2014 Conference

The purpose of this study is to examine age differences in financial capability. Financial capability is measured by three sets of variables, objective and subjective financial literacy, desirable and risky financial behaviors and perceived financial capability. Financial capability is expected to increase with age. Specifically, we expect older consumers would demonstrate higher levels of both objective and subjective financial literacy, more desirable financial behaviors, fewer risky financial behaviors and a higher level of perceived financial capability. Data from the 2012 National Financial Capability Study was used to examine the associations between age groups and financial capability variables. One-way ANOVA were used to examine age differences in financial capability variables. Then multiple regressions were used to examine age differences after control variables were used. The results indicate that age differences in five financial capability variables were shown different patterns. After controlling for demographic, life cycle, economic and other characteristics, young adults aged 18-24 had lowest scores of objective financial literacy, subjective financial literacy, and perceived financial capability. Young adults (age 18-35) had more risky financial behaviors compared to their older counterparts. The results have implications for consumer educators to provide effective financial education for all age groups.