140 research outputs found
Relations between young adultsâ knowledge and understanding, experiences, and information behavior in personal finance matters
Background: In Germany, general secondary education offers few opportunities for young adults to acquire knowledge and understanding of personal finance. Hence, apart from parentsâ influence as role models, important influences on young adultsâ financial knowledge and understanding likely include their personal experience with financial products and their behavior of informally seeking information about specific financial products.
Methods: In this paper, we investigate the relationships between these latter variables based on a sample of 1108 young adults from Germany, aged 17â25, beginning their studies in higher education. Knowledge and understanding of personal finance was assessed using the German adaptation of the US Test of Financial Literacy. In this paper, we focus on the dimension âBankingâ (covering financial investing, saving, using credit). In addition, we surveyed young adultsâ experience in basic personal finance matters (e.g., having a bank account, using a credit card, paying for rent) and their information behavior towards specific financial products (e.g., stocks, investment, retirement plans, and insurance).
Results: The data set was prepared through multiple imputation and analyzed using regression models. The results show clear correlations between knowledge and understanding in the dimension âBankingâ and both experience and information behavior in personal finance matters.
Conclusions: Our findings illustrate how important it is that young adults obtain experience with and actively inform themselves about financial products, particularly in countries such as Germany where personal finance is not taught extensively and systematically in school
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