Greed and adolescent financial behavior

Financial problems in adolescents have increased over the last decades. We investigated if individual differences in greed relate to financial behavior. Greed is an important motive for economic behavior and refers to the tendency to never be satisfied and to always want more. We developed a short version of the Dispositional Greed Scale (Seuntjens, Zeelenberg, Van de Ven, & Breugelmans, 2015), which we then used in a large survey with adolescents (N = 3899). Dispositional greed is associated with them having more income, spending more, saving less often, and having debt more often. Identifying what personality characteristics influence financial behavior at a young age is important, as the financial habits that people learn during adolescence persist in adulthood. We find that greed has both positive effects (having a higher income), but also negative effects with the greedy being less likely to save and being more likely to have a debt.     

Financial capability and psychological health

Financial capability is receiving increasing interest among policy makers, who wish to reduce problem debt and welfare dependency and increase savings and general skills. We examine whether financial capability has impacts on psychological health independent of income and financial resources more generally using a nationally representative survey. Data from the British Household Panel Survey 1991-2006 are used to construct a measure of financial capability, which we relate to respondents’ psychological health using the 12-item General Health Questionnaire. Estimates from within-group panel data models indicate that financial capability has significant and substantial effects on psychological health over and above those associated with income and material wellbeing more generally. For men, having low financial capability has an effect larger than that associated with being unemployed, while for women it is similar to that of being divorced. Furthermore having low financial capability exacerbates the psychological costs associated with unemployment and divorce, while high financial capability reduces these costs.     

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.     

Urban Aboriginal use of fringe financial institutions: Survey evidence from Prince George, British Columbia

This paper analyses the use of fringe financial institutions (FFIs), such as payday loan and check cashing providers, by urban Aboriginal people based on a survey undertaken in Prince George, British Columbia. We found that 60% of FFIs’ clients surveyed self-identified as Aboriginal. Their characteristics, compared to the non-Aboriginal FFI clients, included having lower average incomes, lower levels of education, more likely to be female, a higher incidence of being unemployed, higher levels of financial exclusion, and less satisfaction with the service provided by FFIs. We find that government policy towards regulating the FFI industry is inadequate for meeting the basic financial needs of urban Aboriginal people.     

Intergenerational Conflict in Korean Immigrant Homes and Its Effects on Children's Psychological Well-Being

Abstract

This study is concerned with the nature of parent-child conflict in the Korean immigrant home and how such conflict impacts on children's self-esteem, depressive symptoms, sense of marginality and subsequently their coping behavior. Acculturative stresses of immigrant families and potential cultural sources for intergenerational conflict are explored. To test the relationship between intergenerational conflict and its impact on children's psychological well-being, the study relies upon 312 cases of survey data that were collected by Shalom Christian Counseling Center in Los Angeles in 1999-2001. Using a series of bivariate relationships and multiple regression analyses, we evaluate the relative effects of intergenerational relations and perceived marginality along with several demographic factors on dependent variables: self-esteem, depressive symptoms, and coping behavior. Our findings clearly demonstrate that conflictual intergenerational relations impact negatively on the psychological adaptation process of Korean immigrant children. Korean immigrant children whose conflict is not dealt with or resolved well tend to exhibit high depressive symptoms and low self-esteem, which also are associated with their perception of marginality in larger society. Females are more associated with depressive symptoms, but less on unhealthy coping behavior. Children whose residency is relatively shorter are less likely to show depressive symptoms and subsequently to engage less in negative coping behavior than are those who have resided longer in the U.S. These children tend to experience more unhealthy coping behavior than do children having stable relations with their parents at home. The implication of this study is discussed, and possible intervention methods are suggested.     

Is Bigger Really Better?

This study investigates the effect of a capital facilities project on nonprofit financial vulnerability metrics. The author employs a difference‐in‐differences technique to model the relationship between facilities investments and financial vulnerability indicators using data for a matched‐pair sample of nonprofit organizations that invested and did not invest in a facilities project. Overall the findings suggest that investments in facilities are associated with temporary increases in an organization's net assets ratio and decreases in its surplus ratio after a project is completed, and that the costs associated with facilities projects (for example, debt) place strain on nonprofit finances. The study's findings have implications for the financial management of nonprofit organizations, particularly in regard to the associated costs of capital expansion.     

TOGETHER – A Couples’ Program to Improve Communication,Coping, and Financial Management Skills: Development and Initial Pilot‐Testing

The accumulated knowledge about the negative impact of financial strain on couple's relationship functioning and the magnitude of the latest economic downturn have brought together the fields of financial counseling and couples’ therapy. This article describes the development of a new interdisciplinary program that aims at helping couples under financial strain improve their financial management, communication, and dyadic coping skills. The article also reports the results from its initial pilot‐testing with data collected from 18 financially distressed couples before and after participation in the program and 3 months later. Results from repeated measures ANOVAs suggest that the program may help reduce both partners’ financial strain and the male negative communication and improve both partners’ financial management skills and strategies to cope together with financial strain, and the male relationship satisfaction. These findings together with the high satisfaction reported by participants regarding the structure and content of the sessions and homework suggest that this program may be a promising approach to help couples experiencing financial strain. Gender differences, clinical implications, and possibilities for further research are also discussed.     

Psychological factors in consumer debt: Money management, economic socialization, and credit use

A postal survey study of factors correlated with consumer debt investigated several psychological variables which have been suggested as causes or effects of debt. The survey was conducted with the help of a public utility company, and questionnaires were sent to three groups with different debt histories over the preceding two years: Non-Debtors (no debt to the company), Mild Debtors (late payment to the company), and Serious Debtors (sued for debt recovery by the company). Economic and demographic factors predicted debt category well, supporting previous results. Further variance between groups was accounted for by people's money management skills and facilities, by measures of their time horizons, and by aspects of their consumer behaviour. Non-debtors had more money management facilities (e.g. bank accounts) than debtors, and rated their abilities at money management more highly. Debtors had shorter time horizons than non-debtors. Debtors were more likely to buy cigarettes and Christmas presents for children than non-debtors. No group differences were found for attitudes to debt or locus of control. There were significant group differences for measures of economic socialization, social comparisons, use of credit, and other aspects of consumer behaviour, but these differences were not independently significant on multivariate analysis. Conclusions must be qualified because of low return rates, but the results suggest that a complex of psychological and behavioural variables affect debt and are affected by it. It is argued that these variables are linked to the psychology of poverty.     

Risk Indicators of Elder Mistreatment in the Community

ABSTRACT

This study examined risk indicators of chronic verbal aggression, physical aggression, and financial mistreatment in a population-based sample of 1,797 independently living elderly in Amsterdam, The Netherlands. Included were socio-demographic characteristics, physical and psychological health, and functional capacity. The data were collected using standardized interviews that took place in the homes of the respondents. The results showed that chronic verbal aggression was associated with an elder living with a partner or other(s) and in poor or bad health. Physical aggression was associated with an elder living with a partner or other(s) and having depressive symptoms. Finally, financial mistreatment was associated with being male, living alone, being partially dependent in instrumental activities of daily living and having depressive symptoms. The results indicate that the risk indicators of victims of financial mistreatment differ from those of chronic verbal aggression and physical aggression, suggesting that financial mistreatment may occur more often as a single form of abuse whereas verbal and physical aggression may more frequently occur together.     

Examining the correlates of engagement and disengagement coping among help-seeking battered women

This study examined several potential correlates of engagement and disengagement coping, including abuse-related factors, socioeconomic and social coping resources, and childhood trauma variables among a sample of battered women (N = 388). Relationship abuse frequency, particularly psychological aggression, and peritraumatic dissociation were the strongest positive predictors of the use of disengagement coping. Social coping resources, including tangible support and appraisals of social support and belonging, were associated with higher engagement coping and lower disengagement coping. A positive association was also found between interparental domestic violence and disengagement coping, and negative associations were found between both childhood physical and sexual abuse and engagement coping. Results suggest that coping strategies used by battered women are multidetermined and deserve further exploration.     

Household Debt and Adult Depressive Symptoms in the United States

This study used data from Waves 1 (1987–1989) and 2 (1992–1994) of the National Survey of Families and Households in the United States and a series of regression models, some of which included individual-specific fixed effects, to estimate associations of particular types and levels of debt with adult depressive symptoms. Results suggest that household debt is positively associated with greater depressive symptoms. However, this association appears to be driven by short-term (unsecured) debt; we found little evidence of associations with depressive symptoms for mid- or long-term debt. The link between short-term debt and depressive symptoms persisted with alternative estimation strategies, including defining debt in absolute and relative terms. Furthermore, this association was particularly concentrated among 51–64 year-old adults, those with a high school education or less, and those who were not stably married throughout the observation period. These findings suggest that short-term debt may have an adverse influence on psychological wellbeing, particularly for those who are less educated, approaching retirement age, or unmarried.     

Brothers are doing it for themselves?: Men's experiences of getting into and getting out of debt

Research on debt and gender has typically had an individual focus. In research on households, and the distribution of income within them, studies have typically focussed on women. When it comes to over-indebtedness, women are also more likely than men to seek debt advice. This article reports on a UK study of men and over-indebtedness that focused on the dynamics of couple relationships. The research used in-depth interviews with menin partnerships and living alone after family breakdown to explore how gender relations and gendered identities figure in men's acquisition and management of problematic personal debt, including their orientation towards and experiences of debt advice. It was undertaken when a period of readily available credit and soaring levels of borrowing had been followed by the ‘credit crunch’, when recession had left many families struggling with problematic debt and when debt advice services were coping with increasing levels of demand. In this context, there were some signs that the effects of the recession were leading men to seek debt advice more than had been the case in the past. Findings illustrate the dynamics of male control of household expenditure and the acquisition of problematic debt. They also suggest that when men have sole responsibility for managing incomes constrained by over-indebtedness, they experience the anxiety and depression more typically reported by women; but ‘male pride’ in relation to financial matters that forms a significant component of their identities acts as a barrier to seeking advice.     

The contribution of social support to the material well‐being of low‐income families

We hypothesize that the social support available from low‐income networks serves primarily a coping function, rather than a leverage function. Social support and its relationship to material well‐being is assessed in a sample of 632 former and current welfare recipients. Respondents report higher levels of perceived emotional, instrumental, and informational support than perceived financial support, and received financial aid is particularly uncommon. Multivariate findings demonstrate that perceived support is unrelated to employment quality, but it reduces the likelihood of living in poverty and is associated with three different measures of coping. These findings generally support the contention that informal aid is important for the everyday survival of low‐income families, but is less able to assist with economic mobility.     

Improvement of financial management by local government: Computer model implementation

Abstract

We develop a computerized optimization model and present its implementation for improvement of financial management at the local government (LG) level. An example of the real-life long-term budget planning and analysis, helped by the model, is presented. The analysis exemplifies good governance practice and observation of standards of efficient management in the area of long-term financial, investment and safe debt planning. These analyses also demonstrate ways of accessing maximum, feasible level of investment expenditure and maximum capacity of a municipality to borrow with all safety measures provided. The model supports informed decision-making process by LG managers, decreases the level of risk and enhances quality and transparency of governance.     

Violence, coping, and mental health in a community sample of adolescents

The current study examined the coping strategies, exposure to violence and psychological trauma symptoms of violent adolescents compared to less violent and nonviolent adolescents in a community sample. An anonymous self-report questionnaire was administered to students in six public high schools (grades 9-12). The 10% most violent adolescents were identified and compared to their less violent and nonviolent peers. A total of 3724 students represented 68% of adolescents in all targeted schools. Ages ranged from 14 to 19 years; 52% were female; and 35% were African-American, 34% Caucasian and 23% Hispanic. Analyses revealed that violent adolescents compared to their less violent and nonviolent peers employed more maladaptive coping strategies, were exposed to higher levels of violence and reported higher clinical levels of psychological trauma symptoms. Maladaptive coping was also significantly associated with psychological trauma symptoms and violent behavior, even after controlling for the influence of demographic factors. The findings support the importance of appropriate identification, assessment and referral services for adolescents in nonclinical settings, and the role that coping strategies play in contributing to adolescent mental health and well-being.     

The effects of economic circumstances on British students' mental and physical health

Three-hundred sixty British university students completed a questionnaire providing information on demographic characteristics, financial circumstances, smoking, and drug and alcohol use. A 14-item inventory of physical symptoms, the short form 36 health survey (SF-36), and the General Health Questionnaire (GHQ-12) were used to assess their physical and psychological well-being. Except for physical functioning, all subscales of the SF-36 and the GHQ indicated levels of health significantly below population norms matched for age and sex. Poorer mental health was related to longer working hours outside the university and difficulty in paying bills. Students who had considered abandoning study for financial reasons had poorer mental health, lower levels of social functioning and vitality, and poorer physical health as indicated by variables on the SF-36. They were also heavier smokers. Students' personal debt was significantly associated with their knowing people involved in prostitution, crime, or drug dealing to help support themselves financially.     

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 Management Practices of Couples with Great Marriages

The purpose of this qualitative study was to learn about financial management practices of 64 self-selected couples from throughout the United States who believe they have great marriages. Three themes emerged from the data. First, for most couples one of the partners handled the day-to-day finances and that required trust and communication. Second, these couples had little or no debt or had a goal of paying off debt. Third, couples lived within their means and were frugal. Other findings described these couples’ practices of having joint or separate accounts, how they dealt with financial challenges, and their view of other couples having financial challenges.     

The Burden of Medical Debt Faced by Households with Dependent Children in the United States: Implications for the Affordable Care Act of 2010

This paper examines the relationship between the number of dependent children and medical debt outcomes. Results show that the presence of dependent children in the household increased the probability of having any medical debt by 8 % for “high” financial burden households, 4 % for households at the 50th percentile of the income distribution and 3 % for privately insured households. The amount of medical debt by households at the 75th percentile of the income distribution was also increased. These findings show that the number of dependent children in the household was associated with medical debt for households in the middle of the income distribution. These results may be explained by the fact that those households at the lower tail of the income distribution are more likely to have public coverage, which tends to have lower cost sharing compared to those with private insurance.     

Undeclared work: A dark side of social trust?

A Eurobarometer survey from 2007 reports that most undeclared work in the EU 27 takes place in the three most high-trusting and non-corrupt countries—Denmark, Sweden and the Netherlands. This is somewhat surprising since social trust is normally associated with economic outcomes that are beneficial to society. The aim of this paper is to test whether undeclared work is a dark side of social trust. Since the Eurobarometer data may contain inaccurate self-reports on undeclared work and social trust may affect the willingness to provide truthful answers, we use more appropriate data in our test. Specifically, we use data from one single country (Danish Values Studies, 1999/2008) and undeclared work morale as an indicator of actual undeclared work—where undeclared work morale is the degree to which a person thinks undeclared work is wrong. We find a significant negative relationship between social trust and undeclared work morale after adjusting for a number of important controls. Thus, the evidence is in line with the bivariate picture of the Eurobarometer survey and suggests a dark side of social trust. We provide some initial explanations.