Microsoft Word Ed Horwitz Post Dissertation Fina docx

 Financial Knowledge, Behaviors, and Beliefs 
 
Relevant research on financial behaviors by Hilgert, Hogarth, and Beverly (2003) 
examined 18 different recommended financial management practices, from basic money 
management skills to sophisticated applications and behaviors. Consumers were asked about 
different types of financial product ownership and savings behaviors. In terms of retirement 
products, only 43% reported owning an IRA, about 25% owned stocks, and less than 25% 
reported owning any other retirement savings products. This research demonstrates that 
retirement product ownership behavior is an important and basic financial best practice behavior 
that is not well understood or demonstrated among consumers. 
 
Similar research by Hilgert, Hogarth, and Beverly (2003) also connected financial 
knowledge and behavior. Associations between financial knowledge and behavior were explored 
based on the four categories of (a) cash-flow management, (b) credit management, (c) savings, 

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and (d) investing. Positive and significant correlations between financial knowledge were found 
across several personal finance behaviors. Despite these results, the authors also found that an 
individual’s personal experience was the most frequently cited source of financial knowledge. 
Financial education programs were attributed less as sources for financial knowledge and had 
lower scores on all financial best practices and skill levels. Since financial education is a key 
component of financial literacy, an ineffective financial education program could be influencing 
the resulting behavior in this study.  
The combined representative research by Hilgert, Hogarth, and Beverly (2003) provides 
somewhat mixed findings. Evidence is found to support the connection between financial 
knowledge and some of the financial behaviors, but personal beliefs were found to impact 
behaviors as well. These findings, while mixed, do support a relationship between financial 
knowledge and behavior and the impacts of personal beliefs, as represented in the financial 
literacy model. Unfortunately, due to the methods used, the research falls short of producing 
conclusive evidence demonstrating that higher levels of financial knowledge lead to application 
of proper financial decision making (Martin, 2007).