Government Subsidies and Household Debt Burden After the Great Recession

During the recent Great Recession, US households, especially those with low incomes, faced severe financial distress. Households experiencing economic hardship may turn to receiving government assistance to alleviate the hardship or distress. Receiving government assistance may improve a household’s financial situation as it could be decreasing its reliance on debt or even improving a household’s ability to repay their current debt. We investigated how households’ financial debt obligations were affected by receiving government assistance, as has not been previously analyzed. Given the focus of this research, we included households under 185 % of poverty threshold released by the 2012 US Census Bureau. Results from the 2010 and 2013 Survey of Consumer Finances indicate that government assistance was positively related to the odds of meeting debt-to-income ratio guidelines, implying that government assistance plays an important role in financial security of low-income households. This study provides important insights for researchers and policymakers in the areas of poverty and household finance.     

Sirens’ Call: Understanding Poor Financial Decision Making and Credit Card Misuse

Poor financial decision-making paradigms such as misuse of credit cards exist as ruinous forms of personal debt. Psychiatric and physical health problems arise from financial distress. Significant challenges exist for consumers to become financially solvent. Obstacles that exist in overcoming financial stressors can be explained by behavioral economic theories. These theories explain why consumers make unwise financial decisions. Research, practice implications, and a financial therapy model for improving financial decision-making skills are presented. The need for social work to ally with family economic scholars and policymakers around financial literacy and the development of effective financial therapy interventions is discussed.     

The association between saving disposition and financial distress: A genetically informed approach

Saving disposition, the tendency to save rather than consume, has been found to be associated with economic outcomes. People lacking the disposition to save are more likely to experience financial distress. This association could be driven by other economic factors, behavioral traits, or even genetic effects. Using a sample of 3,920 American twins, we develop scales to measure saving disposition and financial distress. We find genetic influences on both traits, but also a large effect of the rearing family environment on saving disposition. We estimate that 44% of the covariance between the two traits is due to genetic effects. Saving disposition remains strongly associated with lower financial distress, even after controlling for family income, cognitive ability, and personality traits. The association persists within families and monozygotic twin pairs; the twin who saves more tends to be the twin who experiences less financial distress. This result suggest that there is a direct association between saving disposition and financial distress, although the direction of causation remains unclear.     

The United States Economic Crisis: Young Adults’ Reports of Economic Pressures, Financial and Religious Coping and Psychological Well-Being

Using a sample of 222 young adults attending college, the present study examined the relative contribution of young adults’ perceived economic pressures, financial coping and religious meaning-making coping strategies in accounting for variation in their reports of psychological well-being within the context of the United States economic crisis. Results suggest a direct relationship between perceived economic pressure and psychological well-being such that young adults who reported having to make more economic adjustments as a result of economic crisis also reported higher levels of depressed mood and anxiety. Young men and women who reported having to make fewer economic adjustments and being able to meet their material needs reported higher levels of life satisfaction. Regardless of young adults’ self-reported level of economic pressures, the use of education and communication financial coping strategies was related to lower levels of self-reported anxiety and depressed mood and greater life satisfaction. Viewing the financial crisis as a punishment from God was generally associated with young adults’ reports of greater depressed mood and less life satisfaction. Implication of findings for research and practice are discussed.     

Characteristics of Couples Who Attend Family Services Counselor Visits in Relationship Education

Case management services for low-income couples receiving relationship education have been required by federal funding agencies. Studies examining relationship education outcomes for low-income couples have yet to address participant characteristics of those who attend case management services (e.g., distressed vs. nondistressed). Thus, this study examined the influence of baseline relationship satisfaction and demographics on attendance at case management visits for 2,628 low-income, partnered participants who attended relationship education. Findings indicated that participants who reported higher baseline relationship distress attended more family services counselor (FSC) visits. However, when we added demographics to the model, relationship distress no longer predicted FSC visits, whereas income served as a predictor for men and women, with those reporting greater monthly income attending more FSC visits.     

Emergency Saving and Household Hardship

Households with limited income and wealth often struggle to access the financial liquidity needed to address unexpected expenses or income drops. Emergency savings can act as form of insurance against such economic shocks and reduce the risk of hardships that influence family wellbeing. Prior research has established that threshold amounts of liquid assets can reduce the risk of economic hardship. This study used a measure of self-reported emergency saving behavior to examine whether households who reported saving for emergencies were less likely to experience subsequent economic hardships in a longitudinal sample of households in disadvantaged neighborhoods from the Annie E. Casey Foundation’s Making Connections project. Results across a range of regression models suggest that households who saved for emergencies experienced slightly less overall hardship and were less likely to report several specific hardships, such as food insecurity and having a phone disconnected, three years later. This study supports the idea that small, unrestricted savings may play a protective role for low-income households.     

Child-Rearing Effectiveness of Divorced Mothers:

The association of coping strategies and social sup- port to maternal distress and parenting style was investigated. Inter- views were conducted with 58 divorced mothers of preschool chil- dren. Results indicated that use of active behavioral and cognitive coping strategies was associated with feelings of control in child- rearing situations and with authoritative parenting. Reliance on cop- ing strategies that involved distancing, escape/avoidance, and social support was associated with symptoms of distress. Availability of family members for social support was generally associated with less authoritative parenting behavior, but also with less distress. Availability of friends was related to more authoritative behavior, but more distress. Coping and social support by friends contributed significantly to authoritativeness and distress beyond the variance contributed by mothers' education, financial stability, time since separation, and geographical region.     

Financial Strain,Neighborhood Stress,Parenting Behaviors,and Adolescent Adjustment in Urban African American Families

Using latent variable structural equation modeling, we tested a theoretical model linking financial strain, neighborhood stress, parenting behavior, and adolescent adjustment. The sample consisted of 305 African American families living in inner city neighborhoods. Of the families, 40% were living at or below the U.S. poverty threshold. The primary caregiver and a focal adolescent (mean age 13.5 years) were interviewed separately in each family. The results indicated that the income‐to‐need ratio was significantly related to financial strain and neighborhood stress, both of which were positively associated with psychological distress in parents. Parent psychological distress was positively related to more negative and less positive parent–adolescent relations, which predicted a lower positive and higher negative adjustment in adolescents. The results extend previous findings by demonstrating that neighborhood characteristics are an important mediator between economic hardship and parent and adolescent behaviors.     

Developing Financial Management Training in Low-Income Communities

Abstract

As welfare policy contractions and declines in real wages have placed severe financial pressures on low-income families, programs to improve financial management practices and to help the poor accumulate assets have grown. This article examines the need for such programs and the implications associated with implementing two prominent training strategies-one that focuses solely on financial management training and another that combines such training with savings incentives.

Based on data from a large financial management training program, we find that knowledge deficits about basic financial issues are substantial, and that the type of financial training program offered has important implications with respect to the subgroups of low-income people likely to be served within a community. We discuss program issues critical to the implementation of such programs in low-income communities, with a focus upon more carefully attending to their participant empowerment and community development potential.     

Promoting Bank Accounts to Low-Income Households: Implications for Social Work Practice

In the wake of the recent economic challenges, it is clear that social workers must be educated about the financial opportunities for low-income households. Encouraging low-income households to have a bank account at an insured depository institution, or become banked, is increasingly emphasized in policy and practice. Becoming banked offers the opportunity to avoid high-cost alternative financial services. Social workers can facilitate relationships between low-income households and the mainstream financial services industry to help families advance their long-term financial interest. Understanding the structure of all types of banks and credit unions is imperative. Implications for social work practice are explored.     

A community initiative to support family financial well-being

Many community initiatives focus on workforce participation. Research indicates that affordable childcare is key to maintaining employment for low-income parents in the USA. These parents may also benefit from instruction to build financial literacy skills. The United Way of Tampa Bay, Florida, USA implemented a program to support family economic status that linked summer childcare for school-age children with financial literacy classes. Results from the evaluation of the initiative indicate that it enabled parents to participate more fully in work or school than would have been possible otherwise. Parents welcomed choices of free, innovative childcare programs that promoted social, academic, and cultural skills and provided safe care for their children. Parents reported that their money management knowledge and skills improved due to the course they took to qualify for childcare. Initiatives such as this show promise for promoting family financial well-being and an engaged workforce.     

Sexual abuse: a comparison between resilient victims and drug-addicted victims

The goal of this study was to determine which variables distinguish resilient victims from drug-addicted victims, who were sexually abused during their childhood--in addition, to measure the contribution of these variables to the level of distress experienced by the victims. There were two groups of 20 women interviewed. The resilient group showed no clinically significant symptoms of mental distress, and the addicted group were undergoing treatment for drug dependency. They all completed a semi-structured interview and a questionnaire regarding the type and severity of their sexual abuse, mental health status, self-esteem, locus of control, support and cognitive factors from Finkelhor's model. Both of these groups were equally and severely abused. Resilient and addicted women both received a moderate level of support. These women also reported the same sense of betrayal and powerlessness. Furthermore, both groups believe, to a large degree, that they now control what happens to them (internal locus of control). There were three distinguishing variables among the two groups, they were stigmatization, self-blame, and hazard for the locus of control. In comparison, resilient women had less self-blame for having been abused and they also felt less stigmatized than addicted women. In fact, stigmatization and self-blame account for 65% of the TSC-40 variance. These results suggest that cognitive strategies, particularly those that are linked to the interpretation of the event, may have some importance in the recovery.     

The Financial Behavior of Emerging Adults: A Family Financial Socialization Approach

The current study examined the role of attachment insecurity, locus of control, and parental financial communication on the financial behavior of emerging adults from a family financial socialization theory perspective. Data were used from the Emerging Adult Financial Capability Study, the sample consisted of emerging adult college students (N = 321) from a large southeastern university in the United States. Structural equation modeling was used to examine the direct and indirect effects as well as the overall fit of the model that was constructed according to family financial socialization theory. Results suggested that increased attachment insecurity predicted decreased financial communication from parents and a decreased perception of an internal locus of control. Emerging adults who received greater financial instruction (both direct and indirect) and who felt they had a greater ability to influence outcomes in their life engaged in more sound financial behavior. Results also suggested that financial communication and locus of control mediated the relationship between attachment insecurity and financial behavior. The findings supported the inclusion of attachment as an important family relationship variable in the financial socialization process, as well as the structure of a conceptual model of family financial socialization theory.     

Problematic Domains of Romantic Relationships as a Function of Attachment Insecurity and Gender

Theoretically, securely attached adults view the world as safe and see their romantic partners as emotionally available, supportive, and non-threatening. Little is known, however, about which relationship domains are most problematic for securely (versus insecurely) attached adults. To fill this gap, we asked 62 adults in committed relationships to complete the Marital Satisfaction Inventory-Revised (MSI-R; Snyder, 1997), a measure of the frequency and severity of 10 kinds of couple problems, and the Experiences in Close Relationships-Revised (ECR-R; Fraley, Waller, & Brennan, 2000), a measure of attachment insecurity. High Avoidance and Anxiety were associated with numerous relationship problems being rated as frequent and severe. A canonical correlation showed that 26.5% of the variance in the set of relational problem areas was accounted for by attachment insecurity and gender. While greater attachment security was associated with fewer perceived difficulties in affective communication, irrespective of gender, greater Avoidance and Anxiety were associated with more difficulties in this area. Female participants with high Anxiety (and low Avoidance) reported more global relationship and family-of-origin distress, but fewer financial disagreements and less difficult problem-solving communication; conversely, male participants with high Avoidance (and low Anxiety) reported more financial disagreements and difficult problem-solving communication, but less global relationship and family-of-origin distress. These results have implications for practice by suggesting ways in which couples’ attachment dynamics can become manifested in specific kinds of relational difficulties.     

The Impact of Financial Hardship on Single Parents: An Exploration of the Journey From Social Distress to Seeking Help

Single parent families are at high risk of financial hardship which may impact on psychological wellbeing. This study explored the impact of financial hardship on wellbeing on 15 single parents. Semi-structured interviews were conducted and analysed using constructivist thematic analysis. Participants described food and fuel poverty, and the need to make sacrifices to ensure that children’s basic needs were met. In some cases, participants went without food and struggled to pay bills. Isolation, anxiety, depression, paranoia, and suicidal thoughts were described. However, participants reported that psychological services not able to take the needs of single parents in to account. Support for single parents must acknowledge the impact of social circumstances and give more consideration economic drivers of distress.     

The role of perception in the intention to change the family financial situation

The study investigates factors associated with the individual intentions to change the family financial situation of 337 farm respondents. The hypotheses are that intentions to change are influenced by (a) resource flexibility or constraints existing at the time of the decision situation, including off-farm employment, education, age, and household size, and (b) perceptual factors of perceived income adequacy, locus of control, degree of discrepancy between standard and level of the family financial situation, and dissatisfaction or satisfaction with the discrepancy. Older respondents and those experiencing more external control are less likely to intend to change. Younger respondents and those who perceive their incomes as more adequate are more likely to perceive that they have control over their situation. The lower the perceived income adequacy, the greater the discrepancy between standard and level of the family financial situation and the lower the satisfaction with the discrepancy. Significant indirect effects were consistent with theoretical expectations.Research was supported by the Minnesota Agricultural Experiment Station Projects 52-055, 52-054, and 52-058 and the Minnesota Extension Service. The authors wish to thank Jean W. Bauer, Ph.D., for research collaboration and Susan Keskinen and Cathy Schultz for research assistance.Her research interests include social, economic, and technical decision processes, discrepancies between standards and levels, and the interrelationship of work and family roles, particularly for farm women. Her Ph.D. is from Iowa State University.Her research interests in family resource management theory include social decision making processes and social decision rules, family life quality, and the economic consequences of divorce. Her Ph.D. is from Michigan State University.     

The Socio-Economic Empowerment Assessment: Addressing Poverty and Economic Distress in Clients

In this paper, we introduce the Socio-Economic Empowerment Assessment (SEEA), a qualitative assessment that uses an ecological framework to better understand the psychological impact of poverty and financial insecurity. The assessment is designed as a practice tool and can be administered in a number of clinical settings, including agencies most likely to serve low-income populations. It can also be included as part of financial literacy or management sessions that social work agencies may offer. This paper explores how SEEA can be used to help develop specific and appropriate interventions that move low-income people and others toward economic empowerment. We examine the literature on financial literacy programs and theories on behavior regulation and social relationships related to consumption. A case study using an integrative assessment approach is included as an example of SEEA implementation.     

Perceived Impact of Economic Downturn on Worry Experienced by Elderly Chinese Immigrants in Canada

The economic downturn impacts older immigrants, who may not have the financial security or resources to mitigate the effects. This project examines the effects of the economic downturn on elderly Chinese immigrants using a survey gauging the effects of the recession on their life and their worry about the economy. The participants were aware of the recession and they spent less and halted investments. Their economic situation seemed to have worsened or remained unchanged. Gender, education level, self-rated financial adequacy, and worry about family’s quality of life were significant correlates of worry. Those with a higher level of worry were female, had higher education, and were less financially adequate. Worry about family’s quality of life is the most important correlate.     

Educational Status and Savings Performance in Individual Development Accounts

Abstract

This study examines the relationship between education and savings performance in Individual Development Accounts (IDAs), a matched savings program for the poor. Based on economic and institutional theories of savings, we further investigate whether the relationship between education and savings is mediated by income, intended uses of IDAs, or program factors. The data of this study are from the American Dream Demonstration (N = 2,150), the first national demonstration of IDAs. The results indicate that education was positively related to savings after controlling for program factors and other individual characteristics. Household income and two program factors, monthly savings target and financial education, partially mediated the relationship between education and savings outcomes. These results provide some support for both economic and institutional theories of savings among low-income people. The findings also may help design and implement more effective savings programs for the low-income population and its varying segments.     

Commitment and Relationship Maintenance Behaviors as Marital Protective Factors during Economic Pressure

Using a contemporary national sample of married couples (N?=?1368 couples) and a dyadic path analysis, the authors examined whether commitment and relationship maintenance behaviors facilitate marital quality resilience for wives and husbands reporting recession-related financial stressors and economic pressure. Relationship maintenance behaviors moderated the association between economic pressure and marital quality for wives. Wives reported higher levels of marital satisfaction and lower levels of divorce proneness during economic pressure when husbands reported higher levels of relationship maintenance behaviors. Unexpectedly, wives reported higher levels of divorce proneness during economic pressure when husbands reported higher levels of marital commitment.