Frijns, BPMGilbert, ATourani-Rad, A2013-10-252013-10-252013-03-312013-03-31Applied Finance Letters, vol.2(1), pp.18 - 21 (4)https://hdl.handle.net/10292/5776Numerous studies have found a positive relationship between financial literacy and financial experience. Typically, this relationship is interpreted as being a causal relationship, i.e. an increase in financial literacy leads to better financial decision making. However, a simple relationship cannot be interpreted in a causal way. In this paper, we show evidence for a causal relationship running the opposite way, i.e. people with more financial experience seem to acquire more financial knowledge and become more financially literate. This finding has important implications as it suggests that programmes targeted at improving financial literacy could be more effective if they incorporate experiential components.By publishing in Applied Finance Letters, the author(s) agree to the dissemination of their work through Applied Finance Letters. However, authors are free to use their published work in any way or form in future publications.Financial literacyFinancial experience, CausalityJournal ArticleOpenAccess