Citation Context

...maximize the chances of life and enable fulfilling lives (Johnson & Sherraden, 2007). Financial capability is a construct that goes beyond financial literacy, whereby it is not just refer to knowledge or understanding of financial concepts, but on how people manage their resources and make financial decisions (FINRA Investor Education Foundation, 2009). In the United Kingdom, it is conceptualized as behaviors and attitudes that fall within the four domains of behavior which are managing money, planning ahead, choosing products, and staying informed (Atkinson, McKay, Collard, & Kempson, 2007). Johnson and Sherraden (2007) and Sherraden (2010) extended this definition of financial capability by including access to financial services and asset building opportunities. The financial capability approach suggests that children and youth should learn about financial management as well as the financial world at the same time in order to truly enhance well-being. An Overview of Studies Conducted on Financial Capability of Young People In various countries, the concept of financial capability has been clarified through domains that help in explaining more about how people are supposed to be financially capable and those...

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...cs of those who lack financial capability. The conclusions indicates that younger people, those on low incomes, those with children and those with poor levels of education, literacy and numeracy are most likely to have low levels of financial capability (Financial Services Authority, 2006; Atkinson et al., 2006; Atkinson et al., 2007). Increased age and experience contributes to greater financial capability scores in most of the domains. However, it should be noted that individuals may score more highly in some domains than in others (Financial Services Authority, 2006; Atkinson et al., 2006; Atkinson, 2007; Sinclair et al., 2009). Similarly, Atkinson et al. (2007), using the Financial Capability Survey, found that the least financially capable were younger, with children who were struggling on low incomes and were disorganized. The next least capable groups were low-income, younger, single people, using few products, plus the early middle-aged, who used few products and did some planning. From the evidence in the Financial Capability Survey, the Thoresen Review and Atkinson et al. (2007), it can be summarized that younger people (under 45 years), women, married or living with a partner, have lo...

Citation Context

...ability and opportunity to act in ways that maximize the chances of life and enable fulfilling lives (Johnson & Sherraden, 2007). Financial capability is a construct that goes beyond financial literacy, whereby it is not just refer to knowledge or understanding of financial concepts, but on how people manage their resources and make financial decisions (FINRA Investor Education Foundation, 2009). In the United Kingdom, it is conceptualized as behaviors and attitudes that fall within the four domains of behavior which are managing money, planning ahead, choosing products, and staying informed (Atkinson, McKay, Collard, & Kempson, 2007). Johnson and Sherraden (2007) and Sherraden (2010) extended this definition of financial capability by including access to financial services and asset building opportunities. The financial capability approach suggests that children and youth should learn about financial management as well as the financial world at the same time in order to truly enhance well-being. An Overview of Studies Conducted on Financial Capability of Young People In various countries, the concept of financial capability has been clarified through domains that help in explaining more about how people are supposed to b...

Citation Context

...ions of financial literacy tend to emphasize on knowledge of basic financial concepts such as the working of interest compounding, the difference between nominal and real values, and the basics of risk diversification (Lusardi, 2008). By contrast, financial capability is generally understood to be a concept with three different components which are 1) financial knowledge and understanding, 2) financial skills and competence and 3) financial responsibility. These three components of capability used in practice when consumers make decisions and choices about how to allocate financial resources (Leskinen and Raijas, 2005). Apart from that, we can assume that there are various levels and expressions involve in financial capability. These are based on certain demographic consumer characteristics such as sex, age, education and as well as values, attitudes or habits. Phase of the consumer’s life and the immediate environment they live in will shape their financial capability. In addition, the macro environment such as community and society has both direct and indirect influences on consumers’ financial capability. Scholars, policy makers and educators recently introduced the concept of financial capability to des...