The role of self-accounting and financial capability in consumer credit decisions

The role of financial capability in the consumers' financial behavior has been widely analyzed by the literature. The same happened for the relationship between debt and financial capability. The consensus about the benefits of an increase in the levels of financial literacy collides with a diversity of opinions on what the best solutions to increase financial capability. While methods based on traditional teaching may not be an effective solutions and they could not provide results in the short term, solutions oriented to support consumers in important financial decisions (requests for funding, choice of retirement solutions, etc..) may show greater effectiveness. Studies in literature have shown the tendency of subjects with high levels of financial capability to adopt a long term view and to upgrade their daily financial behavior with attitudes and practices related to self-finance (budget, financial check-up, saving for goals, etc.) The paper focuses on the relationship between financial capability and self-accounting practices, interpreting the latter as evidence of conduct financially aware. After a review of the literature designed to emphasize the role of self-accounting in the context of personal finance, a financial check-up based tool is proposed, pointing out how the financial accounts' schemes and logics (regular budget, estimates and forecasts checking targets) may find useful application in the context of personal finance.