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The ant and the grasshopper revisited: The present psychological benefits of saving and future oriented financial behaviors

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  • Shim, Soyeon
  • Serido, Joyce
  • Tang, Chuanyi
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    Abstract

    This study examines the impact of saving and future-oriented financial behaviors on young adults’ well-being. Using two-timed longitudinal data (N=748) collected both prior to and during the economic crisis, we tested and confirmed a psychological process model (i.e., financial attitude→behavioral intention→actual behavior→well-being), one that included parental norms, perceived behavioral control and financial planning horizon as antecedent factors. Our findings indicate that the more positive a young adult’s attitude toward financial behaviors, and the greater his/her perception of parental expectations, then the stronger will be this young adult’s intention to perform such behaviors. We found that behavioral intention at Time 1 contributed to actual financial behaviors at Time 2, which in turn was positively related to a young adult’s present sense of well-being. We also found that perceived behavioral control and financial planning horizon influenced both behavioral intention and actual behavior. Although perceived impact of the economic crisis moderated the link between past and present well-being, it did not affect the hierarchical flow of the model. We discuss the theoretical and practical implications of our study pertaining to consumer financial education.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Economic Psychology.

    Volume (Year): 33 (2012)
    Issue (Month): 1 ()
    Pages: 155-165

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    Handle: RePEc:eee:joepsy:v:33:y:2012:i:1:p:155-165

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    Web page: http://www.elsevier.com/locate/joep

    Related research

    Keywords: Saving attitude and behavior; Well-being; Theory of Planned Behavior; Young adults;

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    References

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    1. Brown, Sarah & Taylor, Karl & Wheatley Price, Stephen, 2005. "Debt and distress: Evaluating the psychological cost of credit," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 642-663, October.
    2. Anderson, C. Leigh & Nevitte, Neil, 2006. "Teach your children well: Values of thrift and saving," Journal of Economic Psychology, Elsevier, vol. 27(2), pages 247-261, April.
    3. Olshavsky, Richard W & Granbois, Donald H, 1979. " Consumer Decision Making-Fact or Fiction?," Journal of Consumer Research, University of Chicago Press, vol. 6(2), pages 93-100, Se.
    4. Massimo Guidolin & Elizabeth A. La Jeunesse, 2006. "Cross-country personal saving rates," National Economic Trends, Federal Reserve Bank of St. Louis, issue May.
    5. Moschis, George P, 1985. " The Role of Family Communication in Consumer Socialization of Children and Adolescents," Journal of Consumer Research, University of Chicago Press, vol. 11(4), pages 898-913, March.
    6. Rabinovich, Anna & Webley, Paul, 2007. "Filling the gap between planning and doing: Psychological factors involved in the successful implementation of saving intention," Journal of Economic Psychology, Elsevier, vol. 28(4), pages 444-461, August.
    7. Easterlin, Richard A., 2006. "Life cycle happiness and its sources: Intersections of psychology, economics, and demography," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 463-482, August.
    8. Kennon Sheldon & Sonja Lyubomirsky, 2006. "Achieving Sustainable Gains in Happiness: Change Your Actions, not Your Circumstances," Journal of Happiness Studies, Springer, vol. 7(1), pages 55-86, 03.
    9. Ajzen, Icek, 1991. "The theory of planned behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 50(2), pages 179-211, December.
    10. Fisher, Patti J. & Montalto, Catherine P., 2010. "Effect of saving motives and horizon on saving behaviors," Journal of Economic Psychology, Elsevier, vol. 31(1), pages 92-105, February.
    11. Coleman, Richard P, 1983. " The Continuing Significance of Social Class to Marketing," Journal of Consumer Research, University of Chicago Press, vol. 10(3), pages 265-80, December.
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    Cited by:
    1. Cahit Guven, 2008. "Reversing the Question. Does Happiness Affect Consumption and Savings Behavior?," Economics Series 2008_20, Deakin University, Faculty of Business and Law, School of Accounting, Economics and Finance.

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