J Fam Econ Iss (2013) 34:275–284 DOI 10.1007/s10834-012-9330-3

ORIGINAL PAPER

Financial Literacy: Building Economic Empowerment with Survivors of Violence Judy L. Postmus • Sara-Beth Plummer Sarah McMahon • Karen A. Zurlo

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Published online: 8 August 2012  Springer Science+Business Media, LLC 2012

Abstract The purpose of this paper is to outline key constructs including financial literacy, economic self-efficacy, economic self-sufficiency, and economic empowerment, and then present findings from an exploratory study that sought to understand the relationship among these variables in a sample of abused women. The results revealed positive and significant relationships between financial literacy with economic empowerment, economic self-efficacy and economic-self sufficiency. Results also indicated that financial literacy, race, and economic self-sufficiency were significant predictors of economic empowerment. By focusing this research on abused women, it is our intention to raise awareness about the importance of financial literacy curricula with advocates, policy-makers and researchers, so more focus can be given to economically empowering IPV survivors. Keywords Economic empowerment
Financial literacy
Intimate partner violence

With higher consumer debt, low household saving rates, and the increased complexity of financial information, the public and private sectors have urged the creation of financial education programs to increase consumer J. L. Postmus (&)
S.-B. Plummer
S. McMahon
K. A. Zurlo Center on Violence Against Women & Children, School of Social Work, Rutgers University, 536 George Street, New Brunswick, NJ 08901, USA e-mail: [email protected] S.-B. Plummer e-mail: [email protected] S. McMahon e-mail: [email protected] K. A. Zurlo e-mail: [email protected]

knowledge about financial management skills (Hopley 2003; Hilgert et al. 2003; GAO 2004; Gudmunson and Danes 2011). Failing to manage personal finances can lead to serious and long-term social and personal consequences, including bankruptcies, credit problems, poor savings, impulse buying, unpaid bills, debt delinquencies, and home foreclosures (Perry and Morris 2005; DeVaney et al. 1996). Between 2001 and 2007, estimates of the annual, personal saving rate in the U.S. were 0–1 % (Bucks et al. 2006, 2009). Additionally, in 2005, over two million bankruptcy cases were filed by couples or individuals in the U.S.; in 2010, the number of cases was almost 1.6 million (Administrative Office of the US Courts 2011). Researchers reported that ten million low and moderate income households do not have bank accounts (Hopley 2003); and more specifically, 35–45 % of low-income households (i.e., households below 200 % of the poverty line) did not have bank accounts during the 1980–1990s (Washington 2006). The call for financial education and literacy programs is more urgently needed than ever before. Women are at risk of experiencing situations that leave them in worse financial shape (DeVaney et al. 1996; Hopley 2003; Malone et al. 2009; Tamborini et al. 2011). For example, women outlive men, but earn less, save less, drop in and out of employment, and suffer more financially from divorce than men (DeVaney et al. 1996; Schmidt and Sevak 2006; Tamborini et al. 2011). Indeed, one recent study indicated that women, with low income, felt trapped in their marital relationships (Schramm and Harris 2011). Additionally, women are at greater risk of experiencing intimate partner violence (IPV) than men; for those survivors, the need for financial education is heightened. IPV survivors experience many forms of abuse, with physical, sexual, and psychological abuse as the more commonly identified and understood forms. Yet, an abuser may also use economic

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abuse as one of his tactics to control his1 partner by denying or hampering her ability to become economically self-sufficient (Adams et al. 2008; Fawole 2008). Indeed, even if a victim has a job or career, her partner may block her access to those funds or she may be economically dependent on him. With economic concerns listed as the top barrier to leaving the abuser (Zorza 1991; Sanders and Schnabel 2006; Turner and Shapiro 1986; Postmus et al. 2012), IPV survivors are one of the many groups in need of financial education programs, especially those that educate on economic abuse and create economic safety plans. As the need for financial education programs for IPV survivors becomes apparent, it is important to first understand the construct of financial literacy. The purpose of this paper is to outline key constructs including financial literacy and economic empowerment, and then present findings from an exploratory study that sought to understand the relationship among these variables. We conclude this article by discussing the implications of the study and suggest future directions for research and practice.

Key Definitions Although many researchers and advocates recognize the importance of financial literacy in the lives of survivors, it is imperative to clearly define several key terms emerging in the field. First, the term empowerment is frequently utilized by advocates working with survivors to describe a particular approach to providing survivors with the knowledge and skills to make positive changes in their own lives. Indeed, empowerment is defined as a process in which women gain control or power over their own life (Kasturirangan 2008). Empowerment can encompass many domains of an individual’s life, including one’s personal financial abilities. Hence, economic empowerment addresses an individual’s knowledge, skills, and confidence to address her own financial well-being. Economic empowerment provides a comprehensive theme that encompasses economic self-efficacy and economic self-sufficiency, and is enhanced by financial literacy (Postmus 2010). Economic self-efficacy is defined as the intrapersonal belief that one has the resources, options, and confidence to be financially successful (Gowdy and Pearlmutter 1993; Perry and Morris 2005; Vitt et al. 2000). Borrowing from the self-efficacy literature (Bandura 1982), economic self-efficacy can be defined by measuring how confident one feels 1

We specifically talk about violence against women in this paper since women disproportionately represent victims and males as perpetrators of physical, sexual, and other forms of violence. Hence, we will refer to victims as female and perpetrators as males. This in no way diminishes the experiences of male victims nor absolves females of violence they might inflict upon males or other females.

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completing financial tasks based on one’s current economic situation. Economic self-sufficiency, another component of economic empowerment, is defined as the manifestations of a wide range of skills related to financial management (Gowdy and Pearlmutter 1993). Recently, others have suggested to define these financial skills as financial capabilities as a broader concept that defines what individuals can do without measuring if they are proficient in demonstrating skills (Gudmunson and Danes 2011; Johnson and Sherraden 2007). In essence, one is economically self-sufficient when one is capable to master financially-related tasks. Financial literacy is one avenue to reach economic empowerment, and includes the knowledge and skills needed to ‘‘discern financial choices, discuss money and financial issues without (or despite) discomfort, plan for the future, and respond competently to life events that affect everyday financial decisions’’ (Vitt et al. 2000). While this definition includes financial behaviors, most financial literacy definitions focus on the knowledge gained from financial education. Such knowledge includes knowing how to prepare and follow a budget, balance a checkbook, invest, manage credit, and save for the future (GAO 2004; Beverly 2005). Indeed, others have determined that financial literacy includes understanding a wide range of economic matters such as how the economy works and how to be a part of the economy through work (Engelbrecht 2008). Financial literacy may be acquired through formal sources, such as education, professional training or seminars, and informal sources, such as family or friends (Perry and Morris 2005). In sum, when knowledge and skills (financial literacy) are gained, they may lead to economic empowerment which includes a greater confidence (economic self-efficacy) and an ability to demonstrate effective financial behaviors (economic self-sufficiency). Empowerment is often embraced by advocates who encourage survivors to make decisions and choices about their lives (Kim et al. 2007). Since survivors typically have their power limited or taken away by their abuser, they often lose their ability to obtain the needed resources to achieve their financial goals. This removal of power often leaves survivors with less financial knowledge (i.e., financial literacy), less confidence (i.e., self-efficacy), and fewer abilities to manage their finances (i.e., economic self-sufficiency). Economic empowerment provides survivors with the opportunity to gain or regain their financial independence. Often, the vehicle to promote such empowerment comes through financial literacy programs.

Understanding Financial Literacy Financial literacy has garnered greater attention especially in current times of economic crisis and distress for individuals, families, organizations, and communities. Much of

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this attention is due to the compelling evidence that indicates an association between financial literacy and financial well-being (Gudmunson and Danes 2011; Gutter and Copur 2011; Joo and Grable 2004). Households with low levels of financial literacy are typically at risk of poor financial outcomes throughout the lifespan, namely low saving and investments and high credit card and mortgage debt (Braunstein and Welch 2002). Indeed, technological changes and market innovation, a rise in questionable mortgage lending practices, and an increase in consumers’ abilities to access credit quickly have prompted an increased attention on financial literacy (Braunstein and Welch 2002). Financial literacy, the digital divide, and other issues that separate disadvantaged groups from the financial mainstream make it difficult for low- to midincome families to reap potential benefits associated with computer banking (Servon and Kaestner 2008). Additionally, immigrants may not be as familiar with financial practices in the U.S. and may, instead, use alternative providers like check cashing and payday loans and services, pawnshops, and rent-to-own providers (Braunstein and Welch 2002). Research suggests that financial literacy in America needs to be improved. DeVaney et al. (1996) summarized several research articles whose implications indicated that many American households do not use or follow a budget due to a lack of income or an irregular source of income. More recent studies indicated that adult consumers (over 45) lacked knowledge of basic financial and investment terms (GAO 2004); another study with adolescents revealed that only 52 % of students could successfully answer questions on basic personal finances (Danes et al. 1999). Further, Americans who are poor are also less likely to have bank accounts or invest and are more likely to be vulnerable to predatory lending practices (Zhan et al. 2006). It is clear from the review of the literature that further work is needed to understand the various components of financial literacy and how financial literacy relates to economic empowerment. Before evaluating the effectiveness of financial literacy programs, it is important to first clarify the desired outcomes and their relationship to one another. As such, the purpose of the current study is to uncover the relationship between economic empowerment and financial literacy, economic self-sufficiency, and economic self-efficacy. The current study is a part of a larger study, where survivors were interviewed on three separate occasions over a period of 11 months. This paper reports on the first wave of interviews with data collected by the lead authors during the summer of 2008. The questions guiding this exploratory study include: (1) What is the level of financial literacy among the sample of IPV survivors? (2) Are there

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significant differences in financial literacy based on several key demographic variables? (3) What is the relationship between financial literacy and economic empowerment, economic self-efficacy, and economic self-sufficiency? (4) Does financial literacy predict economic empowerment?

Methods To answer these research questions, this study explored baseline information from a cross-sectional sample of participants in the Moving Ahead Through Financial Management program, created by The Allstate Foundation in 2005 in partnership with NNEDV. The program provides advocates with financial education and strategies to implement economic literacy programs with IPV survivors. The current study utilized the first wave of data. Participants Domestic violence programs selected for the study included those who received grants from The Allstate Foundation to implement the curriculum; survivors from 15 programs, from ten states agreed to participate in this study. The staff from these programs were asked to distribute flyers to all of their clients learning the curriculum; criteria for the study included survivors over 18 years of age and those who had attended at least one individual or group session on the curriculum. The flyers contained information about the research project and listed how to contact the researchers through a 1–800 number if interested in participating. The research team, who had worked with survivors in the past, took precautions, talking with survivors in a safe and sensitive manner. One hundred and twenty female survivors of IPV chose to participate in the first wave of this study; the one male respondent in the study was removed from the analysis. Ages ranged from 18 to 73, with a mean age of 39 (SD = 11.5). Over half the participants were Caucasian (55 %); the remaining sample included African Americans (20 %), Latinas (18 %), and those who identified as ‘‘Other’’ (7 %). Almost half of the participants (49 %) reported an annual income between $0 and $10,000 and 12 % earned between $10,000 and $15,000. A little more than a quarter of the participants (26 %) earned an income between $15,001 and $25,000, whereas 9 % earned between $25,001 and $35,000 a year. Only 4 % earned more than $35,000 annually. Most respondents had either completed high school (31 %) or had some college education (49 %); 20 % of participants reported having less than a high school education. At the time of the interview 65 % of the participants were employed; of those employed, 63 % were working full-time jobs, 29 % were

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working part-time, and 8 % were working both full-time and part-time jobs. Finally, the majority of participants (37 %) received services from a domestic violence organization for 5 months or less, 30 % received between 6 and 23 months of services, and 33 % received services for more than 2 years. Data Collection The research team members scheduled a 1 h in-person interview with individuals who contacted the researchers and expressed an interest in participating in the study. Interviews were conducted at mutually agreed upon locations, including the domestic violence agencies, libraries, and work readiness program offices. During the face-toface interview, the survey was made available to the participants in both paper and online format through Zoomerang, a web-based survey tool. All of the participants signed IRB approved consent forms prior to the start of the interview. A $25 gift card was provided for participation in this first wave of the evaluation. Measurements The survey instrument was comprised of validated or revised scales that measured financial literacy, economic empowerment, economic self-efficacy, economic self-sufficiency, economic abuse, and IPV (i.e., physical and psychological). An Advisory Committee comprised of representatives from The Allstate Foundation and NNEDV reviewed the instrument prior to the implementation of the research study, suggested the inclusion of additional items to the financial literacy scale, and then concurred that the measures have face validity. Financial Literacy In order to measure the participant’s level of economic knowledge, a financial literacy scale was designed based on topics covered in the curriculum. Fifty-one items comprise the financial literacy scale, which measured participant knowledge of financial topics using a 4-point scale, with answers ranging from 1 (not true) to 4 (very true). Since this financial literacy scale was new and untested, an exploratory factor analysis (EFA) utilizing principal axis factoring was conducted. From the EFA, the original 51 items were reduced to 13, comprising four factors named Knowledge about Credit (4 items, a = 0.86), Knowledge about Obtaining Resources (3 items, a = 0.820), Knowledge about investing and long-term planning (4 items, a = 0.87), and Knowledge about Joint Assets with Partner (2 items, a = 0.825). Total variance explained by the EFA was 65.23 %, a = 0.88.

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Economic Empowerment Participants were asked to rate their level of perceived economic empowerment utilizing the family empowerment scale (FES), a previously validated empowerment scale (Koren et al. 1992). The FES has been adapted and used in several studies (Florian and Elad 1998; Walsh and Lord 2004), including research with battered women (Itzhaky and Porat 2005; Plummer 2007). The original scale has demonstrated reliability and validity with a kappa coefficient of 0.77 and alpha coefficients ranging from 0.87 to 0.88 for each of the subscales (Koren et al. 1992). In this study, the authors revised the FES by changing the language of the items to reflect the economic context of the current research (e.g., ‘‘I feel confident in my ability to help my child grow and develop’’ was changed to ‘‘I feel confident in my ability to help myself grow and develop financially’’). Participants rated their perceived level of economic empowerment using a 5-point scale with possible answers ranging from 1 (not true at all) to 5 (very true). The original FES is separated into three different sub-scales to capture three levels of empowerment; however, since the original scale was revised to capture economic empowerment levels, another EFA utilizing principal axis factoring was conducted. From this EFA, the original 34 items from the FES was reduced to 17 items (a = 0.88) comprising four factors including: Intrapersonal Economic Empowerment, measuring an individual’s internal empowerment (6 items; a = 0.84); Professional Interactional Empowerment, measuring how empowered one feels when interacting with human service professionals (4 items; a = 0.73); Peer Interactional Empowerment, measuring how empowered one feels when interacting with other women (3 items; a = 0.77); and Financial Institution Empowerment, measuring how empowered one feels when interacting with financial institutions (4 items; a = 0.84).

Economic Self-Efficacy Economic self-efficacy was measured using a five-item sub-scale entitled the Financial Self-Efficacy Scale, obtained from the Domestic Violence Related Financial Issues Scale (DV-FI) (Weaver et al. 2009). Participants rated their level of financial self-efficacy using a 7-point scale, with answers ranging from 1 (not at all confident) to 7 (completely confident). The participants were asked to rate the confidence in their ability to complete the financial tasks based on their economic situation over the last 30 days. This sub-scale has demonstrated high internal consistency with a Cronbach’s alpha of 0.86 (Weaver et al. 2009) and 0.75 for this current sample.

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Economic Self-Sufficiency The Women’s Employment Network (WEN) Economic Self-Sufficiency Survey (Gowdy and Pearlmutter 1993) is a 15-item scale that asks participants to indicate how often they have been able to accomplish financially-related tasks regarding their economic situation during the 30 days prior to the interview. Participants rated their level of financial self-sufficiency using a 5-point scale with answers ranging from 1 (no, not at all) to 5 (yes, all of the time). The measure has shown a high level of reliability with a Chronbach’s alpha of 0.89; internal reliability was also high with this sample at 0.93. Economic Abuse The scale of economic abuse (SEA) (Adams et al. 2008) identified the frequency of economic abuse the participants experienced in their relationships. Participants were asked to rate how often a partner had exhibited financially abusive behaviors in the last year or, if they were no longer with the partner, within the last year of their relationship. Participants indicated the frequency of these abusive activities using a 5-point scale with answers ranging from 1 (never) to 5 (quite often). Because the SEA is a new scale and relatively untested, we ran an EFA utilizing principal axis factoring. From the EFA, the original 28 items were reduced to 12 items comprising three factors named economic control (5 items), employment sabotage (4 items), and economic exploitation (3 items). Cronbach’s alpha indicated good internal consistency reliability for the 12-item SEA (a = 0.90) and its subscales, economic control (a = 0.88), employment sabotage (a = 0.86); and economic exploitation (a = 0.90).

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demonstrated good internal reliability in the current sample (physical abuse, a = 0.91; and psychological abuse, a = 0.93). Demographics Several demographic questions were also included in the interview such as age, gender, race, level of income, education, and length of time participants received services from the advocacy organization. Data Analysis All data were extracted from an Excel spreadsheet created by Zoomerang and imported into SPSS 16.0. The data were then cleaned and spot checked to identify any discrepancies. Descriptive statistics were run to determine the level of financial literacy in the sample. One-way ANOVAs were conducted to test whether levels of financial literacy varied by demographics: age, race, income, education, experiences of physical, psychological, and economic abuse, and length of services received. Correlations were also run to identify relationships between financial literacy and the remaining variables. Lastly, a regression was run to determine if financial literacy predicted economic empowerment, controlling for economic self-sufficiency, self-efficacy, economic abuse, IPV, and several demographic factors including age, income, race, and education.

Results Levels of Financial Literacy

Intimate Partner Violence Intimate partner violence was assessed using a modified version of the abusive behavior index (ABI) (Shepard and Campbell 1992). The original ABI includes 30 items and two sub-scales, physical abuse (10 items) and psychological abuse (20 items). For the current study, one item from the physical subscale and four items from the psychological subscale were eliminated by the research team and community partners because they were redundant and already captured in the economic abuse scale. Participants indicated how often a partner had committed specific abusive acts over the last year, or within the last year of their relationship if they were no longer with the partner. The survey used a 5-point scale with answers ranging from 1 (never) to 5 (very often). The ABI has exhibited good reliability and construct validity in previous studies (Shepard and Campbell 1992). Both sub-scales

The first research question assessed the level of financial literacy in a sample of survivors. On a scale of 1 (not true) to 4 (very true), the participants demonstrated some moderate levels of financial literacy (M = 2.91, SD = 0.63). Items the participants understood the most included how to review personal credit history, what community resources and public assistance benefits are available, and the community resources that are available to assist with the financial challenges that might be encountered when deciding to leave an abuser. Items least understood centered on the participant’s lack of knowledge about investing and long-term planning including individual development accounts (IDAs), earned income tax credits (EITCs), estate planning, and investment opportunities. Descriptive statistics including the means and standard deviations for all of the financial literacy scale items are provided in Table 1.

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280 Table 1 Means and standard deviations for financial literacy (n = 120)

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Item

Mean

SD

Knowledge about credit How to review my credit history

3.23

0.92

How to review and understand my credit report and credit history

2.90

0.99

How to improve my credit rating

2.79

1.0

What to expect if I try to get a loan

2.78

0.97

Overall mean = 2.92 (SD = 0.82) Knowledge about obtaining resources What community resources and public assistance benefits are available

3.20

0.90

The resources that are available in my community to assist me with the financial challenges I might encounter if I decide to leave my abuser

3.14

0.86

How to get financial and legal assistance through local resources

3.02

0.94

Planning for retirement and the different types of plans available

2.16

0.97

How to invest my savings through things like savings bonds, mutual funds, and stocks

2.15

1.0

Estate planning

2.04

1.0

Community programs such as IDAs and EITCs

1.90

0.96

Overall mean = 3.11 (SD = 0.77) Knowledge about investing and long-term planning

Overall mean = 2.86 (SD = 0.69) Scale of 1–4; (1) not true, (2) somewhat true, (3) true or (4) very true. Each participant was asked …’’I have a good understanding of …’’

Knowledge about joint assets with partner How to identify joint or combined financial responsibilities and assets

2.77

0.99

How to identify my partner’s assets and financial responsibilities

2.56

1.0

Overall mean = 2.70 (SD = 0.95)

Relationship Between Financial Literacy and Demographics

Table 2 Correlations (n = 120)

The second research question for this study determined whether certain key demographics impacted levels of financial literacy. Findings from the ANOVAs were not significant, suggesting that levels of financial literacy did not differ significantly among the demographics including, age, income, race, education level, and length of service.

1. Financial literacy 2. Economic empowerment 3. Economic self-efficacy 4. Economic self-sufficiency 5. IPV 6. Economic abuse

Relationship Between Financial Literacy and Other Key Variables The third research question explored the relationship between financial literacy and other key variables. Bivariate correlations were run to test the relationship between financial literacy and economic variables (economic empowerment, economic self-efficacy and economic selfsufficiency) and abuse variables (physical, psychological, and economic abuse). Results reveal positive and significant relationships between financial literacy with economic empowerment, economic self-efficacy and economic-self sufficiency variables, with correlations ranging from 0.22 to 0.55. The detailed results of the significant correlations are provided in Table 2.

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1

2

3

4

5

-.194 -.123

0.775**

0.550** 0.318**

0.516**

0.222*

0.407**

0.519**

0.069 0.094

0.003 0.046

-0.090 -0.033

* p \ 0.05 ** p \ 0.01 *** p \ 0.001

Financial Literacy and Predicting Outcomes Ordinary least squares (OLS) multiple regression was conducted to examine the fourth research question, whether financial literacy would predict participants’ level of economic empowerment, controlling for demographics (age, race, education, length of service and income), economic self-sufficiency, economic self-efficacy, and abuse (i.e., economic and IPV).

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Using economic empowerment as a dependent variable, results from the regression analysis indicated that financial literacy, race, and economic self-sufficiency were significant predictors of economic empowerment. Financial literacy (b = 0.46, SE = 0.10, p \ 0.01), identifying as Latina (b = 0.19, SE = 0.15, p \ 0.05), identifying as Other (bi-racial, etc.), (b = 0.26, SE = 0.21, p \ 0.01), and economic self-sufficiency (b = 0.21, SE = 0.07, p \ 0.05), were all associated with higher levels of economic empowerment. This model explained 53.7 % of the variance, F (19, 83) = 6.07, p \ 0.00 (see Table 3).

281 Table 3 Financial literacy and economic empowerment (n = 120) Unstandardized B Financial literacy

Standardized

0.10

0.46**

IPV

0.08

0.10

0.11

Economic abuse

0.08

0.09

0.12

Length of service (ref. = more than 24 months) Less than 6 months

-0.08

0.14

-0.06

Between 6 and 24 months

-0.11

0.14

-0.07

-0.05 -0.10

0.12 0.15

-0.03 -0.06

-0.06

0.14

-0.05

0.14

0.19

0.07

Age (ref. = \30 years) 31–40 years 41–50 years

Discussion and Implications

0.50

SE

51?

Education (ref. = high school diploma)

This exploratory study contributes to our limited body of knowledge on financial literacy among IPV survivors. This research is timely because financial literacy is receiving significant attention from policy-makers, government officials, and educators. Researchers have reported that financial literacy levels are low among sub-groups of Americans, namely women, older adults, minorities, and teens. This study corroborates those findings by supporting the hypothesis that IPV survivors, who are predominantly women, have limited levels of financial literacy. Survivors reported moderate levels of knowledge about obtaining resources such as public assistance benefits or getting financial and legal assistance as well as moderate levels of knowing how to review a credit history or other credit related items (e.g., credit rating, obtaining a loan). However, survivors in this study reported limited knowledge about investing, long-term planning, and managing joint assets with their partner. By instituting educational programs that help survivors of IPV understand financial instruments and financial terms, such as saving account, mortgages, credit and debt, compound interest, saving bonds, stocks, mutual funds, and retirement planning, these individuals will gain significant knowledge related to personal finance, an important aspect for achieving economic self-sufficiency. Through increased levels of financial literacy, IPV survivors will be capable of gaining financial independence and realizing a greater sense of financial well-being. Our findings support the development of financial literacy programs for IPV survivors by giving further attention to these specific types of curriculum items. Additionally, the results of our exploratory study suggest no difference in financial literacy by demographic characteristics. Because this research with IPV survivors is innovative and the first of its kind, we recommend that this study be replicated. Other demographic characteristics that may be included in the future might include formal and informal sources of financial education that the participant may have received.

Less than high school diploma

0.12

0.17

0.08

Some college/college grad

0.19

0.13

0.15

$10,001–$15,000

-0.19

0.19

-0.09

$15,001–$25,000

-0.07

0.13

-0.05

$25,001 and higher

-0.18

0.18

-0.10

0.32

0.18

0.18

Income (ref. = \$10,000)

Race (ref. = white) African American Latina

0.31

0.15

0.19**

Other

0.62

0.21

0.26**

Economic self-sufficiency

0.14

0.07

0.21*

Economic self-efficacy

0.10

0.05

0.20

R2 = 0.6432, Adj-R2 = 0.544, * p B 0.05, ** p B 0.01

One of the more important findings of our study is that financial literacy is a significant predictor of economic empowerment for IPV survivors. This supports the potentially critical role of financial literacy education in assisting survivors to gain the knowledge, confidence, and skills over their own financial well-being. Kasturirangan (2008) explains that empowerment is not the outcome of services, but rather a process in which women engage. However, she emphasizes empowerment can be fostered by providing access to resources and that this should be a central role of domestic violence programs. This suggests that offering financial education to survivors may be an important aspect of supporting their empowerment process. Empowerment within the field of economics is especially important, as the research is replete with evidence that economic dependency on the abuser is a major barrier for women in abusive relationships, thereby suggesting that strategies to alter this situation are essential (Bornstein 2006). In addition to financial literacy, economic self sufficiency was a significant although less powerful predictor of economic empowerment. This suggests that a combination

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of these two determinants may play an important role in facilitating empowerment, and further research is needed to understand their independent and combined contributions. Interestingly, the strongest predictor of economic empowerment was identifying as ‘‘other’’ for race. This suggests that there may indeed be important cultural variations related to the various constructs related to economic empowerment. Further research is needed to unpack the meaning of this finding and future studies should address the role of racial and cultural differences among IPV survivors related to economic empowerment. The results of this study are exploratory and as a result the study has a few limitations. First, the sample size is small and homogenous. Additionally, self-selection bias may be operating, as the women in this sample chose to participate in the financial literacy program and accompanying research. There may be significant differences between IPV survivors who volunteer to participate in a financial literacy program and those who do not. For example, severity of abuse experienced, readiness for change, or levels of trauma may be different. These and other possible differences should be taken into account as possible mediators when further exploring key constructs related to financial literacy and economic empowerment. Hence, it will be beneficial to replicate this study on a larger study sample and determine what demographic characteristics surface that have an impact on financial literacy and the economic empowerment variables. Additionally, the measures used in this study were relatively new and untested with this population; more testing and validation is needed with larger, diverse samples of abused and non-abused women. Further, this study used a cross-sectional design to better understand key constructs related to financial literacy. An important next step will be evaluating financial literacy programs to determine whether they are effective in producing positive change in the lives of IPV survivors. We believe that the instruments we developed offer promise but they will need testing in evaluation studies to determine if they are able to effectively capture change. Despite these limitations, this study contributes to our understanding of the potentially important role of financial literacy as well as an introductory view of how financial literacy, economic self-efficacy, economic self-sufficiency, and economic empowerment are related to each other in this sample of IPV survivors. A research question that remains includes what are the most effective ways to educate survivors of IPV about issues related to financial literacy, economic empowerment, economic self-sufficiency and economic self-efficacy. Further work is needed to address these various constructs and their interrelationships. As the research with The Allstate Foundation ensues, data will be available to conduct longitudinal analyses as

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well as other cross-sectional research that considers factors related to financial abuse, trauma, emotional health, and socioeconomic status during childhood. As we continue to learn about how financial literacy impacts IPV survivors, we must develop more rigorous research designs that include random assignment to experimental and control groups. Such groups could compare IPV survivors receiving the curriculum compared to those not; further research should also compare IPV survivors with other women who have not experienced IPV. Regardless, the results from this study provide the necessary first step to understanding financial literacy, economic empowerment, economic selfefficacy, and economic self-sufficiency and the relationship between these constructs on IPV survivors. Financial literacy is a factor that affects an important aspect of one’s life and financial well-being. By focusing this research on IPV survivors, it is our intention to raise awareness about the importance of financial literacy curricula with advocates, policy-makers and researchers, so more focus can be given to economically empowering this population. Acknowledgments This project was supported by The Allstate Foundation, Economics Against Abuse Program. Points of view in this document are those of the authors and do not necessarily represent the official position or policies of The Allstate Foundation. The authors would also like to acknowledge our collaboration with Rene Renick and Kim Pentico from the National Network to End Domestic Violence and their partnership with The Allstate Foundation in creating and implementing this financial literacy curriculum.

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Author Biographies Judy L. Postmus is an Associate Professor at the School of Social Work, Rutgers University and Director of the Center on Violence Against Women & Children. Dr. Postmus is published widely and has presented her research at local, national, and international conferences on the impact of policies and interventions on survivors of violence. She earned her Ph.D. from SUNY-Albany and her MSW from Barry University.

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Sara-Beth Plummer is an Instructor and Project Coordinator at the Center on Violence against Women & Children (VAWC) at the School of Social Work, Rutgers University. She has published and has presented her research on financial literacy for survivors of abuse at national and international conferences. Dr. Plummer earned her Ph.D. from Virginia Commonwealth University, School of Social Work, and her MSW from Adelphi University. Sarah McMahon is an Assistant Professor at the Rutgers University School of Social Work, where she also serves as Associate Director of the Center on Violence Against Women and Children. She has published widely and provided numerous presentations locally and

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J Fam Econ Iss (2013) 34:275–284 nationally on sexual violence prevention. Dr. McMahon earned her Ph.D. and MSW degrees from Rutgers University School of Social Work. Karen A. Zurlo is an Assistant Professor at the Rutgers University School of Social Work. She has published widely and has presented her research at local, national, and international conferences. Her teaching and research focus on gerontology and economic security. Dr. Zurlo earned her Ph.D. and MSW degrees from the University of Pennsylvania, School of Social Work, and her MBA from the University of Florida.