Exploring Relationship between Financial Literacy and Quality of Life

Abstract

Financial literacy is one of four key factors, along with sufficient income, access to suitable and affordable financial products and appropriate regulation, identified as necessary for individuals to achieve positive financial outcomes and secure financial well-being. Financially literate consumers are more likely to be informed and confident, and therefore, better able to participate in economic life. Participation in economic life affects quality of life, the opportunities that people can pursue, their sense of security, and the overall economic health of society. The present research is designed to explore the relationship between financial literacy and quality of life. The research is composed of 600 people living in the neighborhood of Çankaya district in Ankara, Turkey. On average, the participants performed lower in the questions assessing formal financial literacy (5.2). There was a slight difference for average scores based on gender. On average, male participants scored slightly higher (5.88) compared with females (4.44). The study finds that there is relationship between financial literacy and quality of life. The findings have important implications for policy-makers, educators, regulators, and researchers interested in financial literacy and quality of life. In relation to consumer protection, when people have higher levels of financial literacy, this can result in more quality of life.

Keywords: Financial Literacy; Quality of Life; Financial Well-Being

Australian Academy of Accounting and Finance Review, vol 2, issue 4, October 2016, page 296-309