Myopia, Financial Knowledge, and Financial Well-Being

Abstract

The purpose of this study was to examine the association between myopic time discounting and financial well-being moderated by financial knowledge, guided by the dual-self model. Regression results with data from the 2016 National Financial Well-Being Survey sponsored by the Consumer Financial Protection Bureau showed that myopia was associated negatively with financial well-being. In addition, financial knowledge was positively associated with financial well-being, and it plays an important role as a moderator on the association between myopia and financial well-being. When both financial knowledge’s direct and interactive effects were considered, financial knowledge may increase the financial well-being of myopic discounters at much smaller rates than nonmyopic discounters. This study provides implications for financial practitioners, educators, and researchers in helping consumers improve their financial well-being.