Abstract
Past research suggests personality variables may affect a person’s style of financial management. Specifically, the purpose of this study was to investigate possible correlations between self-esteem and risk-taking behaviors with financial management. We created a survey measuring these variables, in addition to asking some demographic questions, and had anonymous participants from a Research Methods class take it online. After conducting the survey with the 27 participants, we were unable to find any notable correlations to support our hypotheses, although we established correlations with our gender and age demographic questions. These results may have been due to the limited size and scope of our sample.
The Effects of Self-Esteem and Risk-Taking Behaviors on Financial Management
Research has shown that there appears to be a relationship between aspects of personality and financial management ability. The studies have focused on elements of personality ranging from openness to experience, sensation seeking (Troisi, Christopher, & Marek, 2006), locus of control (Buehner & Plunkett, 2007), materialism, and self-control (Baumeister, Vohs, & Tice, 2007). Researchers compared these measures to over-spending, willingness to spend money, their discount rates for future monetary outcomes, and amount of credit card debt. We assume these elements cover different aspects of financial management.
While Norvilitis, Merwin, Osberg, Roehling, and Young (2006) established that attitudes towards possessions and self-control had an effect on the accumulation of debt, they also recommended further investigation into the effects of self-esteem on debt accumulation. They cited the works of Lange an...
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...hat materialistic attitudes are harmful to one's well-being. “The psychological perspective attributes the development of materialistic values to family circumstances that create stress and self esteem issues that promote materialistic values,” (Hung Vu Nguyen.) Many people in our culture attribute material goods to personal achievement. Truth rings true with Bertrand Russell’s statement “It is the preoccupation with possessions, more than anything else that prevents us from living freely and nobly.” Even at young ages children are competing and bragging to one another of who has more possessions. Past studies by Rindfleisch say that materialism developed over time as a response to stress due to family issues such as divorce, separation, and loss of loved ones. Materialism leads consumers to put a disproportionate amount of their resources into acquiring goods.
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I chose to do my book review on Brad and Ted Klontz’s “Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health” because I have observed, and participated in, bad financial decisions that have greatly impacted my family for decades. I’ve taken many personal steps to attempt to break the cycle of destruction that ended my parents’ marriage, and to raise my children in a debt free environment. Unfortunately, it has not been an easy task. I have read many financial self help books and attended seminars on the subject. This book caught my attention when it said that simply learning how to budget and pay off debt isn’t enough, that one has to first understand our psychological relationship to money, and then move beyond the financial constraints we put on upon ourselves. For years I had struggled with debt and money management. I had always assumed it was my lack of education that held me from moving forward. Reading this book has been a welcome eye-opener.
Credit card debt is one of this nation’s leading internal problems. When credit was first introduced, and up until around the late 1970’s, the standards for getting a credit card were very high. The bar got lowered and lowered to where, eventually, an 18 year-old college student with almost no income and nothing to base a credit score on previously could obtain a credit card (much like myself). The national credit card debt for families residing in the United States alone is in the trillions (Maxed Out). The average American family has around $9,000 in debt, and pays around $1,3000 a year on interest payments (Maxed Out). Many people have the concern today that these interest rates and fees are skyrocketing; and many do not understand why. Most of these people have to try to avoid harassing collecting agents from different agencies, which takes an emotional and psychological toll on them. While a lot of the newly recognized “risky” people (those with a doubted ability to make sufficient payments) are actually older people who have been customers of certain companies for decades, the credit card companies are actually consciously targeting a different, much more vulnerable group of people: college students. James Scurlock produced a documentary called Maxed Out on this growing problem, in which Senator Jack Reed of (Democrat) of Rhode Island emphasizes the targeting of college students in the Consumer Credit Hearings of 2005
Material possessions or money do not fulfill a person, nor do they define a person. It is others looking at someone else and wanting what they possess, or envy. The old adage “keeping up with the Jones’,” is apt when considering the attitudes of our Western culture toward money and possessions owned by others. We seem to have a type of pecking order, top-down status based on what a person or family has earned.
Robb and Sharpe (2009) mentioned that in doing so, credit card companies placed students in peril of excessive spending and cultivating financial adversities (p.25). To counteract this issue, a concerned group of individuals encouraged university and college campuses to limit credit card vendor access to students. The intention of the study was to examine the role that knowledge of personal finance concepts and principles may play in college students’ decision to revolve a credit card balance in the level of balance
People spend money the way they want to spend it; they forgo expert advice and instead, rely on their own intuitions and judgments when making a purchase. However, the opposite occurs in all other aspects of dealing with money. They pay high sums of money for experts to advise them on how to save their money and before they invest their earnings. Elizabeth Dunn, an associate professor of psychology at the University of British Columbia, and Michael Norton, an associate professor of marketing at the Harvard Business School, decided that spending money should not be considered an “easy” task and wrote a book of expert advice on how to spend money. Using behavioral science research, Happy Money: The Science of Smarter Spending focuses on the relationship
I believe Life is a gift and a responsibility to gain from society and gives it back all the good things we learn from our surroundings and our community we live in. Finance Management in an effective way is required for self and for the society. I believe a successful management of finances is interlinked to oneself and the surrounding society which we live. To improve upon the effective management of my finances I discovered my monthly income than I checked upon my monthly expenses on f...
Malone, K., Stewart, S. D., Wilson, J., & Korsching, P. F. (2010). Perceptions of financial well-
Friedman, H. S., & Schustack, M. W. (2012). Personality: Classic theories and modern research (5th ed). Boston , MA, USA: Pearson
Little empirical research has been carried out in the United Kingdom on everyday experiences of debt. Findings showed that socio demographic factors played a relatively minor role in debt repayment. In the study by Livingstone and Lunt (1992) found that attitudinal factor is the important predictors of debt repayment.
Managing personal finances is an important skill to acquire. However, no where in school is this subject taught. As a result of a lack of preparation, our society is subject to a high percentage of people who lack financial success. Those who are successful at managing their personal finances will find that they are successful in many other areas as well. To learn how to manage personal finances there are books and web sites that provide a step by step guide to successfully managing personal finances. Those who lack financial success often possess many of the same traits.
This study discusses the “Factors that influence the buying behavior of financial management students according to their weekly allowance. This paper started by defining the financial management and the meaning of buying behavior. It also tells the buying behavior of Asian and Filipino people and discusses the factors that will influence the buying behavior. The survey is all about the possible factors that can affect the buying behavior. At the next part of the study was the result of the conducted survey.
Over the course of a person’s life, many of their values change in many different ways. Money is no exception to this change. When someone is younger, their money values are most likely focused on things that they are wanting rather than things that they actually need. Later on in life, however, their values may change from wants to needs because not only have they aged and matured, but they also have more responsibility and more things that they need to be focusing their money on. No matter what a person’s money values are when they are younger, they are most likely not going to stay the same throughout the course of their lifetime.