A Brief Money Management Scale and Its Associations With Personality, Financial Health, and Hypothetical Debt Repayment

Abstract

Money management is essential for financial health, and more research is needed to better assess people’s money management practices. Therefore, we factor-analyzed 205 scaled questions from previous money management measures to select the best items and examined their internal consistency and convergent validity. Our resulting 18-item Brief Money Management Scale and its factors (management of cash, credit, savings, and insurance) replicate and clarify previous relationships between types of money management and financial outcomes as well as personality and demographic antecedents. Furthermore, this scale is reliable and predicts participants’ hypothetical debt repayment behavior, suggesting concurrent validity. We discuss how future studies can use this multifaceted measure of money management to better understand the antecedents and consequences of different financial decisions.

Financial literacy, money management skill and credit card repayments

“…Meanwhile, Ksendzova et al. (2017) assert that money management is a process where individuals convert their available income into financial outcomes. Hence, good money management skill is linked to better financial decisions.…”

“…Hence, good money management skill is linked to better financial decisions. Even though the measurement of money management skill varies in the literature, most studies use an individual’s self‐reported skill in money management (Ksendzova et al., 2017). Lea et al.…”

“…The latter takes account of individuals’ ability to budget, save, invest and regulate spending (Godwin & Koonce, 1992). Studies by French and McKillop (2016) and Ksendzova, Donnelly, and Howell (2017) show that good money management skills protect individuals from spending excessively and incurring debt.…”

Determinant Factors of Money Management among Nigerian Undergraduates

“…It is very crucial to avoid emotional stress (Pham, Yap, & Dowling, 2012). Ksendzova, Donnelly, and Howell (Ksendzova, Donnelly, & Howell, 2017) asserted that some undergraduates express overconfidence in buying new products leading to misleading and impulse buying. Those with an external locus of control are more likely to express greater borrowing than those who have a keen interest in encouraging healthy money management.…”

Recruiting, selecting, retaining, and monitoring successful investment managers: A review of a scattered literature

“…There is also related literature on the psychology of money and how people think about, spend, and save money (Furnham, 2015;Furnham & Grover, 2019;Furnham & Murphy, 2019;Ksendzova, Donnelly, & Howell, 2017;Lay & Furnham, 2018;Maison, 2019). Many of these studies have shown a link to personality, such as Balasuriya and Yang (2019) who showed how personality traits predict pension decisions.…”