money management skills for young adults

#Money management skills for young adults professional

Financial planning is a very important knowledge and skill considering that individuals live longer and have to save for their old age, when they are no longer working. It is in fact important not only to establish a long-term financial plan but also to know, and to have, financial alternatives in which to invest money or to save it.

#Money management skills for young adults professional

This concept not only concerns individual investors but also professional ones working in companies that manage money. For instance, inadequate financial behaviors can lead to temporary or chronic debts, inability to pay utility bills or filing for bankruptcy and such behaviors result from economic factors together with psychological ones.įinancial literacy has been defined as “the ability and confidence to use one’s own financial knowledge to make financial decisions” ( Huston, 2010, p. The undesirable short-, mid-, and long-term consequences of inadequate financial management behavior not only affect individuals, but also their household, and ultimately could produce a wide range of unwanted events on the entire society ( Fenton et al., 2016). Why are some people more efficient in their financial behaviors than others? Financial management is a complex set of behaviors and decisions that can change as a function of the importance and difficulty of implementing the behavior, as well as of people’s capabilities, skills, and opportunities to perform such behaviors. According to these results, interventions to improve financial behavior should focus on the combination of investment advice use and metacognitive strategies used by individuals to make financial decisions. The present study contributes to better understand how and when investment literacy drives well-informed and responsible financial behavior. The results reveal that employees with more investment advice use and characterized by high need for cognitive closure show a higher level of financial management behavior, in relation to both the urgency (seizing) of getting knowledge and the permanence (freezing) of such knowledge. A total number of 272 financially independent adults, under 40 years, completed questionnaires at three different times with 3-month intervals. This three-wave study aims to explore whether the impact of investment literacy on the financial management behavior is mediated by investment advice use and moderated by the need for cognitive closure. 3Department of Psychology, University of Bologna, Bologna, Italy.2Department of Business Economics and Accounting, Universidad Nacional de Educación a Distancia, Madrid, Spain.1Department of Social and Organizational Psychology, Universidad Nacional de Educación a Distancia, Madrid, Spain.Gabriela Topa 1* Montserrat Hernández-Solís 2 Salvatore Zappalà 3