Consumer Financial Capability and Financial Satisfaction

The purpose of this study was to examine associations between consumer financial capability and financial satisfaction. Consumer financial capability was measured by three sets of variables, perceived financial capability, financial literacy, and financial behavior. Using data from the 2009 US State-by-State Survey of Financial Capability, the results indicated the positive association between perceived financial capability and financial satisfaction. The findings suggested that desirable financial behavior increases while risky financial behavior decreases financial satisfaction. Subjective financial literacy was also found to contribute positively to financial satisfaction. The positive association between objective financial literacy and financial satisfaction was found in bivariate analyses but not in multivariate analyses. The results imply that to enhance consumer financial well-being, consumer financial education programs should emphasize action taking and encourage consumers to avoid risky financial behavior, engage in desirable financial behavior, and improve financial self-efficacy.