Financial capability and wellbeing of vulnerable consumers

Abstract

Abstract Consumer financial capability can be defined variously by different researchers. In this study, financial capability is assumed to have three components, financial knowledge, financial behavior, and financial skills. This study examines relative contributions of financial capability components to financial wellbeing among vulnerable consumers. With data from the National Financial Wellbeing Survey commissioned by the Consumer Financial Protection Bureau (CFPB), results show that among financial capability components, financial behavior contributes the most to financial wellbeing of the whole sample, followed by financial skill and financial knowledge. In addition, group differences surface when subsamples in terms of age, poverty status, confidence, and fraud victim status are examined. Results suggest that for low‐income consumers, encouraging them to engage in desirable financial behaviors is more important than teaching them financial knowledge and skills. Findings have implications for financial educators, practitioners, and policymakers to help them recognize the proper financial education or program to be delivered based on consumer vulnerability and components of financial capability.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 61 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.