Personal Finance: An Interdisciplinary Profession

Article excerpt

This commentary recommends that financial counseling and planning research, education, and practice be framed as an interdisciplinary profession called personal finance. Authors summarize the history of the profession and key theories providing the conceptual foundation. In order for the emerging profession of personal finance to achieve significant visibility and gain maturity, professionals must reach consensus on defining collective scholarship. Readers are encouraged to engage in the dialogue and comment on the call to action by contacting the lead author.

Key Words: financial counseling, financial planning, household behavioral finance, interdisciplinary profession, personal finance

Introduction

At the November 2006 Association for Financial Counseling and Planning Education® (AFCPE®) annual conference in San Antonio, organization members took time to examine past and present endeavors and to discuss framing the future. As part of that discussion, a group of scholars within the organization began to raise some critical questions. What definition is given for the work of financial counseling and planning? Is this work described as a discipline, a profession, or a focus area? What is its name? What scientific theories provide the foundation for the work? Can financial counseling and planning researchers, educators, and practitioners reach consensus on common language to describe the work? What specific action steps would leverage collective scholarship and experience to advance theory and practice?

In the weeks following the annual conference, the authors of this commentary continued discussing these questions. This article reports the results of those in-depth discussions, not as a finished product, but as an invitation to rich and thoughtful discussion of the critical questions that face financial counseling and planning researchers, educators, and practitioners. In preparation for further dialogue at the 2007 AFCPE® annual conference in Tampa, Florida, comments from readers are encouraged and may be sent via e-mail to the lead author at jschuchardt@csrees.usda. gov.

The Emergence of Personal Finance

Institutional, political, and consumer attention paid to personal finance topics is a relatively recent trend. This is particularly true in higher education. Prior to 1990, the majority of researchers interested in the topic of personal finance considered themselves to be family economists,1 consumer economists,2 consumption economists,3 household resource management specialists,4 or consumer educators. 5 Not every university had academic programs devoted solely to the study of consumer and personal finance issues. Mainstream economists and business faculty gave little attention to personal finance, focusing instead on broader issues such as the movement of money markets and the development of corporate finance principles.

Several significant events occurred in the late 1980s and early 1990s that changed the academic landscape. AFCPE®, with roots in, but separate from, family and consumer economics, was formed in the mid-1980s. The establishment of Financial Counseling and Planning (FCP) set the stage for researchers interested in personal finance topics to "generate knowledge, publish information, educate professionals, and provide research programs" (Reynolds & Abdel-Ghany, 2001, p. 382). After AFCPE® was formed, other organizations and journals that focus on aspects of personal finance were introduced.6 These journals, offering both basic and applied research, support emerging applications in education, practice, and policy and have the potential to be widely indexed.

Personal finance can be traced back about 200 years to efforts by economists to better understand the daily management of the home (Gross, Crandall, & Knoll, 1980) and was largely a family and consumer sciences (formerly home economics) specialty with little attention from mainstream economists and business faculty. …