Financial Capability Financial Inclusion Working Paper

Effective Finance to Increase Financial Well-Being for Low-Income Families: Empirical Examination and Policy Implications

To increase financial well-being, effective finance is necessary for all individuals and families, including those with low incomes. Effective finance means that individuals and families have beneficial access to financial services, and have skills to manage these services to promote their overall financial well-being. We select a national low-income sample (N = 1,473) from the 2016 National Financial Well-Being Survey and examine the relationships of financial access and skills with financial well-being. Both financial access and skills are statistically and positive associated with financial well-being. The interactive effects between financial access and skills are partially supported. In addition, results show a partial mediation from financial access to financial well-being through financial skills. Public policies have potential to support effective finance for low-income families, and should become more proactive in creating effective finance for all.

Support for this publication comes from the Kauffman Foundation (Grant No. 201806-4478).

Project: Financial Capability & Asset Building (FCAB)


Huang, J., Sherraden, M. S., Sherraden, M., & Johnson, L. (2021). Effective finance to increase financial well-being for low-income families: Empirical examination and policy implications (CSD Working Paper No. 21-09, submitted for publication). Washington University, Center for Social Development.