Causes and consequences of financial literacy: insights from the life course paradigm in the United States

Purpose The article provides explanations for the development of financial literacy and its role in promoting the person’s financial well-being over the course of his or her entire adult life. Design/methodology/approach The research employs a recently developed conceptual framework that is based on the life course paradigm, which has been an important development in behavioral and social science in recent decades as a theoretical orientation for researching a wide range of phenomena. The study is based on a sample of 813 participants and was conducted in the United States. Findings The findings provide explanations for the development and changes in financial knowledge and attitudes based on the person’s earlier-in-life experiences and anticipation of life-changing events and role transitions, and they underscore their importance in triggering mechanisms that shape patterns of financial-related thoughts and actions at later stages in life. Originality/value The article offers life course explanations of financial literacy among age cohorts, making time and context relevant dimensions of theory and analysis.