How Does Consumers’ Self-Control Predict Financial Behavior and Financial Resilience?

Abstract

This paper examines the association between self-control and consumer financial resilience. Applying Partial Least Square Structural Equation Modelling (PLS-SEM) on data sourced from the Consumer Financial Protection Bureau (CFPB), our study shows that along with the demonstrated direct relationship between self-control and consumer financial resilience, the benefit of financial practice through daily management plays a key mediating role, positively impacting consumer financial resilience. Leveraging the economic theory of the Behavioral Life-cycle (BLC) Hypothesis, our results suggest that the benefits of self-control on financial resilience largely depend on the cultivation of positive financial actions, which are reinforced through active financial management.