Journal of Family and Economic Issues

, Volume 35, Issue 1, pp 40–50

Financial Literacy and Emergency Saving

Original Paper

DOI: 10.1007/s10834-013-9369-9

Cite this article as:
Babiarz, P. & Robb, C.A. J Fam Econ Iss (2014) 35: 40. doi:10.1007/s10834-013-9369-9


Using data collected by the National Financial Capability Study, a survey recently commissioned by the Financial Industry Regulatory Authority, this paper investigates the correlations between subjectively and objectively assessed measures of financial knowledge, and the probability of having savings adequate to cover 3 months of typical expenses. Results indicate that households who are more financially knowledgeable or more confident in their financial ability are significantly more likely to report having emergency funds. These findings support the growing literature on the relationship between financial knowledge and economic behaviors and have wide policy implications.


Financial literacy Financial knowledge Emergency savings Precautionary savings 

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.Department of Consumer SciencesThe University of AlabamaTuscaloosaUSA
  2. 2.Institute for Personal Financial PlanningKansas State UniversityManhattanUSA

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