Financial Self-Efficacy

Financial self-efficacy refers to individuals’ perceived ability to manage their finances (Lapp 2010). It is related to individuals’ self-confidence to carry out a financial management task (Lown, 2011) and could reflect their financial skills. A recent study by Lapp (2010) from the EARN Institute shows financial self-efficacy as the missing link between knowledge and effective action. So changes in individuals’ financial self-efficacy as a result of financial capability programs could lead to longer-term behavioral changes.

 Programs should compare data annually. Client data could be collected at intake/enrollment and at termination/exit from program (pre-post assessment). A higher rate of financial self-efficacy is considered positive.


Sources Cited

Lapp, W.M. (2010). The Missing Link: Financial Self-Efficacy’s Critical role in financial Capability. EARN Research Institute. Accessed July 7, 2013 at

Lown, J.M. (2011). Development and Validation of a Financial Self-Efficacy Scale. Journal of Financial Counseling and Planning, 22(2), 54-63.

Additional Resources

NeighborWorks’ Success Measures Tools for Practitioners