Propensity to plan,financial capability,and financial satisfaction

Propensity to plan is an indicator of financial capability that contributes to consumer financial well‐being. Previous research has shown that propensity to plan is positively related to objective financial well‐being but little research was found to examine its association with subjective financial well‐being. Using financial satisfaction to measure subjective financial well‐being, this study addressed this research gap and had three objectives: (1) to explore factors associated with propensity to plan, (2) to examine the association between propensity to plan and financial capability factors, and (3) to examine the association between propensity to plan and financial satisfaction. Using data from the 2015 US National Financial Capability Study, the results showed socioeconomic differences in propensity to plan. The results suggest consumers with more economic resources had higher scores in propensity to plan. In addition, propensity to plan was positively associated with financial capability factors, suggesting financial planning is a desirable financial behavior. Finally, propensity to plan made unique contributions to financial satisfaction after controlling for socioeconomic and other financial capability factors.     

Effects of financial education on sound personal finance in Korea: Conceptualization of mediation effects of financial literacy across income classes

This study analyzed the role of financial literacy as a mediator between financial education and sound personal finance to assess how financial education affects the soundness of personal finance. In particular, this study conducted three sets of mediation analyses using data from the 2014 Consumer Empowerment Index survey of the Korea Consumer Agency to verify whether the mediating relationship is valid across different income classes of the Korean population. The results suggest that financial literacy works as a mediator between financial education and sound personal finance in the high‐income class and the middle‐income classes. Therefore, policymakers should consider the limitations of financial education and financial literacy when addressing low‐income consumers.     

Visualizing financial success: planning is key

Recent economic troubles in the US and abroad highlight the importance of family financial capability, including an understanding of financial markets. Financial capability is the foundation for desired financial behaviours, such as saving, budgeting, using credit wisely and planning. Study participants, a subsample of respondents to a Turkish university financial literacy survey (n = 374), who reported uninterrupted income for a 3‐year period were grouped as ‘planners’ and ‘non‐planners’. These groupings allowed examination of the relationships between planning, financial management decisions, and differential outcomes in daily household financial well‐being. The practice of preferred financial management behaviours was predictive of debt. This research makes a unique contribution to the literature, demonstrating the importance of uninterrupted income over income amount in support of the planning process. Findings of this study have implications for professionals in the family and consumer sciences field and other practitioners assisting consumers with improving financial management outcomes.     

Determinants of financial worry

Grounded in the transactional stress-coping theory and the Tallis and Eysenck (1994) model of nonpathological worry, the present study sought to advance the conceptual and empirical understanding of financial worry (FW). We positioned objective financial stressors (OFS), subjective financial stressors (SFS), and coping resources as key variables in understanding the determinants of financial worry (FW). The cross-sectional data consisted of responses from a representative sample of 19,385 adults, aged 18 and older, drawn from a large U.S. survey. Hierarchical linear regression results revealed that OFS, SFS, household income, and financial capability (FC) are all key determinants of FW. Furthermore, the results revealed adverse effects of OFS and SFS on FW. These effects were moderated by household income, FC, age, and gender. Implications for future research, employers, practitioners, and policymakers are discussed.     

Impact of family income in early life on the financial independence of young adults: Evidence from a matched panel data

This study investigates whether the family income level in early life influences the financial independence of young adults. Using a large nationally representative U.S. sample (constructed based on the data from the 1999 to 2015 Panel Study of Income Dynamics, its 2009 to 2015 Transition to Adulthood Supplement and its 1997 to 2007 Child Development Supplement), we find that the relationship between one's family income level during adolescence and the financial independence of young adults follows an inverted U‐shape. We find that the college graduation status plays an important role in determining the financial independence of young adults. Once young adults graduate from the college, their financial independence is no longer influenced by their family income level during adolescence. The results show similar patterns after controlling for cognitive and noncognitive abilities and financial behaviours of young adults when they were children or teenagers. The findings of this study have significant implications for policymakers and educators.     

Promoting sustainable financial behaviour: implications for education and research

The current financial crisis has clearly shown that national financial health is strongly tied to the household financial well‐being, and that most consumers were not well equipped with knowledge they needed to cope with this crisis. The failure of markets, institutions, businesses and households during the current financial crisis also revealed the serious economic risks posed by widespread unethical and irresponsible behaviour. The focus of this paper is to explore how, through financial education, we can improve the economic performance of individuals in the economy, both for their own well‐being and for the well‐being of society at large. However, for that to happen, the current approach to financial education will have to include the discussion of attitudes, values and beliefs that enable us to make financial decision that promote long‐term security for families and communities. After establishing the importance of financial education, the challenges and opportunities of the current status of financial education, with emphasis on the complexity of human and financial behaviour, are discussed. It, then, argues for the promotion of responsible behaviour by integrating fundamental values in financial education. Discussion of how selected learning theories can be used to develop effective teaching approaches and the implications for future research conclude the paper.     

Financial capability and emergency savings among South Africans living above and below the poverty line

Emergency savings provide a buffer against financial shocks, particularly among low‐income households. Despite the importance of these funds in lessening financial hardship, many households have not set aside emergency funds. It has been suggested that financial capability may play a role in financial behaviour. Therefore, this study considers whether financial capability is associated with saving for emergencies and whether there are differences in factors that predict emergency savings behaviour among those living below and above the poverty line. Using data from a sample of South Africans, logistic regression is used to determine the predictors of emergency savings. The study finds that those with higher levels of financial capability, related to financial self‐efficacy and having access to a bank account, are more likely to have emergency savings compared with those with lower levels of financial capability. However, no evidence is found to suggest a relationship between objectively measured financial knowledge and emergency savings. Therefore, the findings suggest that self‐assessed financial ability, as measured by financial self‐efficacy, might be more important than objectively assessed ability in the context of individuals making responsible financial choices. Differences in the predictors of emergency savings for those living above and below the poverty line related to socioeconomic and demographic differences, whereas the same financial capability predictors were significant predictors in both samples. The study provides unique insights into the predictors of emergency savings in a developing market context and identifies the characteristics of those who are likely to be financially resilient to unexpected economic shocks. The importance of the broader financial capability construct in predicting emergency savings, for both those living above and below the poverty line, suggests that programmes aimed at encouraging emergency savings should focus on enhancing financial self‐efficacy and financial inclusion.     

Smart technology and service employees’ job crafting: Relationship between STARA awareness,performance pressure,receiving and giving help,and job crafting

Owing to the rapid spread of smart technology, artificial intelligence, robotics, and algorithms (STARA), service jobs are being replaced by these technologies. Despite the potential effect of STARA awareness on employee outcomes, surprisingly few studies have explored its role service employees' work outcomes. Addressing this gap, our research assessed the mediating relationship between STARA awareness, performance pressure, and job crafting, as well as the moderating effects of help-receiving and help-giving on this relationship. We conducted a quantitative study for 301 South Korean service employees using surveys collected at two points in time. The results indicated that service employees' STARA awareness positively affected job crafting through performance pressure. Furthermore, the association between STARA awareness and performance pressure was more prominent for higher levels of help-receiving than for lower levels of help-receiving. Help-receiving further moderated the indirect effect of performance pressure on the STARA awareness and job crafting relationship. While the mitigating effect of help-giving was not supported, we observed a significantly positive association between STARA awareness and performance pressure only when help-receiving was high and help-giving was low. These findings contribute to the literature on technology in the retailing sector by uncovering how STARA awareness affects service employees’ performance pressure and job crafting and the roles played by help-giving and help-receiving in this relationship.     

Professional financial advice,self‐control and saving behavior

This study investigates whether professional financial advice (“PFA”) can assist households in making better‐informed financial decisions and whether PFA may help households achieve better self‐control in implementing financial plans. In particular, we examine the effects of PFA and self‐control ability on saving behavior, as well as the interaction of PFA and self‐control on saving behavior. We extend the dual‐self model of impulse control and derive three hypotheses: (a) people with higher levels of self‐control save more than those with lower levels of self‐control; (b) PFA has a positive effect on saving behavior; and (c) people with lower levels of self‐control benefit more from obtaining PFA than those with higher levels of self‐control. We use a German household panel dataset SAVE, which was collected annually from 2005 to 2009. Respondents are asked whether they have discussed financial matters with financial advisors in banks, insurance companies or financial service providers. Using a number of behavioral proxies of self‐control, we create an aggregate measure of self‐control through factor analysis. We estimate a fixed‐effects model to identify the effects of PFA and self‐control on financial assets. Empirical results show that both PFA and self‐control have a significant positive relationship with financial assets. The interaction term of PFA and self‐control is a significant predictor of financial assets. We discuss conclusions for the financial advising industry and public policy aimed at consumer financial literacy.     

Debt as a source of financial stress in Australian households

This paper examines the role of demographic, socio‐economic and debt portfolio characteristics as contributors to financial stress in Australian households. The data are drawn from the most recent Household Expenditure Survey and relate to 3268 probability‐weighted households. Financial stress is defined, among other things, in terms of financial reasons for being unable to have a holiday, to have meals with family and friends, to engage in hobbies and other leisure activities, and general money management. Characteristics examined include family structure and composition, source and level of household income, age, gender and marital status, ethnic background, housing value, debt repayment of various types and credit card usage. Binary logit models are used to identify the source and magnitude of factors associated with financial stress. The evidence provided suggests that financial stress is higher in families with more children and those from ethnic minorities, especially when reliant on government pensions and benefits, and lower in families with higher disposable incomes and housing values. There is weak evidence that Australia's historically high levels of household debt cause financial stress.     

The relationships of financial literacy with both financial behavior and financial well-being: Meta-analyses based on the selective literature review

This study conducted meta-analyses of the relationships between financial literacy and both financial behavior and financial well-being. Peer-reviewed articles published on financial literacy in the field of consumer studies were collected by July 29, 2020. Fourteen articles were eligible for the meta-analyses. The results showed positive relationships of financial knowledge with desirable financial behavior and financial well-being. Our comparison of objective and subjective financial knowledge indicated that subjective knowledge had stronger relationships with both financial behavior and financial well-being than objective knowledge. These two types of knowledge also had different paths to financial well-being in that subjective knowledge had both direct and indirect effects on financial well-being through financial behavior, whereas objective knowledge only had an indirect effect. The relationship between financial knowledge and financial behavior appeared stronger in cross-sectional data than in longitudinal data. The implications of these results and possible directions for future consumer science research were discussed.     

Emerging adults' financial capability: A financial socialization perspective

This exploratory qualitative research uses the United Kingdom as a case study to understand how past and present financial socialization agents have either enhanced or inhibited emerging adults' financial capability in order to highlight potential opportunities for future policy and practice interventions. Three primary socialization agents were identified. The family as trusted primary advisor continues well into adulthood, even where family financial capability may be low. Beyond this, emerging adults only reluctantly engage with their bank, rely on just‐in‐time experiential learning or self‐socialize via diving, often with false confidence, into the internet. Although there are many quantitative studies on financial socialization, this paper fills a gap by taking a deeply qualitative approach showing, for the first time, empirically highlighting the limited number of financial socialization agents through the voices of emerging adults. The findings contradict previous socialization research that suggests parental socialization reduces into adulthood.     

Measuring responsible financial consumption behaviour

Sound consumption decisions determine individuals’ well‐being; responsible financial consumption behaviour (RFCB) affects not only their finances but also their societal status and emotional state. The failure to manage personal finances responsibly may result in serious long‐term consequences for individuals and society overall. In order to evaluate the concept of RFCB, this study combines two established theoretical frameworks—the family management system and the theory of planned behaviour. The paper investigates the relationships among RFCB, responsible financial attitudes, financial literacy and behavioural control. Its theoretical model is tested on a random sample of 494 respondents and analysed using PLS‐SEM. The results confirm the formation of responsible consumption behaviour by six formative elements: self‐control in spending, planning for the future, seeking information, education, rational decision‐making and solvency. The findings also indicate that all three focal variables have a direct effect on RFCB.     

Coping with Job Insecurity: The Role of Procedural Justice, Ethical Leadership and Power Distance Orientation

This study examines the relationship between procedural justice and employee job insecurity, and the boundary conditions of this relationship. Drawing upon uncertainty management theory and ethical leadership research, we hypothesized that procedural justice is negatively related to job insecurity, and that this relationship is moderated by ethical leadership. We further predicted that the moderating relationship would be more pronounced among employees with a low power distance orientation. We tested our hypotheses using a sample of 381 workers in Macau and Southern China. The results support all of our hypotheses. The implications of these results for research and practice are discussed.     

Consumption smoothing,risk sharing and financial integration

Theories indicate that financial integration should allow economies to better share risk and thus improve consumption smoothing. We construct two widely used price‐based measures of financial integration (i.e., the standard correlation and the adjusted R‐squared) and test whether consumption volatility declines as international equity markets become more integrated. Pooled and panel estimates for three different groups of countries (i.e., G7, G20 and EU) provide no significant evidence of improved consumption smoothing as financial integration rises. This evidence is supported by a battery of robustness checks and holds over time. Taken together, our results suggest that convergence in international equity prices does not necessarily represent the channel through which risk‐sharing opportunities arise or consumption smoothing improves.     

It's not me,it's you: Testing a moderated mediation model of subordinate deviance and abusive supervision through the self‐regulatory perspective

Synthesizing self‐regulatory theories, we provide new insights into the antecedents of abusive supervision. We, from the perspective of supervisor's self‐regulatory resources depletion or impairment, introduce supervisor hindrance stress as an underlying mechanism of the subordinate deviance–abusive supervision relationship: this mediated relationship will be intensified at the level of high subordinate job performance. In addition, we develop a complex contingency model and propose a three‐way interaction (i.e., subordinate deviance, job performance, supervisor outcome dependence) to obtain the complete understanding of the subordinate deviance–abusive supervision relationship facilitated through the supervisors’ hindrance stress. To test our moderated moderated mediation model, we gathered time‐lagged and multisource data from a large food service company located in southern China. We collected data at two different points (i.e., Time 1 and Time 2) from supervisors and their direct reports (N = 298 responses from 68 supervisors and 298 direct reports), and findings provide support for the hypothesized moderated moderated mediation model of our study. We highlight the implications of our study for theory, research, and practice.     

The reciprocal and non‐linear relationship of sustainability and financial performance

The goal of this paper is to describe the link between financial performance and the level of sustainability. In a novel approach, the paper classifies firms based on past financial success to address a potentially reciprocal relationship. For the groups of better and worse performing firms and for the entire sample, the above link is then tested, also accounting for non‐linearity in the relationship. We show that environmental management system (EMS) implementation as a proxy for a firm's sustainability level is only positively associated with the financial performance of financially well‐performing firms. Conversely, it has a negative association with the performance of less good firms. We show that this implies that firms cannot change from good to bad performance, and vice versa, solely through the implementation of an EMS, and also that the result remains when introducing non‐linearity in the link. Based on this result, we discuss implications for the direction of causality.     

Vulnerability of the unbanked: evidence from a developing country

Financial exclusion is an apparent phenomenon globally, the majority of people without bank accounts living in the developing countries. Those who lack access to financial services could experience vulnerability. Therefore, the purpose of this study was to unfold the vulnerability of the low‐income unbanked consumers in a Pakistani context. Qualitative data were gathered from low‐income unbanked consumers through in‐depth interviews. The findings suggest that unbanked consumers are vulnerable in many ways. The participants faced several negative consequences due to their financial exclusion, which resulted into their personal, economic and social detriment. Based on our study findings, we provide managerial and public policy implications for the well‐being of the low‐income unbanked consumers. Lastly, study limitations and future study guidelines are discussed.     

Financial knowledge among Iranian investors

This research is the first to describe financial knowledge in the Islamic Republic of Iran. Data were collected from a convenience sample of investors in the Tehran Stock Exchange. The data were used to examine objective and subjective knowledge as well as overconfidence in one's financial knowledge. The results indicated that compared with other populations, Iranians did not perform well on either basic or advanced financial knowledge questions, especially when the questions dealt with interest rates. This is likely related to the Islamic law ban on usury‐based investing. Regression analysis indicated that demographic charactristics related to basic financial knowledge were income, labour force status and being a student. Demographic characteristics related to advanced financial knowledge were education, labour force status and age. Higher income and education reduced the odds of being overconfident about one's financial knowledge, while being a student and male increased the odds. The article concludes with recommendations about future research as well as building a national financial education strategy.