More than objective knowledge: Exploring heterogeneity in individuals' response to a financial education initiative across multiple financial literacy domains

Whereas prior financial education research has focused on increasing objective financial knowledge , recent research highlights the importance of also accounting for individuals' subjective financial knowledge, financial attitudes, and beneficial psychological traits related to personal financial management. However, a holistic perspective of how financial education changes these different domains of financial literacy is lacking, and insights into potential heterogeneity in individuals' response to education interventions is missing. We utilize data from a personal financial management unit at a large Australian university to address this literature gap. We employ Latent Transition Analysis to identify six latent financial literacy states and find that financial education, together with confidence in financial information search, can explain transitions to higher objective and subjective financial knowledge states, more positive financial attitudes, and more beneficial psychological traits related to managing personal finances. We highlight variation in unit response across states, providing practitioners and policy makers with actionable insights. • Sample of undergraduate university students grouped into latent financial literacy “states” characterised by multiple characteristics relevant to personal financial management. • States characterised by objective and subjective financial knowledge, financial self-efficacy, propensity to plan for money, financial risk tolerance, and personal saving orientation. • Individuals transition through states predicted by personal characteristics (e.g., gender, study major) and completion of financial education unit. • Approach allows consideration of heterogeneity in both state membership and factors that can explain transition between states.