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FINANCIAL WELL-BEING OF THE BENEFICIARIES OF THE MINHA CASA MINHA VIDA PROGRAM: PERCEPTION AND ANTECEDENTS

ABSTRACT

Purpose:

This article has two main objectives: to measure the level of financial well-being (FWB) of the beneficiaries of the Minha Casa Minha Vida program (PMCMV) and test the hypothesis that financial literacy is an antecedent of the FWB.

Originality/value:

Considering that there is still no universally accepted definition and measure for the FWB (Brüggen, Hogreve, Holmlund, Kabadayi, & Löfgren, 2017Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228-237. doi:10.1016/j.jbusres.2017.03.013
https://doi.org/10.1016/j.jbusres.2017.0...
), this study seeks to apply the methodology proposed by the Consumer Financial Protection Bureau (CFPB) in Brazil, since the previous applications attempts of other scales showed great instability. Also, the hypothesis that the financial literacy is a antecedent of the FWB is tested.

Design/methodology/approach:

To measure the FWB, the scale developed by the CFPB was used. Financial literacy was built from the three dimensions proposed by the Organisation for Economic Co-operation and Development (OECD), which are: financial behavior, attitude and financial knowledge. The instrument was implemented in 561 beneficiaries of the three funding ranges of the PMCMV. It was used for descriptive statistical analysis, confirmatory factorial analysis and multiple linear regression.

Findings:

The results indicated that the majority of the beneficiaries of the program present medium-low and medium-high levels of FWB. The hypothesis that financial literacy is an antecedent of the FWB was confirmed, and all three dimensions had a positive impact. Levels of income also presented a positive influence, whereas the fact of having dependents had a negative impact. The BEF measure proposed by the CFPB seems adequate to the Brazilian context. And advances in the national financial literacy strategies tend to increase the FWB of the Minha Casa Minha Vida program.

KEYWORDS
Financial well-being; Minha Casa Minha Vida program; Financial literacy; Financial protection; Well-being scale

RESUMO

Objetivo:

Este artigo tem dois objetivos principais: 1. mensurar o nível de bem-estar financeiro (BEF) dos beneficiários do Programa Minha Casa Minha Vida (PMCMV) e 2. testar a hipótese de que a alfabetização financeira é um antecedente do BEF.

Originalidade/valor:

Considerando que ainda não há uma definição e uma medida universalmente aceitas para o BEF (Brüggen, Hogreve, Holmlund, Kabadayi, & Löfgren, 2017Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228-237. doi:10.1016/j.jbusres.2017.03.013
https://doi.org/10.1016/j.jbusres.2017.0...
), este estudo busca aplicar a metodologia proposta pelo Consumer Financial Protection Bureau (CFPB) no Brasil, uma vez que as tentativas anteriores de aplicação de outras escalas demonstraram uma grande instabilidade. E ainda é testada a hipótese de que a alfabetização financeira é um antecedente do BEF.

Design/metodologia/abordagem:

Para mensurar, o BEF utilizou-se a escala desenvolvida pelo CFPB. A alfabetização financeira foi construída a partir das três dimensões propostas pela Organisation for Economic Co-operation and Development (OECD), a saber: comportamento, atitude e conhecimento financeiros. O instrumento foi aplicado em 561 beneficiários das três faixas de financiamento do PMCMV. Utilizaram-se para análise técnicas de estatística descritiva, análise fatorial confirmatória e regressão linear múltipla.

Resultados:

Os resultados indicaram que a maioria dos beneficiários do programa apresenta níveis médio baixo e médio alto de BEF. A hipótese de que a alfabetização financeira é um antecedente do BEF foi confirmada, e as três dimensões impactaram positivamente. O nível de renda também exerce impacto positivo, ao passo que o fato de possuir dependentes exerce influência negativa no nível de BEF. A escala de BEF proposta pelo CFPB parece adequada ao contexto brasileiro. O avanço nas estratégias nacionais de alfabetização financeira tende a ampliar o BEF dos beneficiários do PMCMV.

PALAVRAS-CHAVE
Bem-estar financeiro; Programa Minha Casa Minha Vida; Alfabetização financeira; Proteção financeira; Escalas de bem-estar

1. INTRODUCTION

Although financial well-being (FWB) is becoming a topic of interest in several areas, including economics, financial planning, psychology, and consumer decision-making, there is still no universally-accepted definition or measure of it in the literature (Brüggen, Hogreve, Holmlund, Kabadayi, & Löfgren, 2017Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228-237. doi:10.1016/j.jbusres.2017.03.013
https://doi.org/10.1016/j.jbusres.2017.0...
). Thus, several studies that analyze FWB are not concerned with presenting a definition (Guo, Arnould, Gruen, & Tang, 2013Guo, L., Arnould, E. J., Gruen, T. W., & Tang, C. (2013). Socializing to co-produce: Pathways to consumers’ financial well-being. Journal of Service Research, 16(4), 549-563. doi:10.1177/1094670513483904
https://doi.org/10.1177/1094670513483904...
; O’Neill, Sorhaindo, Xiao, & Garman, 2005O’Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005). Financially distressed consumers: Their financial practices, financial well-being, and health. Financial Counseling and Planning, 16(1), 73-87.; Prawitz et al., 2006Prawitz, A., Garman, E. T., Sorhaindo, B., O’Neill, B., Kim, J., & Drentea, P. (2006). Incharge financial distress/financial well-being scale: Development, administration, and score interpretation. Journal of Financial Counseling and Planning, 17(1), 34-50. doi:10.1037/t60365-000
https://doi.org/10.1037/t60365-000...
, Shim, Xiao, Barber, & Lyons, 2009Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30, 708-723. doi:10.1016/j.appdev.2009.02.003
https://doi.org/10.1016/j.appdev.2009.02...
; Guo, Arnould, Gruen, & Tang, 2013). Studies with definitions, however, use different approaches (whether objective or subjective).

In the objective approach, income, financial information, financial indexes (Joo & Grable, 2004Joo, S. H., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues, 25(1), 25-50. doi: 10.1023/B:JEEI.0000016722.37994.9f
https://doi.org/10.1023/B:JEEI.000001672...
; Kahneman & Deaton, 2010Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences of the United States of America, 107(38), 16489-16493. doi:10.1073/pnas. 1011492107
https://doi.org/10.1073/pnas. 1011492107...
) and liquidity (Aggarwal, 2014Aggarwal, S. (2014). Developing an index for measuring financial well-being in a geography. IFMR Finance Foundation. Retrieved from https://www.dvara.com/blog/2011/02/14/developing-an-index-for-measuring-financial-well-being-in-a-geography/
https://www.dvara.com/blog/2011/02/14/de...
) are used as proxies for FWB. Using the subjective approach, researchers seek to examine people’s perceptions and reactions to their financial conditions (Norvilitis, Szablicki, & Wilson, 2003Norvilitis, J. M., Szablicki, P. B., & Wilson, S. D. (2003). Factors influencing levels of credit card debt in college students. Journal of Applied Social Psychology, 33(5), 935-947. doi: 10.1111/j.1559-1816.2003.tb01932.x
https://doi.org/10.1111/j.1559-1816.2003...
; O’Neill et al., 2005O’Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005). Financially distressed consumers: Their financial practices, financial well-being, and health. Financial Counseling and Planning, 16(1), 73-87.). Thus, individuals in similar financial situations (in terms of financial assets or income profile) may perceive their FWB differently, depending on their preferences. Thus, people in the same financial situation can assess their well-being differently (Garman, Sorhaindo, Bailey, Kim, & Xiao, 2004Garman, E. T., Sorhaindo, B., Bailey, W., Kim, J., & Xiao, J. (2004). Financially distressed credit counseling clients and the incharge financial distress/financial well-being scale. Proceedings of the Eastern Regional Family Economics and Resource Management Association Conference. Retrieved from https://pfeef.org/wp-content/uploads/2016/09/Financially-Distressed-Clients-and-the-Scale.pdf
https://pfeef.org/wp-content/uploads/201...
).

In these studies, personal characteristics (Joo & Grable, 2004Joo, S. H., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues, 25(1), 25-50. doi: 10.1023/B:JEEI.0000016722.37994.9f
https://doi.org/10.1023/B:JEEI.000001672...
) and behavioral factors (Shim et al., 2009Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30, 708-723. doi:10.1016/j.appdev.2009.02.003
https://doi.org/10.1016/j.appdev.2009.02...
) that affect the subjective evaluation of FWB become relevant. In this context, different perceptions can also arise as a function, for example, of the stage of life (Malone, Stewart, Wilson, & Korsching, 2010Malone, K., Stewart, S. D., Wilson, J., & Korsching, P. F. (2010). Perceptions of financial well-being among American women in diverse families. Journal of Family and Economic Issues, 31(1), 63-81. doi:10.1007/s10834-009-9176-5
https://doi.org/10.1007/s10834-009-9176-...
) or of the attitude towards risk, the perceived capacity to satisfy expenses, satisfaction with savings and investment, and the tendency to worry about debt (Kim, Garman, & Sorhaindo, 2003Kim, J., Garman, E. T., & Sorhaindo, B. (2003) Relationships among credit counseling clients’ financial well-being, financial behaviors, financial stressor events, and health. Journal of Financial Counseling and Planning, 14(2), 75-87.).

There are also studies that use both approaches, that is, FWB is treated as a concept composed of objective and subjective dimensions (Vosloo, Fouche, & Barnard, 2014Vosloo, W., Fouche, J., & Barnard, J.(2014). The relationship between financial efficacy, satisfaction with remuneration and personal financial well-being. International Business and Economics Research Journal, 13(6), 1455-1470. doi:10.19030/iber.v13i6.8934
https://doi.org/10.19030/iber.v13i6.8934...
; Mende & Van Doorn, 2015Mende, M., & Van Doorn, J. (2015). Coproduction of transformative services as a pathway to improved consumer well-being: Findings from a longitudinal study on financial counseling. Journal of Service Research, 18(3), 351-368. doi:10.1177/1094670514559001
https://doi.org/10.1177/1094670514559001...
). In these cases, the literature uses different indicators for each of the dimensions, including the level of indebtedness and/or the level of income as a measure of objective well-being and satisfaction with their financial status or with their standard of living as a subjective measure.

Some empirical evidence already point to the difficulty of direct application to developing countries of the scales proposed internationally. Brüggen et al. (2017)Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228-237. doi:10.1016/j.jbusres.2017.03.013
https://doi.org/10.1016/j.jbusres.2017.0...
highlights that, although FWB definitions and measures are not exclusively applicable to industrialized countries, the meaning of the expression is quite different for developing countries, where a large part of the population struggles to survive. Especially in the Brazilian case, three independent studies (Kunkel, Vieira, & Potrich 2015Kunkel, F. I. R., Vieira, K. M., & Potrich, A. C. G. (2015). Causas e consequên­cias da dívida no cartão de crédito: Uma análise multifatores. Revista de Administração, 50, 169-182. doi: 10.5700/rausp1192
https://doi.org/10.5700/rausp1192...
; Campara, Vieira, & Potrich, 2017Campara, J. P., Vieira, K. M., & Potrich, A. C. G. (2017). Satisfação global de vida e bem-estar financeiro: Desvendando a percepção de beneficiários do Programa Bolsa Família. Revista de Administração Pública, 51(2), 182-200. doi:10.1590/0034-7612156168
https://doi.org/10.1590/0034-7612156168...
, Santos, Mendes-Da-Silva, Flores, & Norvilitis, 2016Santos, D. B., Mendes-Da-Silva, W., Flores, E., & Norvilitis, J. (2016). Predictors of credit card use and perceived financial well-being in female college students: a Brazil-United States comparative study. International Journal of Consumer Studies, 40(2), 133-142. doi: 10.1111/ijcs.12234
https://doi.org/10.1111/ijcs.12234...
), with different samples, but using the scale proposed by Norvilitis et al. (2003)Norvilitis, J. M., Szablicki, P. B., & Wilson, S. D. (2003). Factors influencing levels of credit card debt in college students. Journal of Applied Social Psychology, 33(5), 935-947. doi: 10.1111/j.1559-1816.2003.tb01932.x
https://doi.org/10.1111/j.1559-1816.2003...
, maintained in their analysis only three of the eight questions that constituted the original scale.

Despite the different conceptualizations and forms of measurement, several studies present evidence that FWB is associated with demographic and socioeconomic variables, as well as other behavioral factors. Gender, ethnicity, age, income, education and marital status (Hira & Mugenda, 1999Hira, T. K., & Mugenda, O. M. (1999). The relationships between self-worth and financial beliefs, behavior, and satisfaction. Journal of Family and Consumer Sciences, 91(4), 76-82.; Chan, Omar, & Yong, 2018Chan, S., Omar, S., & Yong, W. (2018). Financial well-being among Malaysian manufacturing employees. Management Science Letters, 8(6), 691-698. doi:10.5267/j.msl.2018.4.020
https://doi.org/10.5267/j.msl.2018.4.020...
) are examples of some of these variables of interest, along with financial literacy as a major behavioral factor (Joo & Grable, 2004Joo, S. H., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues, 25(1), 25-50. doi: 10.1023/B:JEEI.0000016722.37994.9f
https://doi.org/10.1023/B:JEEI.000001672...
; Shim et al., 2009Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30, 708-723. doi:10.1016/j.appdev.2009.02.003
https://doi.org/10.1016/j.appdev.2009.02...
; Huston, 2010Huston, S. J. (2010). Measuring financial literacy. The Journal of Consumer Affairs, 44(2), p. 296-316, 2010. doi:10.1111/j.1745-6606.2010.01170.x
https://doi.org/10.1111/j.1745-6606.2010...
; Adam, Frimpong, & Boadu, 2017Adam, A. M., Frimpong, S., & Boadu, M. O. (2017). Financial literacy and financial planning: Implication for financial well-being of retirees. Business and Economic Horizons, 13(2), 224-236. doi:10.15208/beh.2017.17
https://doi.org/10.15208/beh.2017.17...
, among others).

The importance of financial literacy for FWB is already recognized by international organizations. Both the Organisation for Economic Co-operation and Development (OECD) and the Consumer Financial Protection Bureau (CFPB) claim that the measure of success for financial literacy efforts must be FWB. In this context, financial literacy is a combination of awareness, knowledge, skill, attitude and behavior necessary to make sound financial decisions, and thus make it possible to achieve individual FWB (OECD, 2013aOrganisation for Economic Co-operation and Development (2013a). Financial literacy and inclusion: Results of OECD/Infe survey across countries and by gender. Paris: OECD. Retrieved from http://www.oecd.org/daf/fin/financialeducation/TrustFund2013_OECD_INFE_Fin_Lit_and_Incl_SurveyResults_by_Country_and_Gender.pdf
http://www.oecd.org/daf/fin/financialedu...
; CFPB, 2015aConsumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
).

Brazil, in line with these international organizations, has sought to establish strategies to improve financial education. In 2010, the country instituted the National Strategy for Financial Education (Estratégia Nacional de Educação Financeira - ENEF), which aims to “promote financial and social security education and contribute to the strengthening of citizenship, the efficiency and soundness of the national financial system and conscious decision making on the part of consumers” (translated to English from Brasil, 2010Brasil (2010). Decreto nº 7397, de 22 de dezembro de 2010. Retrieved from http://www.planalto.gov.br/ccivil_03/_ato2007-2010/2010/decreto/d7397.htm
http://www.planalto.gov.br/ccivil_03/_at...
). In addition, financial education was included among the suggested themes to compose the National Common Curricular Base (BNCC), a document that defines the set of essential skills that all students should develop throughout the stages and modalities of the country’s basic education (Brasil, 2018Brasil (2018). Base Nacional Comum Curricular: Educação é a base. Retrieved from http://basenacionalcomum.mec.gov.br/wp-content/uploads/2018/04/BNCC_Ensino Medio_embaixa_site.pdf
http://basenacionalcomum.mec.gov.br/wp-c...
).

However, in the latest survey of Programme for International Student Assessment (Pisa), Brazil presented the worst performance in financial literacy among all OECD countries participating in the assessment. Specifically, only 3% of students age 15 in Brazil registered proficiency at the maximum level, compared with 12%, on average of students worldwide (OECD, 2018Organisation for Economic Co-operation and Development (2018). PISA 2015: Results in focus. Paris: OECD. Retrieved from http://www.oecd.org/pisa/pisa-2015-results-in-focus.pdf
http://www.oecd.org/pisa/pisa-2015-resul...
).

In this context, this article has two main purposes: 1. to measure the level of FWB of the beneficiaries of the Minha Casa Minha Vida Program (PMCMV), and 2. to test the hypothesis that Financial Literacy is an antecedent of FWB. The choice of this target audience is justified by the fact that those low-income families eligible to apply for a loan in the program assume a long-term debt that represents a significant proportion in relation to their income. Given the rules of participation, the program allows families whose benefits can compromise up to 20% of the family income for a period that can last up to ten years.

The hypothesis that financial literacy is an antecedent of FWB finds support in the argument that the measure of success for financial literacy efforts must be financial well-being (OECD, 2013aOrganisation for Economic Co-operation and Development (2013a). Financial literacy and inclusion: Results of OECD/Infe survey across countries and by gender. Paris: OECD. Retrieved from http://www.oecd.org/daf/fin/financialeducation/TrustFund2013_OECD_INFE_Fin_Lit_and_Incl_SurveyResults_by_Country_and_Gender.pdf
http://www.oecd.org/daf/fin/financialedu...
; CFPB, 2015aConsumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
). It is also supported by evidence suggesting that financial behavior (Delafrooz & Paim, 2011Delafrooz, N., & Paim, L. H. (2011). Determinants of financial wellness among Malaysia workers. African Journal of Business Management, 5(24), 10.092-10.100. doi: 10.5897/AJBM10.1267
https://doi.org/10.5897/AJBM10.1267...
; Mokhtar & Husniyah, 2017Mokhtar, N., & Husniyah, A. R. (2017). Determinants of financial well-being among public employees in Putrajaya, Malaysia. Pertanika Journal of Social Sciences & Humanities, 25(3), 1241-1260.) and financial attitudes (Joo, 2008Joo, S. (2008). Personal financial wellness. In J. J. Xiao (Ed.), Handbook of consumer finance research (pp. 21-34). New York: Springer.) are positively related to FWB. For financial knowledge, there is also ample evidence of a positive and significant effect (Joo & Grable, 2004Joo, S. H., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues, 25(1), 25-50. doi: 10.1023/B:JEEI.0000016722.37994.9f
https://doi.org/10.1023/B:JEEI.000001672...
; Delafrooz & Paim, 2011Delafrooz, N., & Paim, L. H. (2011). Determinants of financial wellness among Malaysia workers. African Journal of Business Management, 5(24), 10.092-10.100. doi: 10.5897/AJBM10.1267
https://doi.org/10.5897/AJBM10.1267...
; Robb & Woodyard, 2011Robb, C. A., & Woodyard, A. S. (2011). Financial knowledge and best practice behavior. Journal of Financial Counselling and Planning, 22(1), 60-70.; Falahati, Sabri, & Paim, 2012Falahati, L., Sabri, M. F., & Paim, L. H. (2012). Assessment a model of financial satisfaction predictors: Examining the mediate effect of financial behaviour and financial strain. World Applied Sciences Journal, 20(2), 190-197. doi:10.5829/idosi.wasj.2012.20.02.1832
https://doi.org/10.5829/idosi.wasj.2012....
; Banco Central do Brasil [BCB], 2017Banco Central do Brasil (2017). Série Cidadania Financeira nº 5 - Competências em educação financeira. Retrieved from https://www.bcb.gov.br/nor/relincfin/serie_cidadania_financeira_pesquisa_infe_br_%200443_2017.pdf
https://www.bcb.gov.br/nor/relincfin/ser...
).

It is understood that, in the case of public policies - especially those involving transfers of resources and/or financial subsidies, as is the case with the PMCMV - the FWB must be among the objectives of the policy and, therefore, must be included in the dimensions of evaluation of the program. In addition, as Brazil evolves in the adoption of national financial literacy strategies, such as Enef and, considering that the ultimate goal of financial literacy should be financial well-being, a measure of the indi­viduals’ FWB level becomes relevant. In addition, an FWB indicator can assist in the analysis of the evolution of the level of well-being and, consequently, assist in the definition of priority areas of action for inclusion and financial education programs in different population profiles.

In addition to this introduction, the article is structured as follows. In section 2, the theoretical foundations of FWB and financial literacy are presented. Then, section 3 highlights the sample, the instrument, and the analysis techniques. Section 4 describes the profile of respondents, descriptive statistics, the process of measuring the level of FWB and the analysis of the influence of financial literacy on FWB. Section 5 presents the main conclusions and implications for the formulation of public financial education policies.

2. THEORETICAL BACKGROUND

2.1 Financial well-being

Among the definitions of FWB, one of the most used is the one of the CFPB (2015a)Consumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
in which the FWB can be defined as a state in which the individual is able to meet his current and ongoing financial obligations, feeling secure about his financial future and is able to make choices that allow him to enjoy life. In this sense, Plagnol (2011)Plagnol, A. C. (2011). Financial satisfaction over the life course: The influence of assets and liabilities. Journal of Economic Psychology, 32(1), 45-64. doi:10.1016/j.joep.2010.10.006
https://doi.org/10.1016/j.joep.2010.10.0...
states that the ability to effectively manage monetary resources, in favor of a financial balance capable of providing economic stability is an important factor for all individuals and when this stability is achieved, FWB is attained. A similar definition is proposed by Arber, Fenn, and Meadows (2014)Arber, S., Fenn, K., & Meadows, R. (2014). Subjective financial well-being, income and heal thin equalities in mid and later life in Britain. Social Science & Medicine, 100, 12-20. doi: 10.1016/j.socscimed.2013.10.016
https://doi.org/10.1016/j.socscimed.2013...
, in which the FWB is the classification obtained by the individual in relation to the perception of satisfaction regarding the adequacy of their income in relation to their personal needs. Brüggen et al. (2017)Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228-237. doi:10.1016/j.jbusres.2017.03.013
https://doi.org/10.1016/j.jbusres.2017.0...
add to the concept the idea of ​​financial freedom, that is, the ability of individuals to make decisions about their lives without worrying about their financial restrictions, leading then to FWB. Joo (2008)Joo, S. (2008). Personal financial wellness. In J. J. Xiao (Ed.), Handbook of consumer finance research (pp. 21-34). New York: Springer. shows that FWB is an anxiety-free, healthy and happy financial perception. And yet, in a more synthetic way, Shim et al. (2009)Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30, 708-723. doi:10.1016/j.appdev.2009.02.003
https://doi.org/10.1016/j.appdev.2009.02...
define FWB simply as the positive feeling regarding the individual’s financial situation.

In an attempt to better specify the concept, the CFPB (2015a)Consumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
defined as resources inherent to an individual’s FWB: 1. having control over their finances, being able to meet expenses on time; 2. having a financial reserve in case of unexpected expenses and emergencies, in addition to having health insurance, good credit condition, and being able to count on friends and family if you need any extra financial assistance; 3. having goals, such as saving a monthly amount of resources for retirement and being on track to achieve your goals; 4. being able to make choices that allow you to enjoy life, such as taking a vacation, enjoying leisure time, returning to a school to pursue a more advanced degree of study or working less to spend more time with your family.

Chan, Chan, and Chau (2012)Chan, K. Y. K., Chan, S. F., & Chau, A. W. L. (2012). Financial knowledge and aptitudes: Impacts on college students’ financial well-being. College Student Journal, 46(1), 114-133. and Malone et al. (2010)Malone, K., Stewart, S. D., Wilson, J., & Korsching, P. F. (2010). Perceptions of financial well-being among American women in diverse families. Journal of Family and Economic Issues, 31(1), 63-81. doi:10.1007/s10834-009-9176-5
https://doi.org/10.1007/s10834-009-9176-...
also argue that, in order to understand FWB, it is necessary to take into consideration individuals’ understanding and temporal concern about the past, present, and future, that is, aspects related to past financial experiences, current expe­riences and future expectations. In this perspective, Delafrooz and Paim (2011)Delafrooz, N., & Paim, L. H. (2011). Determinants of financial wellness among Malaysia workers. African Journal of Business Management, 5(24), 10.092-10.100. doi: 10.5897/AJBM10.1267
https://doi.org/10.5897/AJBM10.1267...
complement this argument, stating that the FWB must contemplate financial satisfaction, the perception of financial resources, financial stability, and the objective value of assets.

Thus, in order to identify people’s financial satisfaction, it is necessary to analyze the context of life in which they live and, consequently, the family’s disposable income. Thus, the greater the debt in relation to income, the lower the financial satisfaction tends to be. Therefore, an increase in income will not always translate into an increase in financial satisfaction, since the level of debt may be high and, consequently, it will affect FWB (Vlaev & Elliott, 2014Vlaev, I., & Elliott, A.(2014). Financial well-being components. Social Indicators Research, 118(3), 1103-1123. doi:10.1007/s11205-013-0462-0
https://doi.org/10.1007/s11205-013-0462-...
). However, other factors such as personality, attitude, decision-making context, opportunities, knowledge, skills, and behavior can also affect the perception of the financial situation (CFPB, 2015aConsumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
).

Regarding ways of assessing the level of FWB, during the 1990s more objective aspects were taken into account, related to: family income, budget items (expenses with food, clothing, housing, and transportation), financial resources available to handle emergencies, net worth (difference between assets and all debts), the amount of household debt, the level of savings, and money for future needs (Samarian, 1990; Lown & Ju, 1992Lown, J. M., & Ju, I. S. (1992). A model of credit use and financial satisfaction. Financial Counseling and Planning, 3, 105-125.). Over the years, this objective perspective on FWB has given rise to subjective aspects. The discussion about FWB, then, incorporates aspects related to the personal characteristics of each individual. Some of these are their values, experiences, expectations and disposition, which reflect significantly in the global sense or perception of FWB.

In this approach, the international FWB scales developed by Norvilitis et al. (2003)Norvilitis, J. M., Szablicki, P. B., & Wilson, S. D. (2003). Factors influencing levels of credit card debt in college students. Journal of Applied Social Psychology, 33(5), 935-947. doi: 10.1111/j.1559-1816.2003.tb01932.x
https://doi.org/10.1111/j.1559-1816.2003...
, the proposal by Prawitz et al. (2006)Prawitz, A., Garman, E. T., Sorhaindo, B., O’Neill, B., Kim, J., & Drentea, P. (2006). Incharge financial distress/financial well-being scale: Development, administration, and score interpretation. Journal of Financial Counseling and Planning, 17(1), 34-50. doi:10.1037/t60365-000
https://doi.org/10.1037/t60365-000...
, called Personal Financial Wellness Scale™ (PFW Scale™) and, more recently, the instrument released by CFPB (2015a)Consumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
are the most cited proposals in the literature.

The FWB scale by Norvilitis et al. (2003)Norvilitis, J. M., Szablicki, P. B., & Wilson, S. D. (2003). Factors influencing levels of credit card debt in college students. Journal of Applied Social Psychology, 33(5), 935-947. doi: 10.1111/j.1559-1816.2003.tb01932.x
https://doi.org/10.1111/j.1559-1816.2003...
consists of eight items designed to measure feelings of confidence and financial security, scored on a 5-point scale ranging from 1 (strongly agree) to 5 (strongly disagree). The scale comprises two main factors: current financial concerns and expectations for the future. The PFW Scale is composed of eight questions, which measure how people declare themselves about financial reactions and situations, using a 10-point likert-type scale, ranging from negative feelings to positive feelings (Prawitz et al., 2006Prawitz, A., Garman, E. T., Sorhaindo, B., O’Neill, B., Kim, J., & Drentea, P. (2006). Incharge financial distress/financial well-being scale: Development, administration, and score interpretation. Journal of Financial Counseling and Planning, 17(1), 34-50. doi:10.1037/t60365-000
https://doi.org/10.1037/t60365-000...
).

The scale, developed by the CFPB (2015a)Consumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
, is based on the insights of consumers and experts and was developed using techniques such as interviews and psychometric tests, to ensure an accurate understanding of the questions. The scale has 10 items that incorporate the four elements of the FWB, as summarized in Figure 2.1.1.

Figure 2.1.1
MAIN ELEMENTS OF FWB IN THE PRESENT AND THE FUTURE

There are still few studies that tried to apply FWB scales in Brazil; the three studies that used the Norvilitis et al. (2003)Norvilitis, J. M., Szablicki, P. B., & Wilson, S. D. (2003). Factors influencing levels of credit card debt in college students. Journal of Applied Social Psychology, 33(5), 935-947. doi: 10.1111/j.1559-1816.2003.tb01932.x
https://doi.org/10.1111/j.1559-1816.2003...
scale ended up excluding most questions from the analysis. Kunkel et al. (2015)Kunkel, F. I. R., Vieira, K. M., & Potrich, A. C. G. (2015). Causas e consequên­cias da dívida no cartão de crédito: Uma análise multifatores. Revista de Administração, 50, 169-182. doi: 10.5700/rausp1192
https://doi.org/10.5700/rausp1192...
, Santos et al. (2016)Santos, D. B., Mendes-Da-Silva, W., Flores, E., & Norvilitis, J. (2016). Predictors of credit card use and perceived financial well-being in female college students: a Brazil-United States comparative study. International Journal of Consumer Studies, 40(2), 133-142. doi: 10.1111/ijcs.12234
https://doi.org/10.1111/ijcs.12234...
, and Campara et al. (2017)Campara, J. P., Vieira, K. M., & Potrich, A. C. G. (2017). Satisfação global de vida e bem-estar financeiro: Desvendando a percepção de beneficiários do Programa Bolsa Família. Revista de Administração Pública, 51(2), 182-200. doi:10.1590/0034-7612156168
https://doi.org/10.1590/0034-7612156168...
, based on confirmatory factor analysis, maintained in their studies only three questions from the eight proposals. The other questions were excluded from the models due to a lack of significance or very low coefficients.

Regarding the differences in FWB, the literature brings changes for several socioeconomic and demographic variables. Figure 2.1.2 provides a description of those used.

Figure 2.1.2
SUMMARY OF THE RELATIONSHIPS BETWEEN SOCIOECONOMIC AND DEMOGRAPHIC VARIABLES AND FWB

Figure 2.1.2 shows the variables marital status and education, for which there is no consensus in the literature regarding the relationship with FWB. With regard to marital status, Sumarwan (1990)Sumarwan, U. (1990). A managerial system approach to factors influencing satisfaction with households’ financial status (Doctoral thesis, Iowa State University, Ames, Iowa, USA). and Diniz, Vieira, Potrich, and Campara (2014)Diniz, A. P. C., Vieira, K. M., Potrich, A. C. G., & Campara, J. P. (2014). Influência das variáveis socioeconômicas e demográficas no bem-estar financeiro: Um estudo do comportamento maranhense. Revista Uniabeu, 7(17), 218-234. concluded that married individuals are more likely to be satisfied with the resources and assets they have in relation to single, divorced, or widowed individuals. On the other hand, Gutter and Copur (2011)Gutter, M., & Copur, Z. (2011). Financial behaviors and financial well-being of college students: Evidence from a national survey. Journal of Family and Economic, 32(4), 699-714. doi:10.1007/s10834-011-9255-2
https://doi.org/10.1007/s10834-011-9255-...
affirmed in their work on FWB with university students that singles have significantly greater FWB in relation to married, divorced or widowed people.

As for education, Lown and Ju (1992)Lown, J. M., & Ju, I. S. (1992). A model of credit use and financial satisfaction. Financial Counseling and Planning, 3, 105-125. and Diniz et al. (2014)Diniz, A. P. C., Vieira, K. M., Potrich, A. C. G., & Campara, J. P. (2014). Influência das variáveis socioeconômicas e demográficas no bem-estar financeiro: Um estudo do comportamento maranhense. Revista Uniabeu, 7(17), 218-234. demonstrated that there are significant differences regarding level of education and its influence on FWB, with groups with a higher educational level tending to be more satisfied. Corroborating the idea that educational level positively influences the perception of FWB, Penn (2007)Penn, D. A. (2007). Financial well-being in an urban area: An application of multiple imputation [Working Paper]. Department of Economics and Finance, Paris. demonstrated that individuals with formal education (in this case, university degrees) had a better perception of FWB in relation to individuals without a university degree. On the other hand, Plagnol (2011)Plagnol, A. C. (2011). Financial satisfaction over the life course: The influence of assets and liabilities. Journal of Economic Psychology, 32(1), 45-64. doi:10.1016/j.joep.2010.10.006
https://doi.org/10.1016/j.joep.2010.10.0...
reports that individuals with a higher level of education have higher aspirations and, therefore, are less satisfied with their financial situation.

2.2 Financial literacy as an antecedent of financial well-being

Although there are several definitions for financial literacy, the representativeness of the three dimensions developed by the OECD (2015)Organisation for Economic Co-operation and Development (2015). OECD/Infe toolkit for measuring financial literacy and financial inclusion. Paris: OECD. Retrieved from http://www.oecd.org/daf/fin/financial-education/2015_OECD_INFE_Toolkit_Measuring_Financial_Literacy.pdf
http://www.oecd.org/daf/fin/financial-ed...
stands out: 1. the knowledge and understanding of financial concepts and risks; 2. skills, motivation, and confidence to apply this knowledge; and 3. understanding, in order to make effective decisions in a variety of contexts so that the FWB of individuals and society is maximized (OECD, 2015Organisation for Economic Co-operation and Development (2015). OECD/Infe toolkit for measuring financial literacy and financial inclusion. Paris: OECD. Retrieved from http://www.oecd.org/daf/fin/financial-education/2015_OECD_INFE_Toolkit_Measuring_Financial_Literacy.pdf
http://www.oecd.org/daf/fin/financial-ed...
).

The dimension of financial knowledge or financial education can be defined as a particular type of human capital, acquired throughout life and related to the ability to effectively manage income, expenses, and savings (Delavande, Rohwedder, & Willis, 2008Delavande, A., Rohwedder, S., & Willis, R. J. (2008). Retirement planning and the role of financial literacy and cognition [Working Paper Nº 190]. Michigan Retirement Research Center Michigan.). In other words, financial knowledge can be understood as the ability of an individual to understand financial information linked to operational credit, savings, investment and consumption transactions, compatible with his/her financial reality (Huston, 2010Huston, S. J. (2010). Measuring financial literacy. The Journal of Consumer Affairs, 44(2), p. 296-316, 2010. doi:10.1111/j.1745-6606.2010.01170.x
https://doi.org/10.1111/j.1745-6606.2010...
).

Financial behavior is the last dimension of financial literacy, mentioned by the OECD (2013a)Organisation for Economic Co-operation and Development (2013a). Financial literacy and inclusion: Results of OECD/Infe survey across countries and by gender. Paris: OECD. Retrieved from http://www.oecd.org/daf/fin/financialeducation/TrustFund2013_OECD_INFE_Fin_Lit_and_Incl_SurveyResults_by_Country_and_Gender.pdf
http://www.oecd.org/daf/fin/financialedu...
. It is considered an essential element among the three, as it materializes financial balance or imbalance. Adequate financial behavior has, at least, five requirements: honoring monthly expenses, keeping finances under control, planning for the future, making assertive choices regarding financial products, and keeping abreast of financial issues (Mundy, 2011Mundy, S. (2011). Financial education programmes in schools: Analysis of selected current programmes and literature [Mimeo]. Paris: OECD. ).

3. RESEARCH METHOD

3.1 Participants

The target population of the study consists of people who received loans by the PMCMV, belonging to various financing ranges. In range 1, families are selected by the municipality or state government. They cannot own property and have not previously received housing benefits from the federal government. The debt amortization period is fixed at 120 months, in which the gross amount of the installment corresponds to that of the financing divided by 120. The net amount of installments to be paid by the beneficiary corresponds to 5% of the gross monthly family income or R$ 25.00, whichever is greater; the remaining amount is subsidized by the program (Caixa Econômica Federal [CEF], 2015aCaixa Econômica Federal (2015a). Manual do Programa Minha Casa Minha Vida - Entidades Recursos FDS. Retrieved from http://www.caixa.gov.br/Downloads/habitacao-minha-casa-minha-vida/MANUAL_MCMV_ENTIDADES.pdf.
http://www.caixa.gov.br/Downloads/habita...
). Families with incomes between R$ 1,600.01 and R$ 3,275.00 per month belong to the PMCMV’s range 2 (which offers subsidies and reduced interest). Families with income between R$ 3,275.01 and R$ 5,000.00 belong to range 3 and have only reduced interest rates when compared to the other groups.

In ranges 2 and 3, the amount financed is defined according to an analysis of the beneficiary’s payment capacity. This follows a risk assessment conducted by the Caixa Econômica Federal (Brazil’s public bank dedicated to mortgages and real estate financing), respecting the limits of gross family income and investment value, applicable individually, to the units that are part of the project, also observing the percentage of the borrower’s minimum participation in the investment, the amortization system / term and the interest rate (CEF, 2015aCaixa Econômica Federal (2015a). Manual do Programa Minha Casa Minha Vida - Entidades Recursos FDS. Retrieved from http://www.caixa.gov.br/Downloads/habitacao-minha-casa-minha-vida/MANUAL_MCMV_ENTIDADES.pdf.
http://www.caixa.gov.br/Downloads/habita...
).

Subsidies may be for the purpose of covering the remuneration of the financial agent, with a reduction in the value of the installments or for the purpose of paying part of the acquisition or construction of the property. A discount on the monthly interest rate of beneficiary financing is granted within the established income limits, calculated based on the theoretical flow of financing over the term of the operation, varying between 5% and 7.16% per year (CEF, 2015bCaixa Econômica Federal (2015b). Carta de crédito FGTS imóvel na planta associativo. Retrieved from http://www.caixa.gov.br/Downloads/habitacao-documentos-gerais/Carta_de_Credito_FGTS_E_OUTROS.pdf
http://www.caixa.gov.br/Downloads/habita...
).

As opposed to range 1, the beneficiaries of ranges 2 and 3 cannot have any registration limitation, and must be approved in the credit risk analysis. In addition, recipients cannot hold active financing in the Brazilian Housing Financial System or be the owner, assignee, or promising buyer (or even the holder of the right to acquire another urban residential property located in the current place of residence or where he/she intends to fix it).

The study sample comprised 561 beneficiaries from the three financing ranges, residing in three different cities in the state of Rio Grande do Sul. The respondents were interviewed at their homes, upon agreeing to participate in the research. Of the 561 respondents, 170 (30.3%) obtained financing in range 1 (income up to R$ 1,600.00), 368 (65.6%) in range 2 (income up to R$ 3,275.00) and 23 (4.15% ) in range 3 (income up to R $ 5,000.00). Figure 3.1.1 presents the profile of the respondents.

Figure 3.1.1
PROFILE OF RESPONDENTS ACCORDING TO THE VARIABLES: AGE, GENDER, MARITAL STATUS, DEPENDENTS, EDUCATION, WHO WORKS IN THE FAMILY, WHO CONTRIBUTES TO HOUSEHOLD EXPENSES, OCCUPATION, AND INCOME

More than half the respondents were up to 36 years old; less than a quarter were older than 48 years old. These data show that most beneficiaries are younger and, with the PMCMV, were able to acquire their first property. Most respondents were female (67.2%), married (62.3%), and with high school (39.1%) or higher education (20.5%).

When asked about who works in the family, the highest percentages were in the alternatives “You and your partner” and “You”. This was also found when respondents were asked about who contributes to household expenses. Here, 48.9% replied “You and your partner” and 25.9% endorsed “You”. As for occupation, a large part of the sample was comprised of employees with a formal contract, regular self-employed persons, civil servants, or only retired. Regarding monthly family income, most had a monthly family income of up to R$ 3,275.00.

3.2 Instrument

The questionnaire was composed of three blocks. The first, aimed at identifying the participants’ profiles, had nine questions. The second block presents the FWB scale, whose questions were translated from the scale proposed by the CFPB (2015b)Consumer Financial Protection Bureau (2015b). Measuring financial well-being: A guide to using the CFPB financial well-being scale. Washington, DC: CFPB. Retrieved from https://files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf
https://files.consumerfinance.gov/f/2015...
. The scale consists of ten questions, divided into two parts. The first part is comprised of questions assessing whether the individual can handle unexpected expenses; guarantee his/her financial future; feeling that he/she will be able to acquire desired things; and enjoy life due to the way he/she manages personal finances. The variables in the second part asks whether the participant can save money, if there is a financial difficulty in the month when there is an unexpected event, if he is up to date with his finances and if finances control his life.

On the third block, there are the three dimensions of financial literacy. The financial behavior maintained by the respondents is assessed by adapting the scales proposed by Shockey (2002)Shockey, S. S. (2002). Low-wealth adults financial literacy, money management behavior and associates factors, including critical thinking (Doctoral thesis, Ohio State University, Utah, USA)., O’Neill and Xiao (2012)O’Neill, B., & Xiao, J. (2012). Financial behaviors before and after the financial crisis: Evidence from an online survey. Financial Counseling and Planning, 23(1), 33-46. and by the OECD (2013b)Organisation for Economic Co-operation and Development (2013b). Women and financial education: Evidence, policy responses and guidance. Paris: OECD. doi:10.1787/9 789264202733-en
https://doi.org/10.1787/9 789264202733-e...
. The purpose is to identify the level of financial behavior of individuals, whether they act in order to protect or risk their monetary resources, with variables related to the control of expenses, price comparison and savings. To measure financial attitude, a construct, whose design was based on the scales of Shockey (2002)Shockey, S. S. (2002). Low-wealth adults financial literacy, money management behavior and associates factors, including critical thinking (Doctoral thesis, Ohio State University, Utah, USA). and OECD (2013b)Organisation for Economic Co-operation and Development (2013b). Women and financial education: Evidence, policy responses and guidance. Paris: OECD. doi:10.1787/9 789264202733-en
https://doi.org/10.1787/9 789264202733-e...
was used to identify how the individual evaluates his/her financial management. The more the respondent agrees with the statements made, the more positive their financial attitude. For financial knowledge, respondents are invited to think about financial issues and mark the alternative they consider correct; for each question, there is only one true alternative. Thus, an index will be built based on multiple choice questions adapted from Alessie, Van Rooij, and Lusardi (2011)Alessie, R., Van Rooij, M., & Lusardi, A. (2011). Financial literacy and retirement preparation in the Netherlands. Journal of Pension Economics and Finance, 10(4), 527-545. doi:10.1017/S1474747211 000461
https://doi.org/10.1017/S1474747211 0004...
, Klapper, Lusardi, and Panos (2013)Klapper, L., Lusardi, A., & Panos, G. A. (2013). Financial literacy and its consequences: Evidence from Russia during the financial crisis. Journal of Banking & Finance, 37(10), 3904-3923. doi:10.1016/j.jbankfin.2013.07.014
https://doi.org/10.1016/j.jbankfin.2013....
, OECD (2013b)Organisation for Economic Co-operation and Development (2013b). Women and financial education: Evidence, policy responses and guidance. Paris: OECD. doi:10.1787/9 789264202733-en
https://doi.org/10.1787/9 789264202733-e...
, and the National Financial Capability Study - NFCS (2013)National Financial Capability Study (2013). Financial capability in the United States - Report of Findings from the 2012 National Financial Capability Study. Financial Industry Regulatory Authority (FINRA) Investor Education Foundation. Retrieved from http://www.usfinancialcapability.org/downloads/NFCS_2012_Report_Natl_Findings.pdf
http://www.usfinancialcapability.org/dow...
.

The research instrument went through three stages before its application, namely: reverse translation, expert evaluation and pre-testing. This process was carried out in order to verify whether the semantics and questioning were consistent with the social context of these people, as well as whether the questions were really questioning what was intended to be investigated. The translation process was carried out by two people in three stages, the questions were translated from English to Portuguese, from Portuguese to English and finally into Portuguese again. The evaluation by specialists was carried out by three professionals with knowledge of the research area. The pre-test involved the application of the instrument to 20 beneficiaries.

The profile questions of the first block of the instrument can be identified in Figure 3.1.1; the other questions of the instrument are listed in Appendix.

3.3 Analysis techniques

As analysis techniques, we used descriptive statistical measures, confirmatory factor analysis and multiple regression analysis. However, before using statistical techniques, it was necessary to apply the methodology proposed by the CFPB (2015b)Consumer Financial Protection Bureau (2015b). Measuring financial well-being: A guide to using the CFPB financial well-being scale. Washington, DC: CFPB. Retrieved from https://files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf
https://files.consumerfinance.gov/f/2015...
to calculate the FWB level of each par­ticipant. Thus, for each alternative answer, a score was assigned, and in the first part, in questions 22, 23, 25, the answer alternatives are equivalent to: completely = 4, very well = 3, a little = 2, very little = 1 and not at all = 0. In questions 24, 26 and 27, the answer alternatives are equivalent to the following score: completely = 0, very well = 1, a little = 2, very little = 3 and not at all = 4. In the second part, in questions 28, 30 and 31, the alternatives are equivalent to: always = 0, often = 1, sometimes = 2, rarely = 3 and never = 4. In question 29, the score is given as follows: always = 4, often = 3, sometimes = 2, rarely = 1 and never = 0. From the sum of the scores of all of the variables, we obtain the total score, which ranges from 0 to 40, and the higher the score, the higher the FWB.

In addition to descriptive statistics, Confirmatory Factor Analysis is used to validate the constructs “financial attitude” and “financial behavior.” To do so, it begins with a variance-covariance matrix and opts for the estimation of maximum likelihood via a direct procedure.

The identification of construct validity and reliability are verified fol­lowing the recommendation of Hair, Black, and Babin (2010)Hair, J. R., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate Data Analyses (7th ed.). New Jersey: Pearson.. Thus, in addition to the magnitude and statistical significance of the standardized coefficients, the indicators in Figure 3.3.1 are used.

Figure 3.3.1
DESCRIPTION OF THE ADJUSTMENT AND RELIABILITY INDICES FOLLOWED BY THEIR PURPOSES AND LIMITS

Unidimensionality is assessed based on the standardization of residuals related to the indicators of each latent variable. Constructs that have, for a 5% significance level, standardized residues below 2.58 are considered one-dimensional (Hair et al., 2010Hair, J. R., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate Data Analyses (7th ed.). New Jersey: Pearson.).

Finally, a multiple linear regression model is used to analyze the influence of financial literacy on FWB. The FWB score is computed according to the methodology proposed by the CFPB (2015b)Consumer Financial Protection Bureau (2015b). Measuring financial well-being: A guide to using the CFPB financial well-being scale. Washington, DC: CFPB. Retrieved from https://files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf
https://files.consumerfinance.gov/f/2015...
, as previously described. Financial behavior is the sum of the correct answers to the questions that make up the construct. The financial attitude and behavior are computed by the weighted average of the answers to the questions. The standardized factorial loads obtained in the validation of the constructs are used as weights. Figure 3.3.2 presents the description of the independent variables:

Figure 3.3.2
DESCRIPTION OF THE INDEPENDENT VARIABLES OF THE REGRESSION MODEL

4. ANALYSIS OF RESULTS

Initially, we sought to analyze the participants’ perception of FWB. This analysis involved two steps. First, the descriptive statistics of the two blocks of questions that make up the FWB measure are presented. Subsequently, the FWB level of the interviewees is calculated and presented using the methodology proposed by the CFPB (2015b)Consumer Financial Protection Bureau (2015b). Measuring financial well-being: A guide to using the CFPB financial well-being scale. Washington, DC: CFPB. Retrieved from https://files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf
https://files.consumerfinance.gov/f/2015...
. Figures 4.1 and 4.2 show the descriptive statistics of the questions on the FWB scale.

Figure 4.1
DESCRIPTIVE STATISTICS OF THE FWB CONSTRUCT (PART 1), AVERAGES, CONFIDENCE INTERVAL, STANDARD DEVIATION AND PERCENTAGES
Figure 4.2
DESCRIPTIVE STATISTICS OF THE FWB CONSTRUCT (PART 2), AVERAGES, CONFIDENCE INTERVALS, STANDARD DEVIATION AND PERCENTAGES

Most averages were around 3.0, revealing that respondents feel an intermediate level of FWB. The variable that indicates the greatest feeling of financial satisfaction was: “Because of your financial situation, you feel that you will never have the things you want in life,” where 63% of respondents stated that “not at all” or “very little” of them feel that they will never have the things they want in life. The second variable that indicates a good level of FWB was: “You can enjoy life due to the way you are managing your money,” in which the majority (59.10%) stated that they enjoy it completely or very well. These variables are in line with what was highlighted by the CFPB (2015a)Consumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
as elements inherent to the FWB, such as “being on the path to achieve imposed goals” and being “able to make choices that allow them to enjoy life.”

Intermediate perceptions were found in the variables “You could handle a large unexpected expense” and “You are guaranteeing your financial future””; the two variables being inverted. It was noticed that a large part of the individuals responded “not at all” or “a little,” indicating that the individuals do not reach a higher FWB due to the difficulty in accumulating resources throughout their lives to prevent unexpected expenses and guarantee the future, leading them to worries and feelings of insecurity about unforeseen events. Thus, individuals lack goals, such as saving a monthly amount of resources. It is understood that this is not an easy task, especially for families with lower income levels. However, saving as little as possible tends to have a positive impact on the FWB.

The variable “You are just surviving financially” also had an intermediate average. On this variable, we revisited the aspect mentioned by authors such as Chan et al. (2012)Chan, K. Y. K., Chan, S. F., & Chau, A. W. L. (2012). Financial knowledge and aptitudes: Impacts on college students’ financial well-being. College Student Journal, 46(1), 114-133., Malone et al. (2010)Malone, K., Stewart, S. D., Wilson, J., & Korsching, P. F. (2010). Perceptions of financial well-being among American women in diverse families. Journal of Family and Economic Issues, 31(1), 63-81. doi:10.1007/s10834-009-9176-5
https://doi.org/10.1007/s10834-009-9176-...
and Norvilitis et al. (2003)Norvilitis, J. M., Szablicki, P. B., & Wilson, S. D. (2003). Factors influencing levels of credit card debt in college students. Journal of Applied Social Psychology, 33(5), 935-947. doi: 10.1111/j.1559-1816.2003.tb01932.x
https://doi.org/10.1111/j.1559-1816.2003...
: the notion of FWB addresses concerns about the present and the meeting of the momentary needs, as well as one’s future financial situation.

The most unfavorable perception of FWB was demonstrated in the variable “Are you concerned that the money you have or will have saved may not be enough?”, in which 32.30% reported being completely concerned, 15.20% very worried and 23.50% a little worried. This result reveals that PMCMV beneficiaries believe they would need to save more in order to have full financial security in the future. According to the CFPB (2015a)Consumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
, saving resources monthly for retirement is an inherent element of well-being but one not observed in the respondents.

Continuing the analysis of FWB, Figure 4.2 presents the descriptive statistics of the second part of the construct.

It is noticed that the variable with the highest average is the one that indicates that individuals are up to date with their finances. This result is very positive, as having control over finances and being able to pay bills on time brings financial security and significantly increases the personal FWB (CFPB, 2015aConsumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
).

It is observed that the other variables showed an intermediate level of FWB, with the average around three. As for the variable referring to having money left over at the end of the month, attention is paid to the highest percentage in the “sometimes” alternative (35.40%), and only 16.80% always has money left over at the end of the month. This finding is worrying, in the sense that if unexpected expenses and emergencies occur, the financial situation of these families can suffer damage, negatively impacting the FWB. However, in order to make it possible to have money left over at the end of the month, for both low-income and high-income individuals, effective financial planning and money control are necessary, as the lack of financial management can lead to financial dissatisfaction (Kim et al., 2003Kim, J., Garman, E. T., & Sorhaindo, B. (2003) Relationships among credit counseling clients’ financial well-being, financial behaviors, financial stressor events, and health. Journal of Financial Counseling and Planning, 14(2), 75-87.).

The variable “Your finances control your life” presented the worst rating on the FWB scale in this block, which refers to the situation that money and the constant commitment to the bills end up controlling people’s lives, which becomes a worrying factor given that finances and their proper use are important aspects for individuals. According to the CFPB (2015a)Consumer Financial Protection Bureau (2015a). Financial well-being: The goal of financial education. Washington, DC: CFPB. Retrieved from http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
http://files.consumerfinance.gov/f/20150...
, to achieve the FWB, the individual needs to have control over finances, financial reserve and also enjoy life, that is, if he plans financially, so that it is possible to take a vacation, enjoy a meal outside home and, in some moments, work less and spend more time with the family.

In the next stage, based on the procedure proposed by the CFPB (2015b)Consumer Financial Protection Bureau (2015b). Measuring financial well-being: A guide to using the CFPB financial well-being scale. Washington, DC: CFPB. Retrieved from https://files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf
https://files.consumerfinance.gov/f/2015...
, the level of FWB of individuals was computed. The histogram (Figure 4.3) shows the distribution on the scale.

Figure 4.3
HISTOGRAM OF FWB

The average level of FWB, on a scale ranging from 0 to 40, was 22 points, with a standard deviation of 8.72. It is observed that the distribution is slightly asymmetric, with more beneficiaries at very low levels than at high levels. The Kolmogorov-Smirnov normality test accepted the null hypothesis (value 1.064; sig 0.207), indicating that the FWB scale has a normal distribution.

In order to verify if there are differences in the means of the level of FWB when considering the PMCMV financing ranges and six socioeconomic and demographic variables (gender, marital status, dependents, education, occupation and monthly family income), we conducted t and ANOVA tests. The presentation of the significance of the tests is shown in Figure 4.4. In Figure 4.5, we present the results of the post hoc tests.

Figure 4.4
TESTS OF DIFFERENCE OF MEAN OF FWB CONSIDERING THE FINANCING RANGE AND SOCIOECONOMIC AND DEMOGRAPHIC VARIABLES (P-VALUES IN PARENTHESES)
Figure 4.5
TUKEY/GAMES-HOWELL HDS POST HOC TEST, DIFFERENCE IN MEAN AND SIGNIFICANCE FOR EACH AGE, EDUCATION, OCCUPATION AND INCOME LEVEL THAT SHOWED A SIGNIFICANT DIFFERENCE IN THE FWB FACTOR

Significant mean differences were found for all variables studied. The results indicate that individuals who have financing in the PMCMV of groups 2 and 3 (average 23,870), are male (average 24,332) and who do not have dependents (average 24,046), exhibit greater FWB.

In the influence of the gender variable, Leach, Hayhoe, and Turner (1999)Leach, L. J., Hayhoe, C. R., & Turner, P. R. (1999). Factors affecting perceived economic well-being of college students: A gender perspective. Journal of Financial Counseling and Planning, 10(2), 11-24. report that women normally experience greater adversity and stress when it comes to their finances, which ends up affecting their FWB. Shim et al. (2009)Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30, 708-723. doi:10.1016/j.appdev.2009.02.003
https://doi.org/10.1016/j.appdev.2009.02...
and Gutter and Copur (2011)Gutter, M., & Copur, Z. (2011). Financial behaviors and financial well-being of college students: Evidence from a national survey. Journal of Family and Economic, 32(4), 699-714. doi:10.1007/s10834-011-9255-2
https://doi.org/10.1007/s10834-011-9255-...
also found that men have higher levels of FWB than women. As for the variable “number of dependents”, the results of the present study are in accordance with what has already been demonstrated by Penn (2007)Penn, D. A. (2007). Financial well-being in an urban area: An application of multiple imputation [Working Paper]. Department of Economics and Finance, Paris. and Kunkel (2014)Kunkel, F. I. R. (2014). Causas e consequências da dívida no cartão de crédito: Uma análise multifatorial (Dissertação de mestrado, Universidade Federal de Santa Maria, Santa Maria, Brasil)., that is, that the number of children or dependents at home constitutes a factor that negatively influences FWB.

Regarding the variable “level of education”, it was found that respondents with the highest level of education also had the highest average scores. Individuals with graduate degrees (average score 26.50) and those with higher education (average 25.63) stand out. It is also worth mentioning the low level of FWB of those who have never studied (average 15.429) and the high discrepancy for individuals with a higher level of education. The greatest differences in means with statistical significance were found between those with graduate degrees (master’s/doctorate/postdoctorate) and those who attended elementary school from the 1st to the 4th (9,341), and the 5th to the 9th year (8,473), followed by the difference between those in the graduation group and those who completed the 4th grade of elementary school (8,469). The results obtained in this study are, thus, in line with those of Lown and Ju (1992)Lown, J. M., & Ju, I. S. (1992). A model of credit use and financial satisfaction. Financial Counseling and Planning, 3, 105-125. and Diniz et al. (2014Diniz, A. P. C., Vieira, K. M., Potrich, A. C. G., & Campara, J. P. (2014). Influência das variáveis socioeconômicas e demográficas no bem-estar financeiro: Um estudo do comportamento maranhense. Revista Uniabeu, 7(17), 218-234., 2015)Diniz, A. P. C., Vieira, K. M., Potrich, A. C. G., & Campara, J. P. (2015). Bem-estar financeiro: Uma análise multifatorial do comportamento maranhense. Estudos do CEPE, 42, 186-202. doi:10.17058/cepe.v0i42.6317
https://doi.org/10.17058/cepe.v0i42.6317...
, who found that those with a higher educational level tend to be more financially satisfied. Penn (2007)Penn, D. A. (2007). Financial well-being in an urban area: An application of multiple imputation [Working Paper]. Department of Economics and Finance, Paris. also observed that individuals with university degrees are more likely to get safer jobs and higher wages, factors that positively influence the FWB.

For the “occupation” variable, civil servants had the highest average FWB (24,655), corroborating the study by Diniz et al. (2015)Diniz, A. P. C., Vieira, K. M., Potrich, A. C. G., & Campara, J. P. (2015). Bem-estar financeiro: Uma análise multifatorial do comportamento maranhense. Estudos do CEPE, 42, 186-202. doi:10.17058/cepe.v0i42.6317
https://doi.org/10.17058/cepe.v0i42.6317...
. Regular freelancers and entrepreneurs also had high averages of FWB (24.170 and 24.067, respectively). On the other hand, freelancers and the unemployed had the lowest averages (15.000 and 15.250, respectively).

Through post hoc testing, it was found that the greatest differences, on average, occurred between civil servants and freelancers (9.654) and between civil servants and the unemployed (those that are not seeking employment) (9.404). It appears, from these differences, that stability is a very important point in determining FWB and that lacking a certain income each month negatively affects the perception of financial satisfaction. According to Plagnol (2011)Plagnol, A. C. (2011). Financial satisfaction over the life course: The influence of assets and liabilities. Journal of Economic Psychology, 32(1), 45-64. doi:10.1016/j.joep.2010.10.006
https://doi.org/10.1016/j.joep.2010.10.0...
, being unemployed - which may include individuals who do not have a fixed job - refers to the impossibility of accumulating savings and to a commonly observed scenario of anxiety related to the financial situation.

For the “income” variable, it was found that people with an income above R$ 5,000.00 are the most likely to have a higher level of FWB (average score of 29.929). Furthermore, it can be said that the increase in income is accompanied by greater satisfaction with finances, with the greatest dif­ference in means (13.821) occurring between the lowest and the highest income group. Delafrooz and Paim (2011)Delafrooz, N., & Paim, L. H. (2011). Determinants of financial wellness among Malaysia workers. African Journal of Business Management, 5(24), 10.092-10.100. doi: 10.5897/AJBM10.1267
https://doi.org/10.5897/AJBM10.1267...
, Gutter and Copur (2011)Gutter, M., & Copur, Z. (2011). Financial behaviors and financial well-being of college students: Evidence from a national survey. Journal of Family and Economic, 32(4), 699-714. doi:10.1007/s10834-011-9255-2
https://doi.org/10.1007/s10834-011-9255-...
, Kunkel (2014)Kunkel, F. I. R. (2014). Causas e consequências da dívida no cartão de crédito: Uma análise multifatorial (Dissertação de mestrado, Universidade Federal de Santa Maria, Santa Maria, Brasil). and Diniz et al. (2014)Diniz, A. P. C., Vieira, K. M., Potrich, A. C. G., & Campara, J. P. (2014). Influência das variáveis socioeconômicas e demográficas no bem-estar financeiro: Um estudo do comportamento maranhense. Revista Uniabeu, 7(17), 218-234. also found that income has a significant coefficient and a positive correlation with FWB. For Penn (2007)Penn, D. A. (2007). Financial well-being in an urban area: An application of multiple imputation [Working Paper]. Department of Economics and Finance, Paris., an increase in family income is directly related to the self-perception of financial security. Vlaev and Elliott (2014)Vlaev, I., & Elliott, A.(2014). Financial well-being components. Social Indicators Research, 118(3), 1103-1123. doi:10.1007/s11205-013-0462-0
https://doi.org/10.1007/s11205-013-0462-...
obtained a similar result when investigating FWB in young workers and families in the UK. These authors found that about 37% of respondents felt they had less than an excellent level of FWB, given an insufficient income.

In our study, in order to adequately classify respondents across various income levels, we applied the procedure suggested by the CFPB (2015b)Consumer Financial Protection Bureau (2015b). Measuring financial well-being: A guide to using the CFPB financial well-being scale. Washington, DC: CFPB. Retrieved from https://files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf
https://files.consumerfinance.gov/f/2015...
, in which the FWB is stratified into six levels. The classification table considers three main points: 1. the score obtained in the FWB indicator; 2. age, itself divided into two categories (from 18 to 61 years, 62 and above); 3. the manner in which the instrument is administered (either self- or by another, as is the case in this study). Thus, using these three criteria, the classification shown in Figure 4.6 was obtained.

Figure 4.6
LEVEL OF FWB OF RESPONDENTS, ACCORDING TO THE CFPB CLASSIFICATION

It can be noted that, in this classification, the FWB level is re-scaled to a scale ranging from zero to 100, taking into account the three criteria. Only 42 individuals are 62 years old or more and, in this group, the majority (66.7%) is in the medium-low or medium-high level of FWB. In the most representative group (from 18 to 61 years old), most are also at these levels (52%), but a significant portion has a high (23.7%) and very high (16.1%) FWB score. Whereas, at the two lowest levels, only 8.3% of respondents were classified. Such results indicate that, despite the compromise of the income for the financing of their houses, the beneficiaries, in general, present average to high levels of FWB. The chi-square test indicates that there is no association between the FWB level and the two age categories. These results go against the evidence that older individuals would have higher levels of FWB (Sumarwan,1990Sumarwan, U. (1990). A managerial system approach to factors influencing satisfaction with households’ financial status (Doctoral thesis, Iowa State University, Ames, Iowa, USA).; Xiao, Sorhaindo, & Garman, 2006Xiao, J. J., Sorhaindo, B., & Garman, E. T. (2006). Financial behaviors of consumers in credit counseling. International Journal of Consumer Studies, 30(2), 108-121. doi:10.1111/j.1470-6431.2005.00455.x
https://doi.org/10.1111/j.1470-6431.2005...
; Plagnol, 2011Plagnol, A. C. (2011). Financial satisfaction over the life course: The influence of assets and liabilities. Journal of Economic Psychology, 32(1), 45-64. doi:10.1016/j.joep.2010.10.006
https://doi.org/10.1016/j.joep.2010.10.0...
; Kunkel, 2014Kunkel, F. I. R. (2014). Causas e consequências da dívida no cartão de crédito: Uma análise multifatorial (Dissertação de mestrado, Universidade Federal de Santa Maria, Santa Maria, Brasil).).

In the next step, we sought to confirm the constructs of financial attitude and financial behavior from the confirmatory factor analysis. Figure 4.7 presents the adjustment indexes of the initial and final models.

Figure 4.7
CONSTRUCT ADJUSTMENT INDEXES OF FINANCIAL BEHAVIOR AND FINANCIAL ATTITUDE IN THE INITIAL AND FINAL MODELS

It is possible to notice that the initial models proved to be inadequate. Thus, from the verification of the adjustment indexes, the exclusion of non-significant questions was used as an improvement criterion, followed by the gradual exclusion of questions that did not present satisfactory coefficients. For the financial behavior construct, questions with their respective coefficients were successively excluded: 27 (0.209), 21 (0.289), 26 (0.312), 20 (0.479 and 22 (0.486). A positive correlation was also inserted between the errors of the variables “You start saving more when you receive a salary increase” and “You make a reserve of money that you receive monthly for a future need.” Question 12 was removed for the financial attitude construct, as it had a non-significant coefficient and variables 15 (0.247), and questions 11 (0.288) and 13 (0.327) for having low coefficients. After these adjustments, all models showed satisfactory adjustment indexes, except the Cronbach’s alpha of the financial attitude construct, which was below the desirable level.

Finally, the linear multiple regression model is estimated in order to analyze the influence of the dimensions of financial literacy on FWB (Figure 4.8).

Figure 4.8
RESULTS OF THE REGRESSION MODEL FOR FWB

The estimation by ordinary least squares is adequate, since the model meets the assumptions of the absence of problems related to multicol­linearity, heteroscedasticity and non-normality. The adjusted determination coefficient indicates that 58% of the variation in the perception of FWB can be explained by the variables included in the model.

The three dimensions of financial literacy showed significant and positive coefficients. Among the three dimensions, the one with the greatest impact, with a 0.435 coefficient, is financial behavior, confirming that better financial behaviors imply a significant increase in FWB. Then there is the financial attitude, in which for each increase of a unit on the financial attitude scale, there is an increase of 0.245 in the FWB. And finally, financial knowledge, with a coefficient of 0.113, that is, an increase of one point in the level of financial knowledge implies an increase of 0.113 in the level of FWB. Together, the three dimensions corroborate with the argument that it is not enough for the individual to have the knowledge, but it is also necessary for the individual to show appropriate attitudes and behaviors to achieve a higher level of well-being. Such results are in line with the evidence that points out that financial behaviors (Delafrooz & Paim, 2011Delafrooz, N., & Paim, L. H. (2011). Determinants of financial wellness among Malaysia workers. African Journal of Business Management, 5(24), 10.092-10.100. doi: 10.5897/AJBM10.1267
https://doi.org/10.5897/AJBM10.1267...
; Mokhtar & Husniyah, 2017Mokhtar, N., & Husniyah, A. R. (2017). Determinants of financial well-being among public employees in Putrajaya, Malaysia. Pertanika Journal of Social Sciences & Humanities, 25(3), 1241-1260.), financial attitudes (Joo, 2008Joo, S. (2008). Personal financial wellness. In J. J. Xiao (Ed.), Handbook of consumer finance research (pp. 21-34). New York: Springer.) and financial knowledge (Joo & Grable, 2004Joo, S. H., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues, 25(1), 25-50. doi: 10.1023/B:JEEI.0000016722.37994.9f
https://doi.org/10.1023/B:JEEI.000001672...
; Robb & Woodyard, 2011Robb, C. A., & Woodyard, A. S. (2011). Financial knowledge and best practice behavior. Journal of Financial Counselling and Planning, 22(1), 60-70.; Falahati et al., 2012Falahati, L., Sabri, M. F., & Paim, L. H. (2012). Assessment a model of financial satisfaction predictors: Examining the mediate effect of financial behaviour and financial strain. World Applied Sciences Journal, 20(2), 190-197. doi:10.5829/idosi.wasj.2012.20.02.1832
https://doi.org/10.5829/idosi.wasj.2012....
; BCB, 2017) are determinants of FWB.

Another determinant is income (with a coefficient of 0.200), indicating that increases in income positively influence the level of FWB, which corroborates with previous studies that indicated that individuals with higher income have higher levels of FWB (Delafrooz & Paim, 2011Delafrooz, N., & Paim, L. H. (2011). Determinants of financial wellness among Malaysia workers. African Journal of Business Management, 5(24), 10.092-10.100. doi: 10.5897/AJBM10.1267
https://doi.org/10.5897/AJBM10.1267...
; Gutter & Copur, 2011Gutter, M., & Copur, Z. (2011). Financial behaviors and financial well-being of college students: Evidence from a national survey. Journal of Family and Economic, 32(4), 699-714. doi:10.1007/s10834-011-9255-2
https://doi.org/10.1007/s10834-011-9255-...
; Fraga, Vieira, Ceretta, & Paraboni, 2016Fraga, L. S., Vieira, K. M., Ceretta, P. S., & Paraboni, A. L. (2016). Bem-estar financeiro: Uma análise sob a perspectiva da renda. Revista de Finanças Aplicadas, 7, 1-28., among others). On the other hand, the age variable was not significant (p = .249), contradicting (Sumarwan,1990Sumarwan, U. (1990). A managerial system approach to factors influencing satisfaction with households’ financial status (Doctoral thesis, Iowa State University, Ames, Iowa, USA).; Xiao et al., 2006Xiao, J. J., Sorhaindo, B., & Garman, E. T. (2006). Financial behaviors of consumers in credit counseling. International Journal of Consumer Studies, 30(2), 108-121. doi:10.1111/j.1470-6431.2005.00455.x
https://doi.org/10.1111/j.1470-6431.2005...
; Plagnol, 2011Plagnol, A. C. (2011). Financial satisfaction over the life course: The influence of assets and liabilities. Journal of Economic Psychology, 32(1), 45-64. doi:10.1016/j.joep.2010.10.006
https://doi.org/10.1016/j.joep.2010.10.0...
; Kunkel, 2014Kunkel, F. I. R. (2014). Causas e consequências da dívida no cartão de crédito: Uma análise multifatorial (Dissertação de mestrado, Universidade Federal de Santa Maria, Santa Maria, Brasil).) and suggesting that older individuals have higher levels of FWB.

Regarding the dummy variables, only “having dependents” was significant (p = .011), indicating that having dependents reduces the level of FWB. This suggests that being financially responsible for others reduces the perception of FWB. This result is consistent with those already obtained by Penn (2007)Penn, D. A. (2007). Financial well-being in an urban area: An application of multiple imputation [Working Paper]. Department of Economics and Finance, Paris. and Kunkel (2014)Kunkel, F. I. R. (2014). Causas e consequências da dívida no cartão de crédito: Uma análise multifatorial (Dissertação de mestrado, Universidade Federal de Santa Maria, Santa Maria, Brasil).. For marital status and education, the literature still does not have a consensus; the absence of influence seems to be another possibility.

Therefore, the results of the model confirm the hypothesis raised in the study, that financial literacy acts as a precedent for FWB. The three dimensions contribute positively to FWB, corroborating the argument that an increase in the individual level of financial literacy is essential for them to reach higher levels of FWB.

5. FINAL REMARKS

Measuring FWB is a relevant topic, as financial markets are increasingly complex and, with that, offer individuals a wide variety of investment options, loans, and access to credit. However, many individuals are unaware of the risks and high rates of some financial instruments, which can lead to lower levels of FWB (Schmeiser & Hogarth, 2013Schmeiser, M., & Hogarth, J. (2013). Good advice, good outcomes? How financial advice-seeking relates to self-perceived financial well-being. In Social Science Research Network. [Working Paper]. Retrieved from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2261707
https://papers.ssrn.com/sol3/papers.cfm?...
).

This situation may become even more critical, due to the country’s current financial situation, in which the percentages of indebtedness and defaults in April 2019 totaled 62.7% (percentage of indebtedness), 23.9% (with overdue accounts) and 9.5% (will not be able to pay; Confederação Nacional do Comércio de Bens, Serviços e Turismo, 2019Confederação Nacional do Comércio de Bens, Serviços e Turismo (2019). Pesquisa Nacional de Endividamento e Inadimplência do Consumidor (PEIC) - abril 2019. Retrieved from http://cnc.org.br/sites/default/files/arquivos/analise_peic_abril_2019.pdf
http://cnc.org.br/sites/default/files/ar...
). And with the increase in unemployment, there is a disincentive to saving. This can lead to a lack of resources for essential features of financial security: maintaining a standard of living and FWB. One should also consider the fact that the FWB is a broad aspect, highly interrelated with other aspects of life (suggesting, therefore, its relationship with general well-being, happiness, satisfaction and quality of life; Gutter & Copur, 2011Gutter, M., & Copur, Z. (2011). Financial behaviors and financial well-being of college students: Evidence from a national survey. Journal of Family and Economic, 32(4), 699-714. doi:10.1007/s10834-011-9255-2
https://doi.org/10.1007/s10834-011-9255-...
).

Thus, this work sought to measure the level of FWB of the beneficiaries of the PMCMV and to test the hypothesis that financial literacy is an antecedent of FWB. The results indicated that the majority of the program participants have average levels of FWB. Thus, the hypothesis that financial literacy is an antecedent of FWB was confirmed, since the three dimensions of literacy had a positive impact on FWB. The typical profile for respondents with higher levels of FWB are men, young people, married, with higher education and higher income. Such results indicate that the use of national strategies designed to increase the population’s level of financial literacy must have a direct impact on the level of FWB. In doing so, it corroborates the argument already promoted by some international organizations (e.g. OECD and CFPB), that a measure of success in financial literacy is the FWB. It is also emphasized that, for strategies to be more effective, they need to focus not only on expanding financial knowledge but also using methodologies and content that benefit changes in attitude and financial behaviors.

Despite the limitations inherent in the study, such as the choice of a specific sample group, it is understood that the CFPB scale (2015b)Consumer Financial Protection Bureau (2015b). Measuring financial well-being: A guide to using the CFPB financial well-being scale. Washington, DC: CFPB. Retrieved from https://files.consumerfinance.gov/f/201512_cfpb_financial-well-being-user-guide-scale.pdf
https://files.consumerfinance.gov/f/2015...
presents itself as a potential measure of FWB assessment for the Brazilian context. However, there is still a need for several studies for its validation. Included among these are: its application in different population groups; the use of structural equation modeling to validate the two dimensions proposed by the scale; the application of the Item Response Theory to assess the behavior of questions within the scale and its application (along with other behavioral constructs), in order to assess their discriminating validity and/or confirm their relationships with other factors, such as numeracy, personality traits, and use of other debt instruments (e.g. credit cards).

Appendix


Instrument constructs, questions, and scales

Questions and alternatives for financial knowledge

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Publication Dates

  • Publication in this collection
    17 Mar 2021
  • Date of issue
    2021

History

  • Received
    06 June 2019
  • Accepted
    14 Apr 2020
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