Financial literacy and well-being in a five generation America: The 2021 TIAA Institute-GFLEC Personal Finance Index

Yakoboski, Paul; Lusardi, Annamaria; Hasler, Andrea

doi:10.2139/ssrn.4256797

Cited by 9 publications

(14 citation statements)

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“…This underscores meaningful differences by race and ethnicity, indicating that Black Americans and Hispanics likely face more challenges with short-and long-term financial wellbeing. This conclusion is confirmed by recent research investigating broad measures of financial well-being that include debt management across different racial and ethnic groups (Clark et al, 2021;Yakoboski et al, 2020;Yakoboski et al, 2021). Education appears to be another factor important to debt management.…”

Section: Particularly Vulnerable Subgroupssupporting

confidence: 65%

“…As most loans are long‐term contracts, an understanding of their risks and obligation to service and repay them is critical. Unfortunately, risk and risk‐related topics are extremely difficult concepts for people to grasp (Coppola et al, 2017; Lusardi, 2015; Yakoboski et al, 2021).…”

Section: Empirical Results: Debt Constraints and Financial Literacymentioning

confidence: 99%

“…3 Similar findings for the most vulnerable populations apply to the late debt payment measure, reported in Appendix Table A1. 4 For more information on the full ranking of all functional areas and the year-by-year comparison, see Yakoboski et al (2021). 5 See also Lusardi & Mitchell (2017) for further evidence on the relationship between the lack of financial knowledge and poor retirement planning.…”

Section: Funding Informationmentioning

confidence: 99%

“…4 4 For more information on the full ranking of all functional areas and the year‐by‐year comparison, see Yakoboski et al (2021). …”

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confidence: 99%

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How the pandemic altered Americans' debt burden and retirement readiness

2023

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This article analyzes Americans' perceptions of being debt‐constrained. We focus on which population subgroups reported feeling most debt‐constrained, how this perception was impacted by the COVID‐19 pandemic, and how it relates to financial literacy and retirement readiness. To this end, we analyze two datasets, namely the 2020 and 2021 TIAA Institute‐GFLEC Personal Finance Index files (P‐Fin Index). The evidence shows that, prior to and during the pandemic, one in three American adults felt constrained by their debt. The percentage was even higher among vulnerable subgroups such as Black and Hispanic individuals, those lacking a bachelor's degree, those with lower incomes, and those with low levels of financial literacy. Being debt‐constrained also has long‐term financial consequences, as it is negatively linked to planning and saving for retirement. Finally, we show that financial literacy has a strong connection to both debt and retirement money management, confirming that financial knowledge is essential if people are to be able to manage their debt and build financial well‐being.

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Section: Particularly Vulnerable Subgroupssupporting

confidence: 65%

Section: Empirical Results: Debt Constraints and Financial Literacymentioning

confidence: 99%

Section: Funding Informationmentioning

confidence: 99%

“…4 4 For more information on the full ranking of all functional areas and the year‐by‐year comparison, see Yakoboski et al (2021). …”

mentioning

confidence: 99%

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How the pandemic altered Americans' debt burden and retirement readiness

2023

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“…27 Relationship between financial literacy and fintech use have also not identified significant relationships, finding that it is not clear whether fintech use represents a net gain for better personal finance outcomes and that fintech is most appropriately viewed as a complement to, not a substitute for, financial literacy. 28 Financial literacy has also been found to affect financial decision-making, with individuals having low financial literacy being less likely to invest in Therefore, we identify two goals in this paper. First, we examine the relationship of the different facets of financial literacy individually with different instruments (by classifying them as simple/complex or traditional/new-age) and with fintech use (by classifying use cases as consumption or investment).…”

Section: Financial Literacy and Its Relationship With Financial Productsmentioning

confidence: 99%

Indian Millennials’ Financial Literacy and Its Relationship with Financial Instruments and Fintech

Bhatia

2023

Metamorphosis: A Journal of Management Research

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The study aims to evaluate the relationship between the use of nine financial instruments and the usage of two fintech applications with the four pillars of financial literacy, namely financial knowledge, advanced financial knowledge, financial behaviour, and financial attitude. A mixed-method analysis is conducted, proceeding with primary research through online surveys of 189 respondents and consequently phenomenology-based interviews with select respondents. A series of logistic regression estimates are specified to evaluate the relationships. Financial behaviour is identified as the pillar that explains the usage of the majority of instruments, while financial knowledge and financial attitude have the lowest explanatory power. The study makes important contributions by adapting OECD’s financial literacy construct to evaluate its relationship with different instruments and fintech uses for millennials, a demographic that is a key focus for policymakers, financial services firms, and startups in the post-pandemic digital native world.

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The Link Between Adverse Childhood Experiences and Financial Security in Adulthood

Harter

2021

J Fam Econ Iss

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This study provides an evidence-based link between adverse childhood experiences (ACEs) and adult financial wellbeing. Drawing on a comprehensive financial wellbeing framework that was developed by the Consumer Financial Protection Bureau, we analyze data from the Behavioral Risk Factor Surveillance System, a survey designed primarily to measure health behaviors and outcomes, but which also asks about financial wellbeing aspects such as food and housing security. We use ordered probit analysis to investigate how respondents' self-reported levels of food security and housing security are influenced by demographics that include remembered ACEs and find that, at various income levels, financial stress in adulthood is related to childhood trauma. This interdisciplinary approach to studying financial outcomes extends work in public health and psychology that establishes a link between ACEs and adult physical and mental health measures. The finding is timely as policy makers craft responses to global public health, financial, and other shocks. Recognizing this link between ACEs and adult financial wellbeing provides additional evidence that educators, therapists, social workers, and other professionals should collaborate and develop integrated practices to prevent or reduce ACEs and promote resilience.

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Financial literacy and well-being in a five generation America: The 2021 TIAA Institute-GFLEC Personal Finance Index

Cited by 9 publications

References 0 publications

How the pandemic altered Americans' debt burden and retirement readiness

How the pandemic altered Americans' debt burden and retirement readiness

Indian Millennials’ Financial Literacy and Its Relationship with Financial Instruments and Fintech

The Link Between Adverse Childhood Experiences and Financial Security in Adulthood

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