Abstract:This study uses data from the Panel Study of Income Dynamics to examine whether selfregulation, proxied by regularly dining together with family, is associated with better financial preparedness and greater wealth accumulation across time among households. Findings reveal that individuals who had sufficient self-regulation to regularly eat meals together with their family, increased wealth at a faster rate than others between 1994 and 2004. Moreover, those who exhibited self-regulation by frequently spending m… Show more
“…This study finds a strong and consistent effect of conscientiousness on wealth and asset accumulation. These findings are consistent with other studies finding a positive and significant relationship between conscientiousness and financial outcomes (Ameriks et al , ; Chatterjee, Palmer, and Goetz ). Holding all other variables constant, conscientiousness is positively related to wealth, with a one‐standard‐deviation increase associated with a 40% increase in net worth, a 53% increase in illiquid assets, and a 33% increase in liquid assets.…”
Section: Discussionsupporting
confidence: 93%
“…The expectations with respect to net worth are that individuals with high self‐control or high financial literacy will accumulate and maintain more liquid and illiquid assets, which increase overall net worth. Conscientiousness (Ameriks et al , ; Chatterjee et al ) and financial literacy (Lusardi and Mitchell ) are expected to be correlated with net worth, with high levels of conscientiousness and financial literacy associated with high levels of net worth. The hypotheses for net worth are as follows: H7: Conscientiousness will be positively correlated with net worth.H8: Financial literacy will be positively correlated with net worth.H9: Financial literacy will moderate the effect of conscientiousness on net worth.…”
Section: Conceptual Frameworkmentioning
confidence: 99%
“…The expectations with respect to net worth are that individuals with high self-control or high financial literacy will accumulate and maintain more liquid and illiquid assets, which increase overall net worth. Conscientiousness (Ameriks et al 2004(Ameriks et al , 2007Chatterjee et al 2010) and financial literacy (Lusardi and Mitchell 2011) are expected to be correlated with net worth, with high levels of conscientiousness and financial literacy associated with high levels of net worth. The hypotheses for net worth are as follows:…”
Section: Hypothesesmentioning
confidence: 99%
“…In fact, Duckworth and Seligman () found that self‐control was a better predictor of academic performance than intelligence (as measured by IQ score). Self‐control has increasingly been linked to financial behaviors and outcomes, including retirement accounts and planning (Chatterjee, Palmer, and Goetz ; Howlett, Kees, and Kemp ; Moffitt et al ); net worth and asset diversification (Chatterjee, Palmer, and Goetz ); and financial planfulness, savings, and home ownership (Moffitt et al ). Those with low self‐control are more likely to buy on impulse (Faber and Vohs ; Verplanken and Herabadi ) and have money management and credit problems (Moffitt et al ).…”
Section: Introductionmentioning
confidence: 99%
“…Conscientiousness has been linked to a number of social outcomes, including mortality (Friedman et al 1993); physical health (Goodwin and Friedman 2006); occupational attainment (Judge et al 1999); job performance (Hogan and Holland 2003); marriage stability (Roberts and Bogg 2004); and drug abstinence (Walton and Roberts 2004). In terms of financial outcomes, conscientiousness was found to be negatively related to impulse buying (Verplanken and Herabadi 2001) and positively associated with the accumulation of net worth (Ameriks et al 2007(Ameriks et al , 2004Chatterjee, Palmer, and Goetz 2010). Ameriks et al (2007Ameriks et al ( , 2004 found the participants in their study who scored high in the trait of conscientiousness were more likely to consume in line with their expectations.…”
This study utilizes the 1997 National Longitudinal Survey of Youth to examine the relationship between financial literacy, conscientiousness, and asset accumulation among young adults. Findings indicate that both conscientiousness and financial literacy are consistent predictors of asset accumulation among young Americans. A one-standard-deviation increase in conscientiousness is correlated with a 40% increase in net worth, a 53% increase in illiquid asset holdings, and a 33% increase in liquid asset holdings. A one-standard-deviation increase in financial literacy is correlated with a 60% increase in illiquid asset holdings and a 30% increase in liquid asset holdings. Financial literacy moderates the effect of conscientiousness on net worth. These findings suggest that conscientiousness and financial literacy are important factors and that policies and programming with a dual emphasis on increasing conscientiousness and financial literacy are likely to have a positive impact on consumer savings and asset-building.
“…This study finds a strong and consistent effect of conscientiousness on wealth and asset accumulation. These findings are consistent with other studies finding a positive and significant relationship between conscientiousness and financial outcomes (Ameriks et al , ; Chatterjee, Palmer, and Goetz ). Holding all other variables constant, conscientiousness is positively related to wealth, with a one‐standard‐deviation increase associated with a 40% increase in net worth, a 53% increase in illiquid assets, and a 33% increase in liquid assets.…”
Section: Discussionsupporting
confidence: 93%
“…The expectations with respect to net worth are that individuals with high self‐control or high financial literacy will accumulate and maintain more liquid and illiquid assets, which increase overall net worth. Conscientiousness (Ameriks et al , ; Chatterjee et al ) and financial literacy (Lusardi and Mitchell ) are expected to be correlated with net worth, with high levels of conscientiousness and financial literacy associated with high levels of net worth. The hypotheses for net worth are as follows: H7: Conscientiousness will be positively correlated with net worth.H8: Financial literacy will be positively correlated with net worth.H9: Financial literacy will moderate the effect of conscientiousness on net worth.…”
Section: Conceptual Frameworkmentioning
confidence: 99%
“…The expectations with respect to net worth are that individuals with high self-control or high financial literacy will accumulate and maintain more liquid and illiquid assets, which increase overall net worth. Conscientiousness (Ameriks et al 2004(Ameriks et al , 2007Chatterjee et al 2010) and financial literacy (Lusardi and Mitchell 2011) are expected to be correlated with net worth, with high levels of conscientiousness and financial literacy associated with high levels of net worth. The hypotheses for net worth are as follows:…”
Section: Hypothesesmentioning
confidence: 99%
“…In fact, Duckworth and Seligman () found that self‐control was a better predictor of academic performance than intelligence (as measured by IQ score). Self‐control has increasingly been linked to financial behaviors and outcomes, including retirement accounts and planning (Chatterjee, Palmer, and Goetz ; Howlett, Kees, and Kemp ; Moffitt et al ); net worth and asset diversification (Chatterjee, Palmer, and Goetz ); and financial planfulness, savings, and home ownership (Moffitt et al ). Those with low self‐control are more likely to buy on impulse (Faber and Vohs ; Verplanken and Herabadi ) and have money management and credit problems (Moffitt et al ).…”
Section: Introductionmentioning
confidence: 99%
“…Conscientiousness has been linked to a number of social outcomes, including mortality (Friedman et al 1993); physical health (Goodwin and Friedman 2006); occupational attainment (Judge et al 1999); job performance (Hogan and Holland 2003); marriage stability (Roberts and Bogg 2004); and drug abstinence (Walton and Roberts 2004). In terms of financial outcomes, conscientiousness was found to be negatively related to impulse buying (Verplanken and Herabadi 2001) and positively associated with the accumulation of net worth (Ameriks et al 2007(Ameriks et al , 2004Chatterjee, Palmer, and Goetz 2010). Ameriks et al (2007Ameriks et al ( , 2004 found the participants in their study who scored high in the trait of conscientiousness were more likely to consume in line with their expectations.…”
This study utilizes the 1997 National Longitudinal Survey of Youth to examine the relationship between financial literacy, conscientiousness, and asset accumulation among young adults. Findings indicate that both conscientiousness and financial literacy are consistent predictors of asset accumulation among young Americans. A one-standard-deviation increase in conscientiousness is correlated with a 40% increase in net worth, a 53% increase in illiquid asset holdings, and a 33% increase in liquid asset holdings. A one-standard-deviation increase in financial literacy is correlated with a 60% increase in illiquid asset holdings and a 30% increase in liquid asset holdings. Financial literacy moderates the effect of conscientiousness on net worth. These findings suggest that conscientiousness and financial literacy are important factors and that policies and programming with a dual emphasis on increasing conscientiousness and financial literacy are likely to have a positive impact on consumer savings and asset-building.
Financial knowledge is an essential component in financial decision making; however, knowledge is insufficient to ensure responsible financial behavior. We investigate the weak association between financial knowledge and behavior by simultaneously testing the roles financial knowledge, parental influence, and individual psychological characteristics (self-discipline and thoroughness) play in young adults' financial behaviors. Results from 2,712 respondents from the 1997 National Longitudinal Survey of Youth confirm there is a weak association between financial knowledge and behavior. Parental influence and self-discipline positively associate with responsible financial behavior. We also investigate the moderating role of gender and observe that financial knowledge and parental influence improve women's financial behavior more than men, whereas being thorough has a larger impact among males. These findings suggest that considering social and individual psychological factors in financial education programs could improve program efficiency. The results also highlight the importance of adopting tailored financial education to suit gender differences.Young adults face unprecedented obligations and complexity in today's financial environment. At the same time, low levels of financial literacy are widespread among American young adults (Lusardi, Mitchell, and Curto 2010;Mandell 2009;Manton et al. 2006). Aiming at improving young adults' financial literacy to make responsible financial decisions, policymakers and educators have initiated and promoted various programs focusing on financial knowledge delivery. The operating assumption is that increased levels of financial knowledge can lead to responsible financial management behavior.
This study uses the National Longitudinal Survey of Youth (1997) to examine the factors that impact homeownership among young adults, with an emphasis on student loan debt. Three key findings arise from the research. First, life cycle and demographic characteristics, such as marital status, education, and income, continue to be strong predictors of homeownership. Married households with a college degree and children are among the most likely to own a home. Second, young adults with student loan debt are no more or less likely to own a home than someone without debt after controlling for a number of factors; however, students who have already paid off their loans are more likely to own a home. Finally, respondents who express a willingness to take risks in finances are more likely to own a home while those who are more conscientious are less likely to own a home.
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