Propensity to plan, financial capability, and financial satisfaction

Xiao, Jing Jian; O’Neill, Barbara

doi:10.1111/ijcs.12461

Cited by 108 publications

(162 citation statements)

References 45 publications

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“…It is expected that more mandatory personal finance courses in high school taught by teachers who are better trained in personal finance will be beneficial to foster desirable financial behaviours amongst young adults. Financial literacy and financial management practices, including budgeting (Xiao & O'Neill, ), credit card debt management (Shen, Sam Abdoul, & Jones, ) and saving with different purposes (Nam, Lee, McMahon, & Sherraden, ), especially emergency savings (Babiarz & Robb, ), can be incorporated into middle and high school curriculums to teach future young adults to manage their finances. Since most young adults do not go to college, high schools assume more responsibilities in helping students foster useful soft skills such as critical thinking, analysis and problem‐solving abilities.…”

Section: Resultsmentioning

confidence: 99%

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

Cui

Xiao

et al. 2019

Int J Consumer Studies

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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.

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Section: Resultsmentioning

confidence: 99%

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

Cui

Xiao

et al. 2019

Int J Consumer Studies

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“…To test H3, planning was selected as a behaviour at the high end of the behavioural hierarchy. Planning behaviour is associated with high economic status and financial capability variables, and contributing to financial well‐being (Xiao & O'Neill, ). Figures were constructed to compare budgeting and planning behaviour by financial resource variables.…”

Section: Resultsmentioning

confidence: 99%

Mental accounting and behavioural hierarchy: Understanding consumer budgeting behaviour

Xiao

O’Neill

2018

Int J Consumer Studies

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Budgeting is an important step in consumer finance. Budgeting behaviour is considered a desirable financial behaviour to indicate consumer financial capability. However, systematic research on budgeting behaviour with a large scale national sample is limited. The purpose of this study was to address this research gap and examine characteristics of budgeting behaviour from the perspective of a behavioural hierarchy, which is related to mental accounting. The assumption holds that consumer financial behaviours may be performed in a hierarchical manner along with an increase in economic resources. Using data from the 2015 National Financial Capability Study, evidence suggests that budgeting behaviour is at the lower end of the behavioural hierarchy. This finding has implications for consumer financial professionals.

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“…The extant literature also provides evidence of a positive connection between proactive financial behaviors and well-being beyond the financial domain. For instance, several studies using cross-sectional data from young adults, including college students, have found a positive association between proactive financial behaviors and personal well-being (Shim et al, 2009;Xiao and O'Neill, 2018), psychological well-being (Britt et al, 2015;Kim et al, 2003) and life satisfaction (Gutter and Copur, 2011;Norvilitis and MacLean, 2010). Some researchers have found similar associations over time.…”

Section: Proactive Financial Behavior and Subjective Well-beingmentioning

confidence: 97%

Materialist values, financial and pro-environmental behaviors, and well-being

Helm

Serido

Ahn

et al. 2019

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Purpose The purpose of this study is to examine young consumers’ financial behavior (e.g. saving) and pro-environmental behavior (i.e. reduced consumption and green buying) as effective proactive strategies undertaken in the present to satisfy materialistic values and maximize well-being. Design/methodology/approach The study is based on an online survey among a panel of young American adults (N = 968). Findings The study finds a positive effect of materialism on personal well-being and negative effects on financial satisfaction, proactive financial coping and reduced consumption, but no effect on green buying, a separate and distinct pro-environmental strategy. Both proactive financial coping and reduced consumption are positively associated with subjective well-being. Research limitations/implications Future research should re-examine conceptualizations of materialism in the context of climate change and the meaning of possessions in the global digital economy; studies could also focus on the specific well-being effects of reduced consumption and alternative pathways to align materialistic and environmental values. Practical implications Consumer education should look to models of financial education to demonstrate how limited natural resources can be managed at the micro level to enhance consumers’ subjective well-being, as well as reduce resource strain at the macro level. Originality/value Key contributions are the examination of materialism and consumption in the dual contexts of financial and environmental resource constraints and the effects of these key macro-social phenomena on consumers’ perceived well-being. Another study highlight is the differentiation of two strategies for proactive environmental coping, of which only one, reduced consumption, increased personal well-being and decreased psychological distress.

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Propensity to plan, financial capability, and financial satisfaction

Cited by 108 publications

References 45 publications

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

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

Mental accounting and behavioural hierarchy: Understanding consumer budgeting behaviour

Materialist values, financial and pro-environmental behaviors, and well-being

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