The Link Between Financial Confidence and Financial Outcomes Among Working-Aged Canadians

In an effort to add to the existing literature and begin to more clearly understand these psychological underpinnings of financial behaviour, this study makes use of microdata from the 2014 Canadian Financial Capability Survey to examine the links between an objective measure of financial knowledge, a subjective measure of financial confidence, and a range of financial outcomes among working-aged [...] These findings point to an urgent need to improve the delivery of financial literacy programs and enhance the financial well-being of Canadians.1 The Government of Canada is leading the development and implementation of the National Strategy for Financial Literacy – Count me in, Canada providing individuals and families with the necessary tools to make responsible financial decisions. [...] In an effort to add to the existing literature and begin to more clearly understand the psychological underpinnings of financial behaviour, the first objective of this research project is to examine the determinants of a range of financial outcome measures from the 2014 Canadian Financial Capability Survey (CFCS). [...] Investigating the independent and joint effects of confidence and knowledge on financial outcomes will allow us to begin to explore the practical implications with respect to the effective design and targeting of financial education interventions, supporting the Government’s commitment to raising the financial literacy of Canadians. [...] This is followed by a brief description of the dataset and measures of financial confidence and knowledge, the methodology and results of the descriptive analysis, and finally a detailed presentation of the methodology and results of the multivariate analysis.