits that may aid in emerging adults’ efforts toward financial independence. Yet, it is unknown if higher credit scores may also yield romantic relationship benefits. In a sample of 916 U.S. emerging adults, we used structural equation modeling to test the indirect associations between credit score and romantic relationship quality. Credit score was positively associated with financial self-efficacy and negatively associated with financial deception. Additionally, credit score was indirectly associated with romantic relationship quality through financial self-efficacy and financial deception. We encourage educators and clinicians working with emerging adults in romantic relationships to help these emerging adults learn how to establish credit and raise their credit scores, which might improve financial and relational outcomes.
- Go to article: Financial Literacy Content Areas for Professional Athletes: Evidence From a Qualitative Study
Many people spend their working lives accumulating financial resources to sustain them once they retire, which is usually in their early to mid-60s. However, the working lives of professional athletes are unique, with finite sports careers and a range of possible challenges during the transitional phase after their sports careers have ended. This study shows an illustrative framework for financial literacy content areas required by professional athletes to achieve long-term financial well-being. Actor–network theory guided the completion of 27 semistructured face-to-face interviews as well as 10 structured follow-up interviews conducted in South Africa among networks of rugby and cricket players to develop and validate the framework. The research findings suggest professional athletes should take responsibility for their financial planning and have the financial literacy skills to seek, interpret, and apply financial advice. The findings also provide some considerations for education initiatives to improve the financial literacy of professional athletes. The results of this study have implications for professional athletes as well as financial planners, educators, and others positioned to potentially influence the professional athletes’ financial decisions.
- Go to article: Using Cognitive Science and Technology to Enhance Financial Education: The Effect of Spaced Retrieval Practice
Using Cognitive Science and Technology to Enhance Financial Education: The Effect of Spaced Retrieval Practice
Financial literacy is an important life skill, yet the impact of financial education has often been found to be modest. We conducted a field experiment to assess the effectiveness of a postinstruction intervention using a smartphone app that incorporated cognitive science principles aimed at improving learning. College students who completed a required credit review workshop during their sophomore year used the smartphone app in one of three practice conditions: control (no practice), massed, or spaced retrieval practice with elaborative feedback. On a final assessment about 5 months later, students who engaged in spaced retrieval practice were superior to those in the control and massed practice conditions in terms of knowledge. Given the ubiquity of smartphones today, the results highlight the potential of harnessing easily accessible technology as learning tools to augment the retention and transfer of knowledge.
- Go to article: Social Factors Associated With Financial Behavior of Women Borrowing Microfinance Loans: Evidence From a Developing Economy
Social Factors Associated With Financial Behavior of Women Borrowing Microfinance Loans: Evidence From a Developing Economy
Women borrowers in the microfinance sector can have an important social and economic impact on any economy. The financial behavior of women is one of the important issues besetting a country, particularly a developing country. However, social factors associated with women’s financial behavior have not been investigated adequately. This study aimed at examining social factors associated with women’s financial behavior within the microfinance sector of the Northern and Eastern provinces of Sri Lanka. A sample of 298 women living in civil war-affected provinces who have secured microfinance loans and were currently suffering from the consequences of such borrowings was used for the study. The results obtained from the structured questionnaire showed that financial socialization, perceived social support, and personal social capital are associated with the financial behavior of these women. The findings of this study have implications for policymakers, microfinance institutions, and scholars in their attempts to expand support for women borrowers.
Research on residential preferences has consistently orbited around their been correlation with economic and social factors. This study builds on the existing literature by investigating the personality characteristics that shape residential behavior. The specific objective is to examine the Big Five personality traits (OCEAN)—openness, conscientiousness, extraversion, agreeableness, and neuroticism—and their relationship with the value of individuals’ primary residences and mortgage debt using data collected from the Health and Retirement Study. Regression models are estimated to examine the associations between the OCEAN personality traits and home value and mortgage debt. The findings reveal the following associations: openness and conscientiousness are associated positively, and agreeableness is associated negatively, with larger home values; whereas openness and agreeableness are associated positively, and conscientiousness and neuroticism are associated negatively, with larger mortgage debts.
- Go to article: Financial Socialization Agents and Spending Behavior of Emerging Adults: Do Parents, Peers, Employment, and Media Matter?
Financial Socialization Agents and Spending Behavior of Emerging Adults: Do Parents, Peers, Employment, and Media Matter?
Using consumer socialization theory, this study examined the associations between perceived influence of parents, peers, employment, and media and spending behaviors of emerging adult college students from three different regions of the US: Northeast, South Atlantic, and Mountain regions. Data from the Emerging Adult Financial Capability Study (N = 2,322) were analyzed using structural equation modeling. Greater parental and employment influences perceived by the students were linked with more responsible spending behaviors, while greater peer and media influences were associated with less responsible spending behaviors. This study highlights the importance of the home and the workplace as the nexus for financial learning. This knowledge can help focus efforts to help future emerging adult college students learn responsible spending behaviors.
This article examines the effect of financial trust on the demand for financial advice in Singapore. Using a general population sample, we study how consumers’ trust in financial institutions impacts both their advice-seeking and advice-adopting behaviors. Only 4 in 10 respondents state that they usually seek (or adopt) advice from a financial advisor before investing their savings. We find that financial trust is a strong predictor of both behavioral outcomes, even after accounting for endogeneity and a number of covariates. Furthermore, the estimated effect of financial trust on adopt advice is larger than that on seek advice. These results are robust to variations in empirical specifications. Results also reveal that education is positively associated with the demand for financial advice, while ethnic minorities are less inclined to seek or adopt professional advice. Our findings underscore the importance of enhancing consumers’ trust in financial institutions as a means to further develop the financial services sector and financial advice markets.
- Go to article: Exploring Gender- and Race-Based Financial Stereotypes in Black and White College Students
Financial behavior disparities across race and gender persist in the United States. Historical and structural factors contribute to such disparities. It is important to understand the psychological mechanisms underlying these disparities to begin to achieve wealth equity. This study addressed one potentially relevant psychological construct: stereotypes about financial behaviors. Using a sample of 114 college students from a large public university, the study explored societally held beliefs about financial behaviors. The results showed that White men were generally viewed as more financially competent than White women, who were viewed as more financially competent than Black men and Black women. Implications for financial education and financial behaviors are discussed.