2011 Outstanding AFCPE® Conference Paper: Development and Validation of a Financial Self-Efficacy Scale

Abstract

This study developed a 6-item Financial Self-Efficacy Scale for use by researchers, educators, counselors, and advisors. Bandura's concept of self-efficacy and Prochaska's Transtheoretical Model of Behavior Change provided the theoretical framework. Scale items were adapted from Schwarzer and Jerusalem's (1995) General Self-Efficacy Scale. Psychometrics were measured using a sample of 726 university employees. Alpha reliability was .76. One-way ANOVA compared self-efficacy scores to respondents' assessment of their investment sophistication. Factor analysis resulted in a coherent factor with loadings ranging from .574 to .759. In addition to providing researchers with a means to measure behavioral aspects of financial management, a financial self-efficacy scale can help educators and counselors better understand, guide, and motivate their students and clients.

Keywords: scale, self-efficacy, stages of change, Transtheoretical Model