The Effects of Financial Education on Short‐Term and Long‐Term Financial Behaviors

2018/06/08 by Jamie Wagner, William B. Walstad · 4 citations
Business, Management and Accounting · Economics, Econometrics and Finance · Social Sciences · #Actuarial science #Business #Economics #Finance #Financial Literacy, Pension, Retirement Analysis #Financial literacy #Housing Market and Economics #Retirement, Disability, and Employment #Term (time) #Work (physics)

paper · pdf · doi:10.1111/joca.12210

openalex publication_date 2018/06/08 · crossref created 2018/06/08 · crossref issued 2018/06/23 · crossref published 2018/06/23 · crossref published-online 2018/06/23 · crossref published-print 2019/03/01 · crossref deposited 2023/09/14 · openalex created_date 2025/10/10 · crossref indexed 2026/08/03 · openalex updated_date 2026/08/04

Abstract

This study investigates how financial education in high school, college, or in the workplace affects the short‐ and long‐term financial behaviors of adults using the 2015 National Financial Capability Study (NFCS) data. Financial education appears to have generally insignificant effects on short‐term behaviors for which there is regular feedback and penalties, and thus greater opportunity for learning by doing. If consumers do not pay off their credit card bill, they get a monthly statement showing interest charges and penalties. Financial education appears to have more positive and stronger effects on long‐term behaviors with less timely feedback, and for which the adverse consequences are not fully realized until later in life, so learning by doing may not work. Not saving enough money for retirement cannot be easily or quickly corrected, if at all. The benefits to financial education may differ based on the time horizon for the financial behaviors.

Citations

• Financial Literacy, Financial Education, and Downstream Financial Behaviors
• Planning and Financial Literacy: How Do Women Fare?
• Measuring Financial Literacy
• The Economic Importance of Financial Literacy: Theory and Evidence

Cited by

• Healthy financial habits in young adults: An exploratory study of the relationship between subjective financial literacy, engagement with finances, and financial decision‐making
• Financial capability of student loan holders who are college students, graduates, or dropouts
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• What My Parents Did for Me: Parental Financial Sacrifice, Money Scripts, and Financial Behaviors Among Hong Kong Youths in Low‐ SES Households

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