Changes in financial status influencing level of satisfaction in households

This study explores the impact of changes in family financial status over a four year period on level of satisfaction with various aspects of household finances. Data were collected through personal interviews with 123 families in 1982 and 1986. Information was obtained on household income, assets, liabilities, and on the satisfaction of the money managers with seven aspects of household finances. Two-tail pairedt-tests were used to compare differences in financial and satisfaction variables between the two time periods. Regression analyses were applied to ascertain factors affecting the satisfaction of the money managers. The financial status of households improved during the 4 year period as reflected by net worth. The mean net worth, with and without real estate, increased significantly during this time period. In spite of this improvement, money managers are less satisfied with various aspects of their household finances.This research was supported by the Iowa Agriculture and Home Economics Experiment Station Project No. 2773 (Journal Paper No. J-13098).Tahira K. Hira is a Professor and Alyce M. Fanslow is a Distinguished Professor in the College of Family and Consumer Sciences; Patricia Titus is an Instructor in the College of Education; all are at Iowa State University, Ames, IA 50011-1120. Dr. Hira's research interests include consumer bankruptcies and various aspects of household economic well-being Dr. Fanslow's and Dr. Titus' research interests include competencies of household money managers.     

Assessing the causal relationship among communication,money management practices,satisfaction with financial status,and satisfaction with quality of life

The purpose of the study reported here is to assess the causal relationship among communication, money management practices, satisfaction with financial status, and quality of life. The data used were collected in 1986 through personal interviews. The sample size is 123 interviewees, and the unit of analysis is the household's money manager. Results show that the money managers who are more knowledgeable about financial matters, and those who are highly indebted, communicate more about money matters and report more money management activities. Satisfaction with financial status is caused mainly by economic factors (net worth and savings). The demographic factors that influence satisfaction with quality of life are marital status and household size. Satisfaction with quality of life is also predicted by income and satisfaction with financial status.This research was supported by the Iowa Agriculture and Home Economics Experiment Station Project No. 2773 (Journal paper No. 13123).Dr. Olive Mugenda is a senior lecturer Lecturer at Kenyatta University, P. O. Box 62337, Nairobi, Kenya, East Africa. Dr. Tahira K. Hira is a Professor, Department of Family Environment, Iowa State University. Dr. Alyce M. Fanslow is a Distinguished Professor, Department of Family and Consumer Sciences Education, Iowa State University, Ames, IA 50011.Drs. Mugenda and Fanslow received their Ph.D. degrees from Iowa State University, Dr. Hira received her Ph.D. degree from the University of Missouri, Columbia.Dr. Mugenda's research is in family financial management areas. Dr. Hira's research focuses on factors influencing satisfaction with households' financial status and consumer bankruptcy. Dr. Fanslow's research interest includes financial management education.     

Subjective measures of household preferences and financial decisions

In intertemporal models of household consumption or portfolio choice, household behaviour depends on, for example, the household's rate of time preference, the rate of risk aversion, and the household's information set. In this paper we use a survey of Dutch households which contains direct subjective information on risk aversion and time preference and on interest in financial matters. We first describe these data and analyze how they relate to household characteristics and household income. We then investigate whether these variables are related to households' financial decisions on home ownership, mortgages and ownership of risky assets. Our results are broadly in accordance with economic theory.     

The benefits of joint and separate financial management of couples

Financial management differs across households with consequences for financial outcomes and well-being of partners in households. A large-sample study has been performed, investigating the relationship between financial management of households and the occurrence of financial problems. To our knowledge, this is the first study on this relationship. Data from both partners was collected on having joint and separate bank accounts, on financial decision making, on drivers of financial management, and on financial outcomes. Based on the data, four financial management styles were derived: syncratic/joint, male-dominant, female-dominant, and autonomous financial management. In the syncratic style, partners have a joint bank account and take most financial decisions together. In the male/female-dominant styles, one partner (husband or wife) takes the main financial decisions. In the autonomous style, both partners have their own bank accounts and make their own decisions. As a conclusion, we find that syncratic financial management and having a joint instead of a separate bank account correlates with fewer financial problems, as compared with male-dominant money management and having separate bank accounts. Deciding together as partners is beneficial for the quality of financial management and for avoiding financial problems.     

Managing money, managing coupledom: a critical examination of cohabitants' money management practices

This article focuses on the use of independent money management by a small number of cohabitants living in New Zealand. This style of money management seems to be popular with cohabitants and is likely to become increasingly significant as the number of couples who cohabit continues to grow in Western countries such as New Zealand. Yet it has received sparse attention within the literature on domestic monies. This literature has noted that money management practices operate either to diminish or to exacerbate inequalities between women and men, most noticeably in the realm of decision‐making and personal spending money. Independent money management is pursued in order to achieve equality and autonomy, thereby overcoming some of the difficulties identified in other forms of money management. However, it is argued that equality and autonomy exist in tension with each other. In certain relational settings, adherence to the goal of autonomy leads to the emergence of inequalities and the continued exercise of power within heterosexual relationships.     

The relationship between objective and subjective wealth is moderated by financial control and mediated by money anxiety

Prior research has showed that the subjective perception of objective wealth might be affected by various individual difference variables, such as one’s love of money, level of aspirations, and materialistic inclinations. This paper examines a model of subjective wealth that controls attitudes toward money and objective wealth. Subjective wealth has been operationalized as a combination of the assessment of financial situation, the ability to make ends meet and perceived adequacy of income to fulfill needs and wants. Objective wealth has been captured by personal net income as well as household income. Results show that two dimensions of money attitudes affect the subjective perception of objective wealth. Individuals’ perceived financial control (the ability to budget, monitor, and control their money) serves as a moderator for the relationship between objective and subjective wealth: The relationship between the two is stronger for individuals high in financial control and planning than for those low. Furthermore, money anxiety (worry and indecisiveness regarding moneyrelated issues) is negatively related to objective measures of wealth and its subjective evaluation, and partially mediates the objective–subjective wealth relationship.     

Cohabiting couples: rethinking money in the household at the beginning of the twenty first century

This paper assesses the implications of existing research on the intra‐household economy for current debates about the emergence of new forms of radically democratic intimate relationships in ‘late modern’ or ‘world risk’ society. The different ways in which couples organise money are particularly important in evaluating these debates because as Pahl (1989 , 1997 , 1999 ) argues, money can be seen as a tracer for other aspects of a couples’ lives together, especially the power relationship between them. One of the groups currently thought to be in the vanguard of shifts to new forms of egalitarian and radically democratic intimate relationships are heterosexual cohabiting couples. So far however, there has been little, if any, research on the ways in which cohabiting couples organise money, particularly in Britain. This paper therefore assesses the possible implications of existing research on the intra‐household economy amongst heterosexual couples in the UK and elsewhere, for the ways in which cohabiting couples may possibly be organising household money in Britain today, and what light this sheds on current debates about shifts towards greater equality in new forms of intimate relationships. One of the main questions underlying the discussion concerns the extent to which trends towards individualisation in intimate relationships are coming to be associated with greater sharing and equality in the distribution of financial resources, as Giddens’ (1992 ) thesis would lead us to expect, or whether as Pahl (1999 ) and others ( Jamieson, 1999 ) have suggested, an increasing proportion of couples may now be coming to use individualised or privatised systems of money management which while enhancing individual control over finances, may nevertheless still be associated with the maintenance and reproduction of some very traditional gender inequalities between male and female partners, albeit in a new and apparently impersonal, ‘marketised’ form.     

Consumer fraud victimization and financial well-being

Using US household panel data, we provide evidence of a strong negative association between consumer fraud victimization and individuals’ perception of their financial well-being. We show that this effect is homogenous among the population and mainly stems from victimization through misrepresentation of information as well as misusage of money by third parties. We disentangle two potential channels through which victimization might reduce perceived financial well-being: psychological consequences (loss of confidence in financial matters) and economic consequences (decrease in net wealth). Our results show that fraud is more negatively associated with a loss in individuals’ confidence in financial matters than with declines in their net worth. Our findings suggest that people tend to doubt their abilities to handle financial matters after having fallen prey to fraud, which in turn carries major implications for subsequent financial decision making.     

Shared or separate? Money management and changing norms of gender equality among Norwegian couples

Over the last generation the male breadwinner/housewife family has gradually become outdated as the dominant normative model for family households. The new ideal has become the adult worker family model, where gender equality defined as economic independence and sharing of household work and childcare between spouses/partners is the norm. The Nordic countries are the frontrunners of this development, and the Nordic welfare model is assumed to be well adapted to this new ideal. However, this ideal does not hold clear norms of how money should be managed and shared in family households, and Nordic families have to establish their own systems. Norwegian survey data from the International Social Survey Programme (ISSP) in 1994 and 2002 are used to analyse patterns of money management in family households. Our study indicates that, even if sharing of economic resources and responsibility remains the most common pattern, a greater number of families are choosing separate and independent systems of financial allocation. This increase in divided systems of money management may lead to new gender inequalities because of the lack of recognition of the value of domestic labour and family care as part of the common provision.     

‘All my worldly goods I share with you’? Managing money at the transition to heterosexual marriage

Studies in the 1980s and 1990s revealed that financial arrangements in marriage tended to disadvantage women, especially those with young children. However, much of that research focused upon relatively well‐established married (or remarried) couples, and we have little insight into the choices that today's newly‐weds are making, or what influences their choices. To address this gap in our understanding, in‐depth, semi‐structured interviews were conducted with forty‐two heterosexual couples on the brink of their first marriage. We explored their monetary practices and the way that they thought about money in the relationship. The results of a grounded theory analysis showed that six couples were pooling all or most of their money, fifteen were using a partial‐pooling system, twenty were using an independent management system (with separate accounts), and one couple had an arrangement where all the money was controlled and managed by one partner. A key factor was perceived ownership of money, and this influenced the extent to which finances were being merged and treated as a collective resource. Other factors included the couple's current living arrangements and beliefs about the importance of sharing and independence within the relationship.     

Lifecycle effects on consumer financial product portfolios in South Africa: An exploratory analysis of four ethnic groups

This paper assesses ownership of 16 financial products by households in different lifecycle stages amongst four ethnic groups (Africans, Coloureds, Asians, and Whites) in South Africa. The lifecycle hypothesis indicates younger households should own more debt-related financial products, whereas households in intermediate lifecycle stages should own more financial products to accumulate assets; both these claims are disconfirmed for all groups. However, White households in intermediate household stages own more financial products than younger and older households, consistent with previously reported lifecycle findings in Western countries. Consistent with the literature on innovation adoption we find that younger, affluent and highly educated households amongst the other three ethnic groups tend to own more financial products than older Africans, Coloureds and Asians. These results indicate that innovation adoption literature may better describe financial product ownership in developing countries than the lifecycle hypothesis.     

Money, power and inequality within marriage

The growing body of research on the intra-household economy suggests that in couple households there are significant associations between control over household finances and more general power within the household. However, most earlier research has been based on relatively small samples. Here a major new British data set, produced by the Social Change and Economic Life Initiative, is used to examine the relations between money, power and inequality within marriage. Six different systems of financial allocation are identified. The results suggest that even when couples nominally pool their money, in practice either husband or wife is likely to control the pool. In only one fifth of couples was the pool jointly controlled, but these households were characterised by the highest levels of equality between husband and wife in terms of decision making, experience of deprivation and access to personal spending money. Findings from the study indicate a complex pattern of relationships between household income level, household allocative system and gender. Female control of finances, though it was associated with greater decision-making power for women, did not protect them against financial deprivation; however, male control of finances, especially when it took the form of the housekeeping allowance, did serve to protect the financial interests of men in comparison with women. Gender inequality was least in households with joint control of pooled money and greatest either in low income households or in higher income households with male control of finances.     

The effects of perceived locus of control and perceived income adequacy on satisfaction with financial status of rural households

The purpose of this study is to examine the relationships among selected socioeconomic variables — perceived locus of control, perceived income adequacy, and satisfaction with financial status. Results of the study indicate that age, household income, household net worth, perceived locus of control, and perceived income adequacy are significantly related to satisfaction with financial status. Household income and household net worth have indirect effects on satisfaction through perceived locus of control and perceived income adequacy. Perceived locus of control also has an indirect effect on satisfaction through perceived income adequacy. These findings suggest that counselors and educators should emphasize the importance of perceptions of income adequacy and control over financial aspect in their courses and programs.Journal Paper No. J-14499 of the Iowa Agriculture and Home Economics Experiment Station, Ames, Iowa. Project No. 2809.His research interests include consumer credit and family resource management. He received his Ph.D. from Iowa State University in 1993.Her research interests include family financial management and consumer bankruptcy. She received her Ph.D. from the University of Missouri.     

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.     

The role of identity-based motivation and solution-focus brief therapy in unifying accounts and financial education in school-related CDA programs

This article focuses on unifying, seemingly at times, disparate aspects of school-related Child Development Account (CDA) programs in order to maximize their effects. Account ownership and financial education are the two key components of school-related CDA programs. Despite this most of the focus by asset theorists and researchers has been on the account ownership side of CDAs. To unify these two components we use identity-based motivation (IBM) theory. Further, we suggest that early experience with money failures and lack of positive role models results in many lower income and minority children entering CDA programs with low financial efficacy. Because of low financial efficacy, we suggest that in order for financial education programs to be successful among lower income and minority children they need to be designed to address this reality. We posit that a way to address the reality of lower income and minority students is to adopt solution-focus brief therapy (SFBT) techniques. These techniques can be used to teach financial education instructors how to build positive financial efficacy beliefs among lower income and minority children.     

Having the wrong kind of money. A qualitative analysis of new forms of financial, social and moral exclusion in consumerist Scandinavia

Consumerism not only promotes discourses emphasizing individualized consumer choices, but it also introduces new electronic, invisible and symbolic forms of money. The present article analyses social exclusion in contemporary Scandinavian society by focusing on patterns of consumption and the social meaning of money in low‐income households in Denmark and Sweden. Drawing on recent sociological theory on money and budgeting ( Pahl, 1999, 2002 ; Singh, 1997, 1999 ; Zelizer, 1997, 2005 ) and recent critiques of consumption studies ( Edgell, Hetherington and Warde 1996 ; Gronow and Warde, 2001 ; Lodziak, 2002 ), it argues that experiences of social and financial exclusion in consumerist society must be related to the amount of money available within the household, the social position that the household occupies, and the social form that this money takes. Pahl (1999 ) shows that the development of electronic money seems to alter and further constrain access to consumption for the ‘credit poor’ and ‘information poor’. To this ‘technological filter’, a ‘social filter’ may be added, as the results suggest that consumption patterns and the social meaning of money in low‐income families are largely incompatible with prevailing neo‐liberalist ideas of money and consumption in contemporary society.     

The effects of financial management strategies on quality of family life in remarriage

A conceptualization of financial management behavior in remarriage forwarded by Fishman (1983) is refined and used to study 91 remarried couples. Couples are categorized into three financial management strategy groups: those having only joint accounts, only separate accounts, and a combination of joint and separate accounts. The different groups' demographic characteristics and satisfaction and happiness regarding family life are compared. Overall few differences between groups are found on the demographic characteristics, and no differences are found on satisfaction or happiness. Her research interests are in remarriage and stepfamily relationships, fathering postdivorce, and stress and coping in adolescents. She received her Ed.D. from Indiana University. He received his M.S. degree in Human Development and Family Studies at Colorado State University, Ft. Collins, CO 80523. His research interests include factors affecting adjustment in remarriage and multiple remarriages and problem solving and creativity in families. before her death in December 1993. Her research interests were financial management and families in transition. She received her Ph.D. from the University of Tennessee at Knoxville.     

Predicting children's savings: The role of parents' savings for transferring financial advantage and opportunities for financial inclusion

Parents transfer many forms of advantage to children based on their financial resources. Of interest is whether parents transfer educational and financial advantages and whether this occurs early in life. This paper examines financial advantage by asking whether children's own savings—apart from that of their parents—can be predicted by a separate measure of parents' savings for their child. This study predicts children's basic and college savings at ages 12 to 15 with separate samples from low-to-moderate- (LMI; N = 333) and high-income (HI; N = 411) households using Panel Study of Income Dynamics and Child Development Supplement data. Propensity score weighting and logistic regression results find that parents' savings for their child is significant in both household types. Given this, policies that aim to include children in savings may help reduce transfers of financial advantage and, ultimately, educational advantage.     

Money illusion,financial literacy and numeracy: Experimental evidence

Money illusion is usually defined as the inability of individuals to correctly account for inflation or deflation when making decisions. Empirical evidence shows that money illusion matters in financial decisions, particularly those made by households. In this article, we analyze money illusion at the individual level within the context of financial choices and study its relationship with numeracy and financial literacy. To do so, we propose an original measure of money illusion via an experimental task. This task consists of a series of choices between a pair of simple bonds whose returns are affected only by inflation (or deflation). We provide a fine-grained measure of money illusion that is correlated with typical measures (questionnaires) of it. Moreover, we show that money illusion depends on the choice context (e.g., inflation or deflation) and participants’ abilities. Individuals with financial knowledge are less sensitive to money illusion than others, while there is no evidence of an impact of numeracy.     

Family financial roles assumed by sex trafficking survivors upon community re-entry: Findings from a financial diaries study in the Philippines

People who have been trafficked often face substantial financial challenges upon exiting human trafficking and re-entering the community. This article presents findings from a 6-month financial diaries study with the households of 30 women in Cebu City, Philippines, who were trafficked into sex work. Data from 352 interviews with sex trafficking survivors and their family members were utilized to explore the roles that trafficking survivors played in promoting the economic well-being of their families upon community re-entry, as well as the challenges they faced in fulfilling these roles. Findings revealed that women who were trafficked balanced multiple roles in their families—including that of income earner, household financial manager, and financial providers for the extended family. Survivors’ limited access to employment was a key barrier that impeded their ability to achieve financial stability for themselves, their children, parents, and other family members. The employment status of trafficking survivors affected numerous crosscutting factors—including the extent to which they were able to control household finances, redistribute income to their parents, and leave violent relationships. Findings reinforce the importance of safe, sustainable employment opportunities for the security and well-being of trafficking survivors and their families.