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

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).

Project: Financial Capability & Asset Building (FCAB)


Huang, J., Sherraden, M., Sherraden, M. S., & Johnson, L. (2022). Effective finance to increase financial well-being for low-income families: Empirical examination and policy implications. Journal of Consumer Affairs, 56(4), 1638–1657. http://doi.org/10.1111/joca.12484