Effective finance is necessary for financial well-being, including the well-being of people with low income. Effective finance means that individuals and families have beneficial access to financial services and have skills to manage these services. Drawing upon data on a national low-income sample (N = 1,473) from the 2016 National Financial Well-Being Survey, this study examines the relationships of financial access and skills with financial well-being. Both financial access and skills are statistically and positively 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).