Over-indebtedness and the interplay of factual and mental money management: An interview study
Previous research has shown that money management contributes to over-indebtedness. This article sheds new light on this relation by looking at factual money management and its mental underpinnings, mental accounting. In a conceptual model we propose that fuzzy factual and mental money management practices aggravated by lack of congruency between factual and mental structures play an important role in over-indebtedness. Twenty-five in-depth interviews deliver preliminary support for this proposition. Successful financial control seems to build on efficient and inter-coordinated factual and mental money management. This reduces the willpower necessary for controlling financial behavior and helps to prevent and fight over-indebtedness.
|Date of creation:||Apr 2010|
|Date of revision:|
|Contact details of provider:|| Postal: +44-(0)20-7882-3167|
Web page: http://www.busman.qmul.ac.uk/research/cgr/index.html
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kirchler, Erich & Hoelzl, Erik & Kamleitner, Bernadette, 2008. "Spending and credit use in the private household," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(2), pages 519-532, April.
- Lea, Stephen E. G. & Webley, Paul & Levine, R. Mark, 1993. "The economic psychology of consumer debt," Journal of Economic Psychology, Elsevier, vol. 14(1), pages 85-119, March.
- Heath, Chip & Soll, Jack B, 1996. " Mental Budgeting and Consumer Decisions," Journal of Consumer Research, Oxford University Press, vol. 23(1), pages 40-52, June.
- Pahl, Jan, 2008. "Family finances, individualisation, spending patterns and access to credit," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(2), pages 577-591, April.
- William R. Emmons, 2005. "Consumer-finance myths and other obstacles to financial literacy," Supervisory Policy Analysis Working Papers 2005-03, Federal Reserve Bank of St. Louis.
- Bernadette Kamleitner & Erich Kirchler, 2006. "Personal loan users’ mental integration of payment and consumption," Marketing Letters, Springer, vol. 17(4), pages 281-294, December.
- Richard H. Thaler, 2008.
"Mental Accounting and Consumer Choice,"
INFORMS, vol. 27(1), pages 15-25, 01-02.
- Mizuho Kida, 2009. "Financial vulnerability of mortgage-indebted households in New Zealand - evidence from the Household Economic Survey," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 72, pages 5-12, March.
- Shefrin, Hersh M & Thaler, Richard H, 1988. "The Behavioral Life-Cycle Hypothesis," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 609-43, October.
- Sarah Brown & Gaia Garino & Karl Taylor & Stephen Wheatley Price, 2005.
"Debt and Financial Expectations: An Individual- and Household-Level Analysis,"
Western Economic Association International, vol. 43(1), pages 100-120, January.
- Sarah Brown & Karl Taylor & Gaia Garino & Stephen Wheatley Price, 2003. "Debt and financial expectations: an individual and household level analysis," Discussion Papers in Economics 03/5, Department of Economics, University of Leicester, revised Feb 2004.
- Drentea, Patricia & Lavrakas, Paul J., 2000. "Over the limit: the association among health, race and debt," Social Science & Medicine, Elsevier, vol. 50(4), pages 517-529, February.
- Hayhoe, Celia Ray & Leach, Lauren & Turner, Pamela R., 1999. "Discriminating the number of credit cards held by college students using credit and money attitudes," Journal of Economic Psychology, Elsevier, vol. 20(6), pages 643-656, December.
- Ranyard, Rob & Craig, Gill, 1995. "Evaluating and budgeting with instalment credit: An interview study," Journal of Economic Psychology, Elsevier, vol. 16(3), pages 449-467, September.
- Burns, Maree & Burgoyne, Carole & Clarke, Victoria, 2008. "Financial affairs? Money management in same-sex relationships," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(2), pages 481-501, April.
- Lawrance, Emily C, 1991. "Poverty and the Rate of Time Preference: Evidence from Panel Data," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 54-77, February.
- DeVaney, Sharon A. & Lytton, Ruth H., 1995. "Household insolvency: A review of household debt repayment, delinquency, and bankruptcy," Financial Services Review, Elsevier, vol. 4(2), pages 137-156.
- Livingstone, Sonia M. & Lunt, Peter K., 1992. "Predicting personal debt and debt repayment: Psychological, social and economic determinants," Journal of Economic Psychology, Elsevier, vol. 13(1), pages 111-134, March.
- Walker, Catherine M., 1996. "Financial management, coping and debt in households under financial strain," Journal of Economic Psychology, Elsevier, vol. 17(6), pages 789-807, December.
- Drazen Prelec & George Loewenstein, 1998. "The Red and the Black: Mental Accounting of Savings and Debt," Marketing Science, INFORMS, vol. 17(1), pages 4-28.
- 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.
- Lea, Stephen E. G. & Webley, Paul & Walker, Catherine M., 1995. "Psychological factors in consumer debt: Money management, economic socialization, and credit use," Journal of Economic Psychology, Elsevier, vol. 16(4), pages 681-701, December.
- Stone, Brice & Maury, Rosalinda Vasquez, 2006. "Indicators of personal financial debt using a multi-disciplinary behavioral model," Journal of Economic Psychology, Elsevier, vol. 27(4), pages 543-556, August.
When requesting a correction, please mention this item's handle: RePEc:cgs:wpaper:34. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Pedro S. Martins)
If references are entirely missing, you can add them using this form.