Familiarity with investment products drives better saving habits, challenging the notion that basic financial education is enough. This study highlights the importance of practical understanding over theoretical concepts in achieving financial success.
The article titled “More Than Knowledge: Consumer Financial Capability and Saving Behavior,” coauthored by Laura Núñez-Letamendia, Patricia Sánchez-Ruiz, and Ana Silva, was published in the International Journal of Consumer Studies in January 2025. It offers valuable insights into the factors shaping household saving behavior, challenging traditional perspectives on financial literacy.
Using a survey of 1,501 consumers, the research enhances the understanding of financial capability by analyzing diverse components such as financial knowledge, self-confidence, budgeting skills, and self-efficacy. The findings reveal:
- Knowledge of investment products (e.g., funds, stocks, bonds) plays a more significant role in driving saving behavior than understanding fundamental economic-financial concepts like interest rates, inflation, and diversification.
- Self-confidence in financial knowledge is more influential than actual financial knowledge.
- Budgeting skills are critical in predicting saving habits.
- Elements of the Theory of Planned Behavior, particularly self-efficacy, emerge as valid predictors of saving behavior.
These results highlight the need for a broader conception of financial capability—one that goes beyond traditional financial education to include practical skills, confidence building, and familiarity with investment opportunities.
This research has significant implications for policymakers, educators, and financial institutions. It suggests the necessity of rethinking financial education strategies to prioritize actionable knowledge and skills, empowering individuals to achieve better financial outcomes.
We invite you to read the full article and explore its implications for shaping financial literacy programs and policies: