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Consumer Financial Capability and Financial Satisfaction

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  • Jing Xiao

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  • Cheng Chen
  • Fuzhong Chen

Abstract

The purpose of this study was to examine associations between consumer financial capability and financial satisfaction. Consumer financial capability was measured by three sets of variables, perceived financial capability, financial literacy, and financial behavior. Using data from the 2009 US State-by-State Survey of Financial Capability, the results indicated the positive association between perceived financial capability and financial satisfaction. The findings suggested that desirable financial behavior increases while risky financial behavior decreases financial satisfaction. Subjective financial literacy was also found to contribute positively to financial satisfaction. The positive association between objective financial literacy and financial satisfaction was found in bivariate analyses but not in multivariate analyses. The results imply that to enhance consumer financial well-being, consumer financial education programs should emphasize action taking and encourage consumers to avoid risky financial behavior, engage in desirable financial behavior, and improve financial self-efficacy. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Jing Xiao & Cheng Chen & Fuzhong Chen, 2014. "Consumer Financial Capability and Financial Satisfaction," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(1), pages 415-432, August.
  • Handle: RePEc:spr:soinre:v:118:y:2014:i:1:p:415-432
    DOI: 10.1007/s11205-013-0414-8
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    Cited by:

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    2. Tharp, Derek & Parks-Stamm, Elizabeth, 2020. "Examining Gender Differences in Predictors of Financial Satisfaction: Evidence from Taiwan," SocArXiv 2yvjs, Center for Open Science.
    3. Waqas Ali & Rehman Javaid & Shujahat Ali3 & Yasir Akram & Ayaz Ul Haq, 2019. "Infl Uence Of Life Events On The Financial Satisfaction Of Individuals," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 15(1), pages 15-10.
    4. M. Joseph Sirgy, 2018. "The Psychology of Material Well-Being," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 13(2), pages 273-301, June.
    5. Anoosheh Rostamkalaei & Allan Riding, 2020. "Immigrants, Financial Knowledge, and Financial Behavior," Journal of Consumer Affairs, Wiley Blackwell, vol. 54(3), pages 951-977, September.
    6. Thérèse Lind & Ali Ahmed & Kenny Skagerlund & Camilla Strömbäck & Daniel Västfjäll & Gustav Tinghög, 2020. "Competence, Confidence, and Gender: The Role of Objective and Subjective Financial Knowledge in Household Finance," Journal of Family and Economic Issues, Springer, vol. 41(4), pages 626-638, December.
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    8. Zhong Chu & Zhengwei Wang & Jing Jian Xiao & Weiqiang Zhang, 2017. "Financial Literacy, Portfolio Choice and Financial Well-Being," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 132(2), pages 799-820, June.
    9. Jing Jian Xiao & Nilton Porto, 2019. "Financial education and insurance advice seeking," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(1), pages 20-35, January.
    10. J. Birkenmaier & Q. J. Fu, 2019. "Does Consumer Financial Management Behavior Relate to Their Financial Access?," Journal of Consumer Policy, Springer, vol. 42(3), pages 333-348, September.
    11. Chen, Fuzhong & Hsu, Chien-Lung & Lin, Arthur J. & Li, Haifeng, 2020. "Holding risky financial assets and subjective wellbeing: Empirical evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 54(C).
    12. Dominika Maison & Marta Marchlewska & Katarzyna Sekścińska & Joanna Rudzinska-Wojciechowska & Filip Łozowski, 2019. "You don’t have to be rich to save money: On the relationship between objective versus subjective financial situation and having savings," PLOS ONE, Public Library of Science, vol. 14(4), pages 1-15, April.
    13. Casey J. Totenhagen & Melissa J. Wilmarth & Joyce Serido & Melissa A. Curran & Soyeon Shim, 2019. "Pathways from Financial Knowledge to Relationship Satisfaction: The Roles of Financial Behaviors, Perceived Shared Financial Values with the Romantic Partner, and Debt," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 423-437, September.
    14. Nurul Shahnaz Mahdzan & Rozaimah Zainudin & Mohd Edil Abd. Sukor & Fauzi Zainir & Wan Marhaini Wan Ahmad, 2019. "Determinants of Subjective Financial Well-Being Across Three Different Household Income Groups in Malaysia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 146(3), pages 699-726, December.
    15. Hanson, Thomas A. & Olson, Peter M., 2018. "Financial literacy and family communication patterns," Journal of Behavioral and Experimental Finance, Elsevier, vol. 19(C), pages 64-71.
    16. Cliff A. Robb & Swarn Chatterjee & Nilton Porto & Brenda J. Cude, 2019. "The Influence of Student Loan Debt on Financial Satisfaction," Journal of Family and Economic Issues, Springer, vol. 40(1), pages 51-73, March.
    17. Derek T. Tharp & Martin Seay & Cherie Stueve & Somer Anderson, 2020. "Financial Satisfaction and Homeownership," Journal of Family and Economic Issues, Springer, vol. 41(2), pages 255-280, June.
    18. Jae Min Lee & Jonghee Lee & Kyoung Tae Kim, 2020. "Consumer Financial Well-Being: Knowledge is Not Enough," Journal of Family and Economic Issues, Springer, vol. 41(2), pages 218-228, June.
    19. Juha Munnukka & Outi Uusitalo & Veera-Juulia Koivisto, 2017. "The consequences of perceived risk and objective knowledge for consumers’ investment behavior," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 22(4), pages 150-160, December.
    20. Terri Friedline & Stacia West, 2016. "Financial Education is not Enough: Millennials May Need Financial Capability to Demonstrate Healthier Financial Behaviors," Journal of Family and Economic Issues, Springer, vol. 37(4), pages 649-671, December.
    21. Waqas Ali & Rehman Javaid & Shujahat Ali3 & Yasir Akram & Ayaz Ul Haq, 2019. "Infl Uence Of Life Events On The Financial Satisfaction Of Individuals," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 15(1), pages 123-137.
    22. Hampson, Daniel P. & Grimes, Anthony & Banister, Emma & McGoldrick, Peter J., 2018. "A typology of consumers based on money attitudes after major recession," Journal of Business Research, Elsevier, vol. 91(C), pages 159-168.
    23. Robin Henager & Brenda J. Cude, 2019. "Financial Literacy of High School Graduates: Long- and Short-Term Financial Behavior by Age Group," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 564-575, September.

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