Self-efficacy and Savings Among Middle and Low Income Households

• Published in: Journal of family and economic issues Vol. 36; no. 4; pp. 491 - 502
• Main Authors: Lown, Jean M., Kim, Jinhee, Gutter, Michael S., Hunt, Anne-Therese
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.12.2015; Springer Nature B.V
• Subjects: Behavior; Borrowing; Collaboration; Consumption; Economic models; Economic statistics; Economic theory; Family; Households; Hypotheses; Income; Low income groups; Middle class; Original Paper; Perceptions; Personal finance; Personality and Social Psychology; Savings; Self-efficacy; Social classes; Social Policy; Social Sciences; Socioeconomic factors; Sociology; Studies; Saving; Self-efficacy; Middle and low income
• ISSN: 1058-0476; 1573-3475
• DOI: 10.1007/s10834-014-9419-y

Based on Social Cognitive Theory, this exploratory study examined the relationship between self-efficacy and saving among a sample of middle and low income households. Logistic regression was used to test the hypothesis that higher levels of self-efficacy are associated with greater likelihood of saving when controlling for age and income levels. The results show that higher self-efficacy, older age, and middle incomes are associated with a higher likelihood of savings. When controlling for age and income, respondents with low self-efficacy were only 60% as likely to save as those with high self-efficacy scores. The results confirm that saving behavior is associated with general self-efficacy. Enhancing self-efficacy for middle and low income individuals may encourage saving. Implications of this research suggest a need for additional research to further explore this relationship and how it might be used to enhance outreach aimed at improving savings behavior.