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

Author

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  • Jamie Wagner
  • William B. Walstad

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.

Suggested Citation

  • Jamie Wagner & William B. Walstad, 2019. "The Effects of Financial Education on Short‐Term and Long‐Term Financial Behaviors," Journal of Consumer Affairs, Wiley Blackwell, vol. 53(1), pages 234-259, March.
    • Handle: RePEc:bla:jconsa:v:53:y:2019:i:1:p:234-259
    DOI: 10.1111/joca.12210
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    Citations

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    Cited by:

    1. Gilenko, Evgenii & Chernova, Aleksandra, 2021. "Saving behavior and financial literacy of Russian high school students: An application of a copula-based bivariate probit-regression approach," Children and Youth Services Review, Elsevier, vol. 127(C).
    2. Khalid Abdul Ghafoor & Muhammad Akhtar, 2024. "Parents’ financial socialization or socioeconomic characteristics: which has more influence on Gen-Z’s financial wellbeing?," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-16, December.
    3. Lin, Chien-An & Bates, Timothy C., 2022. "Smart people know how the economy works: Cognitive ability, economic knowledge and financial literacy," Intelligence, Elsevier, vol. 93(C).
    4. Jihyung Han & Daekyun Ko, 2025. "Digital Financial Services and Sustainable Development: Temporal Trade-Offs and the Moderating Role of Financial Literacy," Sustainability, MDPI, vol. 17(20), pages 1-26, October.
    5. Gagandeep Kaur & Manjit Singh, 2024. "Pathways to Individual Financial Well-Being: Conceptual Framework and Future Research Agenda," FIIB Business Review, , vol. 13(1), pages 27-41, January.
    6. Gerrans, Paul, 2021. "Undergraduate student financial education interventions: Medium term evidence of retention, decay, and confidence in financial literacy," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    7. Thomas Korankye & Charlene M. Kalenkoski, 2021. "The Effect of Households’ Student Debt on Life Satisfaction," Journal of Family and Economic Issues, Springer, vol. 42(4), pages 757-772, December.
    8. Lu Fan & Robin Henager, 2022. "A Structural Determinants Framework for Financial Well-Being," Journal of Family and Economic Issues, Springer, vol. 43(2), pages 415-428, June.
    9. Fuzhong Chen & Jingxin Lu & Jiaying Li & Wenting Wang & Horlane Bissielou, 2020. "Sustainable Financial Education and Consumer Life Satisfaction," Sustainability, MDPI, vol. 12(3), pages 1-21, February.
    10. Gallego-Losada, Rocío & Montero-Navarro, Antonio & Rodríguez-Sánchez, José-Luis & González-Torres, Thais, 2022. "Retirement planning and financial literacy, at the crossroads. A bibliometric analysis," Finance Research Letters, Elsevier, vol. 44(C).
    11. Gärtner, Florian & Semmler, Darwin & Bannier, Christina E., 2023. "What could possibly go wrong? Predictable misallocation in simple debt repayment experiments," Journal of Economic Behavior & Organization, Elsevier, vol. 205(C), pages 28-43.
    12. Jing Jian Xiao & Kyoung Tae Kim & Sunwoo Lee, 2024. "Consumer Financial Capability and Financial Wellbeing; Multi-Year Analyses," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 19(2), pages 547-580, April.
    13. Ma, Liang & He, Qiqi & Gan, Qixu, 2025. "Impact of short-term labor contracts on financial health: Evidence from migrant worker households in China," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 448-463.
    14. Lu Fan, 2021. "A Conceptual Framework of Financial Advice-Seeking and Short- and Long-Term Financial Behaviors: An Age Comparison," Journal of Family and Economic Issues, Springer, vol. 42(1), pages 90-112, March.

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