Do Future-Oriented People Save More? The Mediating Role of Financial Knowledge in the Relationship between Future Orientation and Personal Financial Security

Abstract

Objective: The aim of this research is to evaluate the effect of financial knowledge and orientation towards the future in the level of personal financial security, and, additionally, to assess whether financial knowledge is a mediating variable in the relationship between orientation towards the future and personal financial security.

Method/approach: This quantitative study of a descriptive nature is based on an online survey that was conducted with 378 participants aged 25-50.

Main Results: The analysis of the mediation model revealed that the greater the orientation towards the future, the greater the interest in financial knowledge and the greater the individuals’ financial security.

Theoretical contributions: The mediation effect represents an important theoretical contribution, since it shows that a psychological factor (the temporal orientation) not only interferes in the saving behavior of individuals, but also increases the propensity to seek financial knowledge.

Relevance/Originality: Understanding which factors are associated with the decision to save is essential for the promotion of a more savings-oriented culture, which tends to reduce the financial vulnerability of households. Thus, this study makes an original analysis of the concomitant effect of the variables financial knowledge and future orientation on personal financial security.

Managerial implications: These results are relevant for the creation of financial education programs for public and private institutions, since they highlight the importance of raising people's awareness of future orientation prior to exposure to financial education content.