Financial Responsibility, Personality Traits and Financial Decision ...

if respondents score high on financial literacy. This effect, however, weakens when
considering the actual savings behavior instead. Based on a set of four questions that
relate to actual saving behavior, only 23 percent of our savers actually exhibit financial
planning and savings behavior. This observed savings behavior is stronger when income
is higher, respondents are older and household size is modest. We find that when it
comes to skills and interests, that savings behavior is stronger among the more financial
literate and among those who are more financially interested. But this effect is mild
when compared to the factors related to the respondents attitude and personality.
Here we find that inclination to actually save money for later is strongest among the
respondents with the strongest locus of control and the lowest scores on chance. Both
psychometric constructs measure the extent to which respondents feel that they have
control over their life and future. The stronger this feeling of control, the more they
are willing to save, and the greater the financial responsibility taken. This is likely to
be related to upbringing. We detect a link between parents and the savings behavior
of their children. Respondents, whose parents have saved for their education, are more
likely to grow up as savers themselves. Encouraging personal financial decision-making
is a question of education and upbringing, but also on developing and forming policies,
which encourage affirmative actions stemming from greater personal responsibility. The
results in this paper provide strong evidence that financial decision making depends on
the human element of the ability to take responsibility for ones own actions. As a
society, and looking beyond the empirical results found here, encouraging behavior to
enhance savings and retirement provision is more likely to be affective through the
mechanism of self reliance and learning to take responsibility of ones own actions than
purely through programs to develop financial knowledge alone.
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