Academic journal article The Journal of Consumer Affairs

The Intergenerational Transference of Money Attitudes and Behaviors

Academic journal article The Journal of Consumer Affairs

The Intergenerational Transference of Money Attitudes and Behaviors

Article excerpt

The purpose of this report is to provide resources to financial educators working with consumers surrounding intergenerational influences in the development of financial attitudes and behaviors. Financial decisions are influenced by our attitudes, which are highly influenced by cultural issues, including family, ethnicity, gender, and socioeconomic status. Understanding these influences is important as financial educators implement effective intervention techniques. This paper was completed under contract with the Consumer Financial Protection Bureau's Office of Financial Education, in support of its mission to improve the effectiveness of financial education. According to the CFPB, financial educators are unclear how to implement soft skills into practice due to a lack of experiential training. This report outlines strategies financial planners and educators can incorporate into their practice to assist clients in identifying the intergenerational patterns of money attitudes and behaviors.

**********

The objective of this report is to provide resources to financial educators working with consumers surrounding intergenerational influences in the development of financial attitudes and behaviors. Financial decisions are influenced by our attitudes, which are highly influenced by cultural issues, including family, ethnicity, gender, and socioeconomic status. Understanding these influences is important as financial educators implement effective intervention techniques. According to interviews of 20 financial educators around the country--commissioned through the Consumer Financial Protection Bureau--financial educators are unclear how to implement soft skills into practice due to a lack of experiential training. This report outlines strategies that financial planners and educators can incorporate into their practice to assist clients in identifying intergenerational patterns of money attitudes and behaviors.

The specific research question addresses how intergenerational transfer of money attitudes and behaviors influence money attitudes and behavior of the next generation. Sometimes the transfer is purposeful and explicit and other times it is an unconscious transfer. In both scenarios, parents rely upon their values and attitudes (Jorgensen and Savla 2010). The intergenerational transference of money attitudes and behaviors is guided by the family systems and social learning theories.

THEORETICAL PERSPECTIVES

Family Systems Theory

Families are complex systems. Family can be defined as the unit who lives in the same household, or by individuals related by blood line, or by anyone individuals develop a relationship with, related or not. The general premise of Bowen's (1966) family systems theory is that all parts of the system (family) are connected however the family is defined. A change in one part of the system creates change in the other system components (individual family members), much like a gear on a gear shaft cannot be moved without simultaneously moving other parts.

To keep the system in working order, families seek to maintain homeostasis or balance in the system. Homeostasis is similar to the process of a central air conditioning system. When the thermostat senses the room warming, it triggers the system to turn on and cool the room. When the room is cooled to the temperature set to the thermostat, the air conditioning system turns off. If a family member has a dysfunctional money behavior, that individual's behavior is serving a functional purpose for another family member. If the individual strays too far from his or her behavior, the family system is triggered to intervene and return the individual to his or her old behaviors to bring the family back to its normal balance point. The process is illustrated by the grandmother who showers her grandchildren with gifts at every visit despite her serious credit card indebtedness. While her children may understand that the grandmother is living beyond her means and purchasing the gifts on credit, they are also relying on her to provide a "good time" for the grandchildren. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.