New study finds a combination that can lead to financial success
Successful outcomes for personal finances are likely to be aided by a good grasp of math but there’s another element that is vitally important.
And that’s confidence in the ability to use those number skills according to new research from Ohio State University which found that a lack of numeric confidence can essentially wipe out a person’s good math skills.
Ellen Peters, professor of psychology, said that having high confidence in their math ability compared to low confidence was the equivalent of having $94,000 more in annual income.
“If you have low numeric confidence, all the math skills in the world appear not to help much,” said Peters, who is now at the University of Oregon. “We think that those who lack confidence don’t persist with the numbers when the going gets tough or tedious. As a result, their skills aren’t used.”
Peters and her team analyzed results from a USC study which reported various financial outcomes including credit card debt, investments, and whether they had payday loans.
Results showed that the interaction between participants’ objective math scores and their numeric confidence predicted how well they were doing financially.
Researchers also looked at a second study and found a link between confidence in math skills and better outcomes from illness.
It takes good math skills to navigate the disease, such as understanding the risks and benefits of drugs, using correct drug doses and making good health insurance and provider choices, Peters said.
The results suggest that efforts to improve people’s math skills or their numeric confidence alone may not be helpful.
“More of one is not necessarily better if you don’t increase both,” Peters said.
She added that the best advice for everyone should be to understand their skills. For some, that may mean to “be open to the possibility that you’re good at math,” she said. For others, it may mean asking for and accepting help as needed.