Authors

• Kalmi, Panu (University of Vaasa. Department of Accounting and Finance)
• Ruuskanen, Olli-Pekka (University of Tampere. Faculty of Management)

Keywords

consumption, economic conditions, expenditure, income, insurance, personal finance management, planning, savings

Abstract

This survey studied the financial awareness and knowledge of people living in Finland, and their views on financial issues. The survey is based on the OECD financial literacy questionnaire and methodological guidance developed by the International Network on Financial Education (INFE). Data collection was conducted by TNS Gallup Finland. The survey was financed by Academy of Finland (269130), OP Group Research Foundation (OP-Pohjola ryhmän tutkimussäätiö), Foundation for Economic Education (Liikesivistysrahasto), Vaasan Aktiasäätiö, and Finnish Foundation for Share Promotion (Pörssisäätiö). Main themes included management of personal finances, consumption and saving behaviour, insurances, preparedness for retirement, financial knowledge in general, over-indebtness, own financial abilities and trust in financial institutions. The respondents were also asked to evaluate their financial decisions and the influences behind their decisions.

The respondents' management of daily finances was charted with questions on whether the respondents planned their personal or household's consumption beforehand (e.g. by making a budget) and what methods they used for planning and monitoring their finances (e.g. online banking). Some questions focused on the financial products (e.g. credit cards, bank accounts, debts, insurances, investments) that the respondents used and where they got information on these products. General attitudes towards personal finance management were studied through statements relating to, for example, paying bills on time, taking risks in life, monitoring of finances and worrying about the future. Ways of dealing with insufficient income to cover costs were also charted (e.g. whether the respondents borrowed food or money from family or friends).

Saving behaviour was investigated by asking the respondents, for example, whether they saved money on their disposal account or invested in shares, and for how long they could live on their savings if their main source of income was lost. Attitudes towards and awareness about insurances were studied through statements concerning, for example, the necessity of insurance for families and the understandability of contents and conditions of different insurances. Next, the survey charted whether the respondents were self-employed and how they prepared for retirement (for example, how the respondents used pension insurance for the self-employed (YEL), whether they knew which pension insurances they were entitled to, and whether they thought that they were saving enough money for retirement).

The respondents' financial knowledge was assessed by asking questions about the economy and different financial issues (e.g. interest and inflation). Knowledge and experiences about over-indebtness were charted through questions concerning, for example, defaults on debts, payments or repayments and the respondents' own debt situation. The respondents' awareness was examined on whether they knew where they should appeal a decision made by a bank or insurance company if they were not satisfied with it. Finally, the survey charted abilities, satisfaction and trust in financial issues and institutions (e.g. how the respondents would describe their own abilities in making good financial decisions, whether they were satisfied with their life overall, and whether they thought that banks, insurance companies or the justice system could be trusted).

Background variables included, among others, gender, age, marital status, household composition, gross annual income of the respondent and household, highest level of education, as well as NUTS2 and NUTS3 regions of residence.