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Title: Financial literacy and financial behavior: Assessing knowledge and confidence.
Authors: Tokar Asaad, Colleen
Abstract: This article explores how financial literacy, comprised of both actual financial knowledge and perceived financial confidence, affect financial decisions. Using national survey data from the United States, results indicate that financial confidence is a critical component of financial literacy and is important across all knowledge levels. However, overconfident individuals, or those with high confidence (or self-assessed) knowledge but low actual knowledge, have a higher propensity to engage in risky (costly) financial behaviors. Together, results suggest that financial literacy initiatives should focus not only on factual knowledge, but on helping individuals achieve a healthy dose of confidence.
Subjects: FINANCIAL literacy; CONFIDENCE; FINANCE education; FINANCIAL risk; FINANCIAL services industry
Publication: Financial Services Review, 2015, Vol 24, Issue 2, p101
ISSN: 1057-0810
Publication type: Academic Journal
DOI: 10.61190/fsr.v24i2.3236

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Financial literacy and financial behavior: Assessing knowledge and confidence.