The Role of Cognitive and Non-Cognitive Characteristics in Financial Behaviors and Financial Literacy

This study analyses the importance of cognitive and non-cognitive characteristics in financial behaviors and financial literacy. To do so, we carry out a comprehensive review of empirical literature that has tried to analyze the effects of each of these variables. Two primary conclusions are drawn: i) cognitive characteristics and different sub-facets of conscientiousness - the propensity to plan and self-control - are related to making appropriate financial decisions; and ii) financial literacy seems intrinsically linked with cognitive characteristics. The results of our review serve as an invitation to incorporate these variables in the design of financial literacy programs