Financial literacy or investment experience: which is more influential in cryptocurrency investment?

PurposeThe purpose of this study was to investigate how financial literacy and investment experience impact cryptocurrency investment behavior and explore which factor is more influential in cryptocurrency investment.Design/methodology/approachUsing a sample of US individual investors from the 2018 National Financial Capability Study Investor Survey, a three-step hierarchical logistic regression was conducted following a model-comparison approach. In addition, a mediation analysis was conducted using the Karlson−Holm−Breen (KHB) method to further explore the mediating effect of investment experience between financial literacy and cryptocurrency investment.FindingsThis study found that while both financial literacy and investment experience were positively associated with investing in cryptocurrencies, investment experience was more influential in cryptocurrency investment. The findings also demonstrated that investment experience, especially risky asset holding, had a significant mediating effect between subjective financial knowledge and cryptocurrency investment behavior.Practical implicationsThe findings of this study offer insight to researchers by providing a deeper understanding of the determinants of cryptocurrency investment in the United States. This study also provides detailed implications for financial institutions, financial professionals and policymakers to guide rational cryptocurrency investment behavior.Originality/valueThis study is one of the initial attempts to explore the determinant factors in cryptocurrency investment, an area that has rarely been studied in the literature.

Financial Attitudes and Charitable Giving

Why do people give away their money? Charitable giving has traditionally been modeled using socioeconomic (i.e., age, income, education) and psychographic variables (i.e., self-esteem, guilt, pity). However, given that charitable giving is, inherently, a financial activity, would financial variables with a psychographic element (i.e., financial attitudinal variables) have the ability to improve the prediction of giving behavior? Using the 2016 Survey of Consumer Finances (SCF), we found that higher risk tolerance, higher subjective financial knowledge, longer financial time horizon, and access to emergency funds from friends/relatives all were positively associated with charitable giving. The results of this study help broaden the potential information set for financial counselors, marketers, nonprofit organizations, or policymakers when understanding a client's intention to charitably give and identifying potential donors beyond traditional socioeconomic and psychographic variables.

Who Uses Mobile Payments: Fintech Potential in Users and Non-Users

This study used data from the 2015 National Financial Capability Study to analyze the adoption of mobile payments by U.S. households. While 24% of respondents used mobile payments, the mean rate for those under age 25 was 11 times the rate for those 65 and older. State rates ranged from about 9% in Montana to 34% in Washington, DC. Based on a logistic regression, age and an objective financial knowledge score were negatively while risk tolerance and a subjective financial knowledge score were positively related to mobile payment use. The results have implications for marketing of Fintech applications for personal finance, especially in terms of the extremely low mobile payment use by older consumers.

The Utilization of Robo-Advisors by Individual Investors: An Analysis Using Diffusion of Innovation and Information Search Frameworks

This study examines the roles of internal and external search characteristics and attitudinal factors in investors' decisions to utilize robo-advisor-based platforms. Using the 2015 state-by-state National Financial Capability Study and Investor Survey, this study finds that the need to free up time, higher risk tolerance, higher subjective financial knowledge, and higher amounts of investable assets were positively associated with individual investors' adoption of robo-advisors. Additionally, the results from the interaction model indicates that individuals under 65 with a higher risk tolerance and greater perceived investment knowledge were more likely to use robo-advisors. Implications of the key findings for scholars, practitioners, and industry leaders are included.

Competence, Confidence, and Gender: The Role of Objective and Subjective Financial Knowledge in Household Finance

We studied the association of individual differences in objective financial knowledge (i.e. competence), subjective financial knowledge (i.e. confidence), numeric ability, and cognitive reflection on a broad set of financial behaviors and feelings towards financial matters. We used a large diverse sample (N = 2063) of the adult Swedish population. We found that both objective and subjective financial knowledge predicted frequent engagement in sound financial practices, while numeric ability and cognitive reflection could not be linked to the considered financial behaviors when controlling for other relevant cognitive abilities. In addition, both objective and subjective financial knowledge served as a buffer against financial anxiety, while we did not detect similar buffering effects of numeric ability and cognitive reflection. Subjective financial knowledge was found to be a stronger predictor of sound financial behavior and subjective wellbeing than objective financial knowledge. Women reported a lower level of subjective financial wellbeing even though they reported a more prudent financial behavior than men, when controlling for sociodemographics and cognitive abilities. Our findings help to understand heterogeneity in people’s propensity to engage in sound financial behaviors and have implications for important policy issues related to financial education.

Financial Knowledge, Confidence, Credit Use, and Financial Satisfaction

This article investigates associations between confidence about financial knowledge and two outcome variables, financial behaviors and financial satisfaction. On one hand, subjective financial knowledge (confidence) is necessary to make proactive decisions, yet overconfidence has been associated with a range of negative financial behaviors and outcomes. Both types of objective and subjective knowledge may be related to critical financial behaviors and choices such as credit card usage which in turn may be associated with financial satisfaction, an important component of consumer well-being. This article analyzes data from the 2015 National Financial Capability Study to examine how financial knowledge confidence relates to credit card behaviors and financial satisfaction. We use mediation and floodlight analyses to uncover relevant relationships between variables of interest. We find evidence that confidence is associated with healthy credit card use that contributes to financial satisfaction. We also observe strong interactions with knowledge to find that confidence is more strongly associated with credit card use and overall financial satisfaction as knowledge increases. Findings from this study can help financial educators and advisors to deliver the right mix of financial knowledge to better financial choices and behaviors.

Hesitancy to Seek Help Millennial Generation in Surabaya

This study aims to determine the effect of financial issue involvement, subjective financial knowledge, grit, financial health self efficacy, and financial stressed on hesitancy to help in the millennial generation in Surabaya. The method used in this research is quantitative research methods. The sample in this study were 100 respondents taken by purposive sampling method. Data analysis will be carried out using partial least square with the help of SmartPLS version 3. The results of the study show that financial issue involvement, subjective financial knowledge, and grit have a significant effect on financial health self efficacy, but financial health self efficacy has no significant effect on hesitancy to seek help. Financial stressed has a significant effect on hesitancy to seek help.

Importance of Subjective Financial Knowledge and Perceived Credit Score in Payday Loan Use

This study examined the factors associated with consumers’ decisions to use payday loans. Using a sample of 24,201 respondents from the 2015 National Financial Capability Study (NFCS), structural equation modeling was used to analyze the relationships among the variables. The results indicated that payday loan use was associated with a series of consumers’ socio-psychological factors, including financial knowledge, perceived credit score, credit-card payment problems, and having emergency funds. The findings suggested that, to improve borrowing decisions and industry practices, discussions about consumers’ payday loan use and its underlying repayment problems should encompass policy intervention and institutional attention, rather than focusing on behavioral modification at the individual level alone.

Subjective financial knowledge, prudent behaviour and income

Purpose The purpose of this paper is to study how subjective and objective knowledge of finance, behaviour in managing personal finances and socio-economic status affect financial well-being. Design/methodology/approach The financial well-being score is constructed in quantitative financial literacy survey data from Estonia as the arithmetic mean of four statements on a five-point scale. Four hypotheses are tested in multiple regression analysis. Findings Subjective knowledge has a stronger relation with financial well-being than objective knowledge. Financial behaviour score and income level correlate with financial well-being. Research limitations/implications The paper contributes to literature on financial literacy, subjective financial knowledge and financial well-being. In future research, psychological factors and future orientated financial well-being should be included, and their relationship to subjective well-being could be analysed further. Practical implications The results highlight the importance of subjective knowledge and sound behaviour for improving financial well-being. Providers of financial services should address these more in the design of their services and communication. Social implications Policymakers developing national strategies for financial education need to address subjective financial knowledge for increasing financial well-being in society. Originality/value Knowledge, behaviour and subjective knowledge have not been used simultaneously in the analysis of financial well-being in Europe before.

Purposive and Unintentional Family Financial Socialization, Subjective Financial Knowledge, and Financial Behavior of High School Students

Using the family financial socialization theory, this study investigated the financial knowledge and behavior of high school students' contextualizing unintentional and purposive family financial socialization. The sample of 4,473 high school students were 51% females, 45% seniors, and ethnically diverse. A path analysis tested conceptual relationships between variables. Results indicated that the two unintentional socialization indicators were positively associated with subjective financial knowledge and financial behavior. Those indicators were also indirectly associated with financial behavior through knowledge. Student-earned income, a purposive indicator of socialization, was positively associated with behavior through knowledge. Exclusively obtaining money through parents was negatively associated with behavior through knowledge. Knowledge was positively associated with behavior.