Saving behaviours: first wave baby boomers

Abstract

The combination of lower saving rates in the 1980s, high consumer debt, and the impact of the baby boomer generation moving into retirement in an uncertain economic environment creates increasing concern for the financial state of the American household. This study explored the saving behaviours of baby boomers. The family management‐systems model was used as the framework for the study. Research questions included whether saving behaviours were related to income, education and presence of dependent children. Data are from the 1983 National Survey of Consumer Finances. The 1980s represent a decade critical to first wave baby boomers and their continued influence on American society. A study of their saving behaviours provides information necessary to help plan for their future needs. Frequency counts and cross‐tabulations of demographic data provide a profile of saving behaviours and attitudes toward risk and liquidity. Marital status and presence of children were significantly related to reasons for savings. Income, marital status, education and presence of children indicated a significant effect on net worth and attitude towards risk. Income and presence of children affected attitude towards liquidity. Income level was the strongest predictor of net worth as a measure of saving behaviours.

The vigilant parent: Parental role salience affects parents' risk perceptions, risk-aversion, and trust in strangers

“…For instance, parents perceive greater risk Eibach, Libby, & Gilovich, 2003;Drottz-Sjoberg & Sjoberg, 1990) and make more risk-averse decisions than nonparents (Cameron, DeShazo, & Johnson, 2010;Chaulk, Johnson, & Bulcroft, 2003;Spivey, 2010;Wang, Kruger, & Wilke, 2009;Warner & Cramer, 1995).…”

Should I Play or Should I Go? Individuals’ Characteristics and Preference for Uncertainty

“…Similarly, Sunden and Surette [9] used data from the Survey of Consumer Finances-between 1992 and 1995-and reported that women tend to choose less risky pension funds. Warner and Cramer [20] explored the saving behaviors of baby boomers and found similar results. Based on a laboratory experiment, where individuals are asked to choose between five alternative options that differ in terms of expected return and variance, Eckel and Grossman [21] concluded that men choose, on average, riskier options with higher expected returns.…”

“…Daly and Wilson [54] suggest that the responsibilities accompanying marriage and children make individuals less tolerant to uncertainty. Warner and Cramer [20] compared individuals without children to individuals with children, and the latter were less tolerant to uncertainty, which led to the assumption that they demand certainty in the return of their investments. Chaulk [53] also concluded that individuals with children are less likely to be tolerant to uncertainty than those who do not have children, regardless of their age or gender.…”

“…The difference in the averages is not statistically significant (p-value > 0.10), which is a result consistent with the empirical literature, where the majority present statistically non-significant results. Several studies suggest that families with dependents have less preference for uncertainty, because there is an increase in the responsibilities that accompany a marriage and children, making them less tolerant to uncertainty (see, for example, Roszkowski et al [43]; Warner and Cramer [20]; Daly and Wilson [54]; Chaulk [53]).…”

Measuring Conspicuous Consumption

“…For these reasons, consumption patterns influence retirement security. Consumer overspending increases the probability of savings depletion, insufficient funds for healthcare expenses, and a lower standard of living at retirement for oneself and one's spouse, and greater dependency on children or family members for assistance (Helman & Christie, 2012;Herb & Lewis, 1978;Warner & Cramer, 1995). The result of these instances can lead to a greater dependence on Social Security, Medicare, or need-based programs for seniors.…”