Does Financial Literacy Reduce Money Stress?

Abstract

As advocates of financial literacy education, it is a hard pill to swallow when data show little impact on financial behaviours. Unfortunately, our expectations that university students with higher levels of financial literacy have reduced money management stress and good behaviours, leading to higher levels of financial wellbeing, were expunged. We did find, however, that being older and having higher levels of income contributed most significantly and consistently to explaining financial wellbeing. Proponents of financial literacy education should not lose hope but recognise limits to transferring knowledge and set goals based on evidence of what works.

Keywords: education, financial wellbeing, financial literacy, university students

JEL Classification: D1, G53, I22, I240