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Financial education and financial satisfaction: Financial literacy, behavior, and

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 Financial Education and Financial Satisfaction:

Financial Literacy, Behavior, and Capability as Mediators

Abstract

Purpose: To investigate roles of financial literacy, financial behavior, and financial capability as
mediating factors between financial education and financial satisfaction.
Methodology: The data is from the 2012 National Financial Capability Study, a large national
dataset with rich information on financial literacy related variables. Mediation analyses are used
to answer research questions.
Findings: Financial education may affect financial satisfaction, a measure of subjective financial
well-being, through financial literacy, financial behavior, and financial capability variables.
Results show that subjective financial literacy, desirable financial behavior, and a financial
capability index are strong mediators between financial education and financial satisfaction.

Research limitations: The study has used cross sectional data that can only document
associations between financial education and satisfaction and several mediators between them.
Future research could use relevant longitudinal data to verify multiple benefits of financial
education and support current findings.
Practical implications: The findings have implications for financial service professionals to
take advantages of multiple benefits of financial education in content acquisition, confidence in
knowledge and ability, and action taking when they communicate with their clients.
Social implications: Policy makers on consumer financial education may use the information to
advocate and promote effective education programs to improve consumer financial wellbeing.

Originality/value: This study is the first of this kind to examine the association between
financial education and financial satisfaction and several financial capability variables as
mediating factors.
Paper type: Research paper.

Key words: financial education, financial literacy, financial behavior, financial capability,
financial wellbeing, financial satisfaction
 Introduction

In recent decades, consumer financial education draws attention of consumer financial

policy makers, practitioners, and researchers (CFPB, 2015; FLEC, 2012; PACFC, 2013). Raising

financial literacy and encouraging desirable financial behaviors are assumed to enhance

consumer financial capability and improve consumer welfare (Atkinson et al., 2006; Huhmann

and McQuitty, 2009; Mouna and Jarboui, 2015). Financial education is assumed to improve

financial literacy, motivate desirable financial behaviors, and enhance financial wellbeing among

consumers (Lusardi and Mitchel, 2014). A recent meta-analysis has examined many studies

about financial education and literacy on financial behaviors and found mixed evidence

(Fernandes et al., 2014). However, new studies continue to show that financial education has

positive effects on consumer financial behavior and welfare (Ambuehl et al., 2014; Brown et al.,

2014; Wagner, 2015; Xiao and O’Neill 2016). Much previous research focuses on examining

associations between financial education and financial literacy or associations between financial

literacy and financial behavior, while to our knowledge, no previous research examines

associations between financial education and financial satisfaction, a subjective measure of

financial wellbeing. This study attempts to fill out this gap by investigating associations between

financial education and financial satisfaction using a large national data set, the 2012 National

Financial Capability Study. The purpose of this study is to examine whether financial education

contributes to financial satisfaction directly or indirectly through mediating factors such as

financial literacy, behavior, and capability variables.

 Conceptual Framework, Previous Research, and Hypotheses

Financial literacy has been defined as the level of financial knowledge and the ability to

apply the knowledge to improve financial statuses (Lusardi and Mitchell, 2014; Huhmann 2014).

In the literature, financial literacy and financial capability are at times used exchangeably, both

referring to the ability to apply certain level of financial knowledge and perform desirable

financial behaviors to achieve financial wellbeing (Atkinson et al., 2006; Xiao et al., 2014b).

Lusardi and Mitchell (2014) have developed a life-cycle saving model that addresses the role of

financial literacy. Under the traditional utility framework, they have incorporated several factors

such as borrowing constraints, mortality risk, demographic factors, stock market returns, and

earnings and health shocks in the theoretical model and made simulations using plausible

parameters. This model predicts that financial literacy is endogenously determined over the life

cycle. Consumers invest in financial knowledge to the point where their marginal time and

money costs of doing so are equated to their marginal benefits. These predictions suggest that

consumers who receive financial education would increase their ability to manage their money

and perform financially better than their counterparts who do not receive financial education.

Huhmann (2014) has developed a conceptual model to identify determinants of financial

literacy and describe the mechanism for developing financial literacy. In this model, financial

literacy has three components: capacity, prior knowledge, and proficiency. “Capacity” refers to a

person’s basic cognitive ability, “prior knowledge” refers to existing financial knowledge, and

“proficiency” refers to skillful applications of financial knowledge to achieve desirable financial

outcomes. In this conceptual model, financial education is considered as one of the determinants

of financial literacy. Financial education is considered as a factor affecting consumer

socialization that in turn enhances three components of financial literacy. In addition, Huhmann
also identifies several psychological factors influencing development of financial literacy. Based

on this model, financial education would contribute to financial literacy through enhancing

consumer ability to learn, obtain and apply financial knowledge.

In empirical studies, financial capability is measured by researchers through various

approaches such as by a set of financial behaviors (Atkinson et al., 2006, 2007; Lusardi, 2011), a

combination of financial behaviors and outcomes (Taylor, 2011), and a combination of financial

literacy, behavior, and perceived capability (Xiao et al., 2014b; Xiao et al., 2015).

Previous research shows that financial education increases financial literacy and

encourages desirable financial behaviors among consumers (Bayer et al. 2009; Bernheim et al.,

2001; Bernheim and Garrett, 2003; Danes et al., 1999; Joo, and Grable, 2005; Kim et al., 2005;

Lusardi and Mitchelli, 2007; Lyons, 2004; Tennyson and Nguyen, 2001). Research also shows

that improved financial literacy and financial behaviors benefit both general and special

populations (Chen and Volpe, 1998; Lazarus et al., 2002; Lusardi and Mitchell, 2005, 2007,

2008; Prowse, 1990; Van Rooij et al., 2011). More recent studies also provide supporting

evidence for benefits of financial education for consumers (Brown et al. 2014; Robb and

Woodyard, 2011; Wagner 2015; Walstad et al., 2010; Xiao et al., 2012; Xiao et al., 2014a; Xiao

and O’Neill, 2016; Also see Lusardi and Mitchel 2014 for a review of relevant empirical

studies). Several research reviews conclude that financial education may have limited effects on

financial literacy and financial behavior (Gale and Levine, 2011; Collins and O’Rourke, 2010;

Fernandes et al. 2014; Hastings et al., 2012). However, to our knowledge, no previous research

has examined financial education and financial wellbeing directly, or indirectly through financial

literacy, behavior, and perceived capability as mediating factors.

 Financial wellbeing can be measured by both objective and subjective indicators.

Objective financial wellbeing is often measured by income and wealth related factors and

subjective financial wellbeing is measured by perceptions and evaluations of financial statuses

(Xiao, 2015). Subjective measures of financial wellbeing refer to consumer self-perceived

financial status. One subjective measure of financial wellbeing integrates financial distress and

other financial indicators into one scale (Prawitz et al., 2006). Another commonly used

subjective measure of financial wellbeing is financial satisfaction, usually in the format of a

Likert-type scale. Financial satisfaction can be measured in either one-item indicator or multiple

indicators (Joo and Grabble, 2006). Previous research has explored factors associated with

financial satisfaction such as potential effects of various income definitions (Hsieh, 2004),

income expectation (Vera-Toscano et al. 2006), perceived income adequacy (Grable et al. 2012),

assets and debts (Hansen et al., 2008), industry sectors (Ferrer-i-Carbonell and Gërxhani, 2011),

and household characteristics (Seghieri et al. 2006). Previous research has also examined links

between financial capability related variables and financial satisfaction (Xiao et al., 2009; Xiao et

al., 2014b).

In this study, we define financial education as any form of formal education provided in

various settings such as high school, college and workplace. Based on the theory of life cycle

saving (Lusardi & Mitchell, 2014), consumers decide to take financial education based on their

own cost-benefit analyses and financial education would benefit their later life outcomes. Based

on the conceptual framework of Huhmann (2014), financial education contributes to financial

literacy and behavior. In this study, we assume exposure of financial education would contribute

to consumer financial capability. Research shows that the exposure of financial education

contributes to consumer financial capability (Xiao and O’Neill, 2016). As mentioned before, the
terms of financial literacy and financial capability have been used either exchangeably or to

define two different constructs. In this study, we define financial capability as the ability and

confidence to use basic financial knowledge and perform desirable financial behaviors for

achieving financial wellbeing Our definition is in line with more current definitions of financial

capability used previously and also similar to more comprehensive definitions of financial

literacy that includes more than just financial knowledge.

Financial capability is related to financial literacy and financial behavior, both can be

measured with objective and subjective indicators. Following Xiao, et al. (2015), these indicators

include objective financial literacy, subjective financial literacy, desirable financial behavior,

perceived financial capability, and a financial capability index. Financial satisfaction is defined

as a subjective measure of financial wellbeing that is associated with financial capability (Xiao et

al., 2014b). The focus of this study is to examine if financial education contributes to these

financial capability factors and then these financial capability factors contribute to financial

satisfaction. This study is important since there are controversies about effects of financial

education on financial literacy, behavior, and capability. This study aims to demonstrate that

financial education may have both direct and indirect effects on financial wellbeing and provides

multiple benefits for consumers who receive it. We recognize that studies on associations

between financial literacy and behavior are important but they are beyond the scope of this study.

Based on the literature discussed above and previous theoretical models of financial literacy

(Huhmann, 2014; Huhmann and McQuitty, 2009), we propose the conceptual framework shown

in Figure 1 and test this framework's relationships in the following hypotheses: :

H1: Financial education is associated with objective financial literacy and objective

financial literacy in turn is associated with financial satisfaction.

 H2: Financial education is associated with subjective financial literacy and subjective

financial literacy in turn is associated with financial satisfaction.

H3: Financial education is associated with desirable financial behavior and desirable

financial behavior in turn is associated with financial satisfaction.

H4: Financial education is associated with perceived financial capability and perceived

financial capability in turn is associated with financial satisfaction.

H5: Financial education is associated with the financial capability index and the financial

capability index in turn is associated with financial satisfaction.

This study contributes to the literature in two aspects. It enriches the literature of

financial literacy by examining associations between financial education and financial

satisfaction directly and also indirectly through several financial capability variables as

mediators. It also expands the literature of financial satisfaction by exploring one additional

explaining factor, financial education.

Method

Data

Data used in this study is from the 2012 National Financial Capability Study (NFCS).

In consultation with the U.S. Department of the Treasury and the President’s Advisory Council

on Financial Literacy, the FINRA Investor Education Foundation commissioned the 2012

study that included 25,509 American adults (roughly 500 per state, plus the District of

Columbia) and 1,000 military service members through online surveys (FINRAIEF, 2013).

The data set is available for public use from the website of the FINRA Investor Education
Foundation. Descriptive statistics of the sample including financial literacy, behavior, and

capability variables can be found in the foundation report (FINRAIEF, 2013). The NFCS

surveys has been widely used and validated as a representative sample of the American

population by researchers in personal finance, consumer economics, and other social science

fields.

Variables

Table 1 presents specifications of the variables used in this study including original

wordings of several variables. The dependent variable is financial satisfaction that is a Likert

scale ranging from 1-10, in which 10 means very financially satisfied. Financial

literacy/capability variables include four specific measures and one index. The four specific

measures are objective financial literacy, subjective financial literacy, desirable financial

behavior, and perceived financial capability. Objective financial literacy is the quiz score of

five financial knowledge questions ranging from 0 to 5. Subjective financial literacy is a self-

assessment of financial knowledge with a range of 1-7 (1=very low, 7=very high). Desirable

financial behavior is the number of good financial behaviors performed and reported by the

respondents with a range of 0-4 (0=no behavior is performed, 4=all four behaviors are

performed). Subjective financial capability is a self-assessment of money management ability

with a range of 1-7 (1=very low, 7=very high). The financial capability index is constructed by

summing up Z scores of these four specific literacy, behavior, and capability measures.

Financial education is a binary variable indicating if having received any formal financial

education acquired in high school, college, place of employment or from the military. This

definition of financial education has been used in previous research (Xiao and O’Neill, 2016).

The study also includes several control variables: gender, age, marital status, education, and
presence of dependent children, which are used in previous research (Robb and Woodyard,

2011; Xiao and O’Neill, 2016).

For three variables, financial satisfaction, subjective financial literacy, and perceived

financial capability, some respondents have reported “Don’t know” or “Prefer not to say” and

these observations are substituted by means of the variables. For financial satisfaction, 491

cases, for subjective financial literacy, 675 cases, and for perceived financial capability, 363

cases are treated this way. For robustness checks, additional analyses are performed using

casewise deletion of the data – with “Don’t know” or “Prefer not to say” coded as missing –

and the results show minimal changes on coefficient of variables of interest and no changes in

sign or significance (results are not reported here but available upon requests).

Data Analyses

Following an approach described by Baron and Kenny (1986) and used by previous

research (Perry, 2005; Xiao and Wu, 2008), mediating analyses are conducted. For example, to

examine the mediating effect of objective financial literacy, three multiple linear regression

models are used:

1) Objective financial literacy = f (financial education, control variables);

2) Financial satisfaction = f (financial education, control variables);

3) Financial satisfaction = f (financial education, control variables, objective financial

literacy).

The procedure suggested by Baron and Kenny (1986) has three steps. First, if the

objective financial literacy variable is the mediator, other independent variables should show
associations with it (Model 1). Second, other independent variables without the objective

financial literacy variable should show associations with the outcome variable (i.e., the financial

satisfaction variable) (Model 2). Third, the objective financial literacy variable, entered as an

additional independent variable, should have a larger effect than other independent variables on

the outcome variable (Model 3). The same procedure is also used for other mediating variables

such as subjective financial literacy, desirable financial behavior, perceived financial

capability, and the financial capability index.

Results and Discussions

Table 2 presents the results testing if objective financial literacy is a mediating factor

between financial education and financial satisfaction. Model 1 shows that financial education is

strongly associated with objective financial literacy. However, comparing model 2 and 3,

objective financial literacy has contributed to financial satisfaction significantly but the effect

size is smaller than that of financial education, suggesting objective financial literacy may not be

a strong mediating factor between financial education and financial satisfaction. This finding

supports previous research that shows positive effect of financial education on financial literacy

(e.g. Danes at el., 1999; Lyons, 2004; Joo and Grable, 2005; Kim et al., 2005; Robb and

Woodyard, 2011; Walstad et al., 2010; Xiao et al., 2014). However, the effect of objective

literacy seems limited compared to the effect of financial education, not supporting H1 and

implying that financial education may have greater effects on other mediating factors for

improving financial wellbeing.

The result of subjective financial literacy variable as a potential mediating factor between

financial education and financial satisfaction is presented in Table 3. The result of model 1
indicates that financial education is strongly associated with subjective financial literacy.

Comparing the results of model 2 and 3, subjective financial literacy is not only significantly but

also substantially associated with financial satisfaction, indicated by the greater effect size of

subjective financial literacy than that of financial education. The finding suggests that subjective

financial literacy is a strong mediator between financial education and financial satisfaction,

supporting H2. Previous research shows that objective and subjective financial literacy variables

may have differential roles in contributing to financial behavior (Robb and Woodyard, 2011;

Xiao et al., 2011). Evidence from this study implies that financial education may enhance

subjective financial literacy more effectively than objective financial literacy, which in turn

contributes to financial wellbeing.

Desirable financial behavior seems a strong mediator between financial education and

financial satisfaction demonstrated in Table 4. In model 1, financial education is strongly

associated with desirable financial behavior. Comparing model 2 and 3, financial behavior’s

effect size is much greater than that of financial education. The finding suggests that financial

education has both direct and indirect effects on financial satisfaction, supporting H3. The

finding is consistent with previous research in which desirable financial behavior is positively

and undesirable financial behavior is negatively associated with financial satisfaction (Xiao et

al., 2014b).

Perceived financial capability seems a partial mediator between financial education and

financial satisfaction shown in Table 5. The result of model 1 indicates that financial education is

significantly associated with perceived financial capability. Results of model 2 and 3 suggest that

the effect size of perceived financial capability is similar to that of financial education,

suggesting both financial education and perceived financial capability contribute to financial
satisfaction, partially supporting H4. Perceived financial capability can be considered as

financial self-efficacy. Self-efficacy is important to help people control their life by taking

desirable actions (Bandura 1982). Self-efficacy may also be an important factor contributing to

financial literacy (Huhmann 2014). Financial self-efficacy has been shown to help consumers

manage their money to achieve financial wellbeing (Lown, 2011). The finding here implies that

financial education helps enhance financial self-efficacy that in turn improves financial

wellbeing.

To examine the overall effect of financial literacy, behavior, and perceived capability on

financial satisfaction, an index of financial capability is constructed and tested as a mediator. The

finding in Table 6 suggests that the financial capability index is a strong mediator. First, financial

education is strongly associated with the financial capability index in model 1. Second, financial

education is strongly associated with financial satisfaction when only control variables are

included in model 2. Third, when financial capability index is entered to model 3, it shows a

strong effect on financial satisfaction while the effect of financial education has disappeared. As

a result, the financial capability index acts as a full mediator between the two variables of

interest, providing partial supporting evidence for H5 showing positive contributions of financial

education to financial wellbeing. A possible interpretation of the full mediation finding is that

consumers that display high levels of financial capability may not need to rely on formal

financial education to achieve financial satisfaction while financial education will be particularly

beneficial to consumers with low financial capability.

Conclusion and Implications

 This study attempts to examine whether financial education has either direct or indirect

potential effect on financial satisfaction, a measure of subjective financial wellbeing. Objective

financial literacy, subjective financial literacy, desirable financial behavior, perceived financial

capability, and the financial capability index are used as potential mediating variables between

financial education and financial satisfaction. Using a large nationally representative dataset, the

results show that subjective financial literacy, desirable financial behavior, and the financial

capability index are strong mediators while objective financial literacy and perceived financial

capability are weaker mediators between financial education and financial satisfaction. The

results suggest that financial education has multiple benefits for improving financial wellbeing

such as facilitating knowledge acquisition, enhancing confidence in knowledge and ability, and

encouraging action taking. The findings suggest that to improve consumer financial wellbeing,

financial education may be more effective in helping consumers raise confidence in financial

knowledge and engage in desirable financial behaviors than in obtaining objective knowledge.

This study has some limitations. The first is that several variables of interest such as

financial education and financial satisfaction are single-item measures. While financial education

is based on receiving formal financial education and include a follow-up question on the source

of the education, respondents understanding of financial education may vary considerably. For

some, formal financial education involves actual classroom training while other might be relying

on one-on-one meetings with an advisor when answering this question. More details on the

source of formal financial education such as duration of training, type of curriculum, etc. would

strengthen the validity of this measurement.

The question on financial satisfaction may be affected by a number of other factors such

as context, timing, emotions, and recent events. For instance, respondents might rate themselves
higher in financial satisfaction after getting a raise at work or might rate themselves lower after

paying income taxes. Satisfaction has also a comparison component where we judge our well-

being in relation to others. A measurement of financial satisfaction that includes multiple items

being asked at different time points would further ensure the validity of this construct. The

second limitation is we only used mediation analyses. A more sophisticated approach, the

structural equation modeling, could be used when information of multiple-item measures of key

variables is available. These issues could be addressed in future research.

Keeping these limitations in mind, we discuss implications for financial advisors and

educators who work with consumers. Consumer financial educators provide financial education

programs funded by governmental or nongovernmental organizations. Measuring the

effectiveness of these types of programs solely based on financial knowledge acquisition might

fail to reveal the full range of benefits provided by financial education and prevent further

funding. Perhaps a more comprehensive evaluation of financial education should include both

objective and subjective measures of financial literacy, behavior, capability, and satisfaction to

better determine the true impact of these programs on their target audiences.

Many financial advisors already provide informal financial education for their clients

when offering long term financial planning, discussing investment or loan options, and

counseling on debt issues. These findings have implications for them to improve effectiveness of

their educational efforts during fact-finding meetings. They may beware of multiple benefits of

financial education and design and implement targeted education activities for clients with

various needs. The findings suggest financial education is effective on raising consumer

confidence in financial knowledge and encouraging consumers to engage in desirable financial

behaviors that may be used for developing and enhancing relationships between clients and

advisors.

Advisors and educators may take advantage of these findings and through financial

education raise consciousness of the importance of financial literacy and encourage clients to

take actions in desirable directions (Xiao et al. 2004). The research results suggest that financial

education could do better in improving actual knowledge acquisition and raising levels of

perceived financial capability. Advisors and educators may tailor education material for clients at

various lifecycle stages for different needs of financial information and knowledge to facilitate

their financial decision making and enhance financial wellbeing. For example, recent college

graduates reporting to their first professional job may receive information about retirement

savings to help them make their first long term saving decisions for company sponsored defined

contribution retirement plans. Similar approaches can also be used to assist consumers in making

better decisions when they first buy a house or review their banking or insurance needs.

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Table 1
Variable Specifications
Variable Attribute
Financial capability
Objective financial literacy 0-5, the quiz score of five financial literacy questions,
in which 0 means no correct answer is obtained and 5
means all answers are correct. The five knowledge
questions are about interest rate, inflation, bond,
mortgage, and stock. The original financial literacy
variables (m6-m10) were recoded to binary variables
in which 1=correct answer, 0=otherwise and then the
new variables were summed to form the score.
Subjective financial literacy “On a scale from 1 to 7, where 1 means very low and
7 means very high, how would you assess your
overall financial knowledge?” 1-very low, 7-very
high
Desirable financial behavior The number of desirable financial behaviors, ranged
from 0-4.
Perceived financial “I am good at dealing with day-to-day financial
capability matters, such as checking accounts, credit and debit
cards, and tracking expenses” 1-strongly disagree, 7-
strongly agree
Financial capability index A sum of Z scores of objective financial literacy,
subjective financial literacy, desirable financial
behavior, and perceived financial capability
variables.
Focal Variable
Financial satisfaction 1-not at all satisfied, 10-extremely satisfied
Received financial education 1=yes, 0=no
Control variables
Age group 6 age groups, age 18-24 is used as reference category
in regressions.
Being male (vs. female) 1=male, 0=female
Education level 1-some college or higher, 0=other
Being married 1=married, 0=not married
Having dependent children 1=yes, 0=no
Note: The four desirable financial behaviors are spending within income, saving for emergency,
checking credit reports, and calculating retirement needs. All of these variables are binary
variables that are appropriately recoded from corresponding variables from the original data set.
Table 2 OLS Regressions: Objective Financial Literacy as the Meditating Factor

(Model 1) (Model 2) (Model 3)

Objective Financial Financial
Financial Literacy Satisfaction Satisfaction
b/se b/se b/se
Financial Education 0.42*** 0.44*** 0.42***
(0.02) (0.04) (0.04)

Female (vs. Male) -0.51*** -0.37*** -0.34***

(0.02) (0.03) (0.03)

Married 0.30*** 0.95*** 0.93***

(0.02) (0.04) (0.04)

Some College or More 0.80*** 0.58*** 0.53***

(0.02) (0.04) (0.04)

Dependent Child(ren) -0.09*** -0.40*** -0.39***

(0.02) (0.04) (0.04)

Age 18-24 (ref. cat.)

Age 25 to 34 0.29*** -0.19** -0.21**

(0.03) (0.07) (0.07)

Age 35 to 44 0.61*** -0.46*** -0.50***

(0.03) (0.07) (0.07)

Age 45 to 54 0.81*** -0.59*** -0.65***

(0.03) (0.07) (0.07)

Age 55 to 64 0.95*** -0.21** -0.27***

(0.03) (0.07) (0.07)

Age 65 or older 1.12*** 0.72*** 0.64***

(0.03) (0.07) (0.07)

Objective Fin. Literacy 0.06***

(0.01)

Constant 1.83*** 4.68*** 4.56***

(0.03) (0.06) (0.07)
2
r 0.23 0.09 0.09
N 25,509 25,509 25,509
* p < .05. ** p < .01. *** p <. 001. Ref. cat. Refers to reference category.
Table 3 OLS Regressions: Subjective Financial Literacy as the Meditating Factor

(Model 1) (Model 2) (Model 3)

Subjective Financial Financial
Financial Literacy Satisfaction Satisfaction
b/se b/se b/se
Financial Education 0.42*** 0.44*** 0.11**
(0.02) (0.04) (0.04)

Female (vs. Male) -0.51*** -0.37*** -0.25***

(0.02) (0.03) (0.03)

Married 0.30*** 0.95*** 0.80***

(0.02) (0.04) (0.04)

Some College or More 0.80*** 0.58*** 0.42***

(0.02) (0.04) (0.04)

Dependent Child(ren) -0.09*** -0.40*** -0.42***

(0.02) (0.04) (0.04)

Age 18-24 (ref. cat.)

Age 25 to 34 0.29*** -0.19** -0.28***

(0.03) (0.07) (0.07)

Age 35 to 44 0.61*** -0.46*** -0.57***

(0.03) (0.07) (0.07)

Age 45 to 54 0.81*** -0.59*** -0.70***

(0.03) (0.07) (0.06)

Age 55 to 64 0.95*** -0.21** -0.42***

(0.03) (0.07) (0.07)

Age 65 or older 1.12*** 0.72*** 0.32***

(0.03) (0.07) (0.07)

Subjective Fin. Literacy 0.67***

(0.01)

Constant 1.83*** 4.68*** 1.57***

(0.03) (0.06) (0.09)
2
r 0.23 0.09 0.17
N 25,509 25,509 25,509
* p < .05. ** p < .01. *** p <. 001. Ref. cat. Refers to reference category.
Table 4 OLS Regressions: Desirable Financial Behavior as the Meditating Factor

(Model 1) (Model 2) (Model 3)

Desirable Financial Financial Financial
Behavior Satisfaction Satisfaction
b/se b/se b/se
Financial Education 0.40*** 0.44*** 0.08*
(0.02) (0.04) (0.04)

Female (vs. Male) -0.11*** -0.37*** -0.28***

(0.01) (0.03) (0.03)

Married 0.35*** 0.95*** 0.63***

(0.02) (0.04) (0.03)

Some College or More 0.52*** 0.58*** 0.11**

(0.01) (0.04) (0.04)

Dependent Child(ren) -0.07*** -0.40*** -0.33***

(0.02) (0.04) (0.04)

Age 18-24 (ref. cat.)

Age 25 to 34 0.20*** -0.19** -0.37***

(0.03) (0.07) (0.07)

Age 35 to 44 0.18*** -0.46*** -0.63***

(0.03) (0.07) (0.07)

Age 45 to 54 0.24*** -0.59*** -0.81***

(0.03) (0.07) (0.06)

Age 55 to 64 0.46*** -0.21** -0.62***

(0.03) (0.07) (0.06)

Age 65 or older 0.65*** 0.72*** 0.13*

(0.03) (0.07) (0.07)

Desirable Fin. Beh. 0.90***

(0.01)

Constant 0.80*** 4.68*** 3.96***

(0.02) (0.06) (0.06)
2
r 0.14 0.09 0.22
N 25,509 25,509 25,509
* p < .05. ** p < .01. *** p <. 001. Ref. cat. Refers to reference category.
Table 5 OLS Regressions: Perceived Financial Capability as the Meditating Factor

(Model 1) (Model 2) (Model 3)

Perceived Financial Financial Financial
Capability Satisfaction Satisfaction
b/se b/se b/se
Financial Education 0.33*** 0.44*** 0.34***
(0.02) (0.04) (0.04)

Female (vs. Male) 0.00 -0.37*** -0.38***

(0.02) (0.03) (0.03)

Married 0.20*** 0.95*** 0.89***

(0.02) (0.04) (0.04)

Some College or More 0.38*** 0.58*** 0.46***

(0.02) (0.04) (0.04)

Dependent Child(ren) -0.10*** -0.40*** -0.37***

(0.02) (0.04) (0.04)

Age 18-24 (ref. cat.)

Age 25 to 34 0.20*** -0.19** -0.25***

(0.04) (0.07) (0.07)

Age 35 to 44 0.34*** -0.46*** -0.57***

(0.04) (0.07) (0.07)

Age 45 to 54 0.44*** -0.59*** -0.74***

(0.04) (0.07) (0.07)

Age 55 to 64 0.66*** -0.21** -0.42***

(0.04) (0.07) (0.07)

Age 65 or older 0.83*** 0.72*** 0.45***

(0.04) (0.07) (0.07)

Perceived Fin. Cap. 0.32***

(0.01)

Constant 4.86*** 4.68*** 3.13***

(0.04) (0.06) (0.08)
2
r 0.06 0.09 0.12
N 25,509 25,509 25,509
* p < .05. ** p < .01. *** p <. 001. Ref. cat. Refers to reference category.
Table 6 OLS Regressions: Financial Capability Index as the Meditating Factor

(Model 1) (Model 2) (Model 3)

Financial Financial Financial
Capability Index Satisfaction Satisfaction
b/se b/se b/se
Financial Education 1.22*** 0.44*** -0.04
(0.04) (0.04) (0.04)

Female (vs. Male) -0.59*** -0.37*** -0.14***

(0.03) (0.03) (0.03)

Married 0.80*** 0.95*** 0.63***

(0.03) (0.04) (0.03)

Some College or More 1.42*** 0.58*** 0.02

(0.03) (0.04) (0.04)

Dependent Child(ren) -0.17*** -0.40*** -0.33***

(0.04) (0.04) (0.04)

Age 18-24 (ref. cat.)

Age 25 to 34 0.60*** -0.19** -0.42***

(0.06) (0.07) (0.07)

Age 35 to 44 0.91*** -0.46*** -0.82***

(0.06) (0.07) (0.07)

Age 45 to 54 1.15*** -0.59*** -1.05***

(0.06) (0.07) (0.06)

Age 55 to 64 1.72*** -0.21** -0.88***

(0.06) (0.07) (0.07)

Age 65 or older 2.30*** 0.72*** -0.19**

(0.06) (0.07) (0.07)

Financial cap. index 0.39***

(0.01)

Constant -2.46*** 4.68*** 5.64***

(0.05) (0.06) (0.06)
2
r 0.24 0.09 0.20
N 25,509 25,509 25,509
* p < .05. ** p < .01. *** p <. 001. Ref. cat. Refers to reference category.
 Figure 1: Conceptual Framework between Financial Education, Financial Capability, and

Financial Satisfaction

Direct Effects

Objective financial
literacy

Subjective financial
Financial literacy Financial
Education Satisfaction
Desirable financial
behavior

Perceived financial
capability

Financial capability index

Indirect Effects

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