Why We Asses Our Financial Situation As Good Or Bad Income And Money Attitudes Influence On Subjecti

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Why We Asses Our Financial Situation As Good Or
Bad? Income And Money Attitudes Influence On
Subjective Financial Situation Assessment

• Agata Gasiorowska
• Wroclaw University of Technology

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Rich or poor is a state of mind. People may be
financially poor but psychologically rich and
vice versa(Tang, Luna-Arocas, Sutarso, Tang,
2004, p.119)
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Factors influencing money satisfaction

• The relative standards model - people evaluate
  their success in each domain on the base of
  standards such as social comparisons, desires,
  and comparisons with the past (Solberg et al.,
  2002)
• Peoples satisfaction with their income and
  material goods depends on the discrepancies
  between what they possess and what they desire
• The size of such a discrepancy might be related
  to trait materialism, and to money attitudes
  (Shafer, 2000 Gasiorowska, 2003).

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Measurement of Money Attitudes

• Three general categories of scales used for
  estimation of peoples attitudes or beliefs about
  money
• based on money utility or marginal utility - e.g.
  Brandstätter, Brandstätter, 1996
• idiosyncratic scales - e.g. Wernimont,
  Fitzpatrick, 1972 Prince, 1993 Rubinstein, 1981
• real scales - Money Attitude Scale by Yamauchi
  and Templer (1982), Money Beliefs and Behaviour
  Scale by Furnham (1984) and Money Ethic Scale by
  Tang (1992)
• Two original Polish scales Attitudes Towards
  Money Scale (Wasowicz-Kirylo 2008,
  Wasowicz-Kirylo, Wisniewska, 2005) and SPP Money
  Attitudes Questionnaire (Gasiorowska, 2003,
  2008).

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SPP Money Attitudes Questionnaire

• Satisfactory internal validity and reliability,
  better adjusted to Polish conditions than other
  money attitudes scales, like MAS or MES
• Dimensions
• Control and planning
• Power
• Anxiety
• Debt aversion
• Occasion seeking
• Money as evil
• Cash

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Money attitudes and money satisfaction - previous
studies

• Tang, Luna-Arocas, Sutarso, Tang, 2004
• the love of money as moderator of relationship
  between income and pay satisfaction
• the love of money is positively related to income
  and to pay satisfaction.
• Tang, Tang, Homaifar, 2006
• income signi?cantly increased the importance of
  the love of money for part of sample
• income was related to pay satisfaction, love of
  money was not related to pay satisfaction.
• Tang, Chiu, 2003
• negative relations between the love of money and
  pay satisfaction and between income and the love
  of money
• Wilhelm, Varcoe and Huebner Fridrich, 1993
• the influence of the objective indicators on
  financial well-being not mediated by money
  beliefs,
• money attitudes contribute in predicting
  assessment of financial satisfaction

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Hypotheses

• H1. Subjective evaluation of financial situation
  depends on objective income level and on money
  attitudes
• H2 Gender moderates the relation between income
  and subjective evaluation of financial situation.
  
• H3. Gender moderates the relation between money
  attitudes and subjective evaluation of financial
  situation.

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Participants Procedure
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Results - preliminary study
control and planning
ß0.22
ß0.27
R20.13
ß0.13
R20.06
anxiety
financial situation
ß-0.15
ß-0.14
ß-0.15
power
women ?2/df1.021, RMSEA0.013, TLI0.991,
CFI0.994
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men ?2/df1.308, RMSEA0.037, TLI0.949,
CFI0.967
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Results - secondary study - Women
R20.25
financial situation
Income
ß0.41
ß0.15
ß0.12
control and planning
ß-0.25
ß-16
anxiety
10
?2/df0.709, RMSEAlt0.001, TLI1.082, CFI1
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Results - secondary study - Women
R20.22
financial situation
Income
ß0
control and planning
ß0
anxiety
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?2/df0.882, RMSEAlt0.001, TLI1.033, CFI1
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Results - secondary study - Women
R20.10
financial situation
Income
ß0
control and planning
anxiety
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?2/df1.729, RMSEA0.075, TLI0.794, CFI0.868
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Results - secondary study - WomenMediation
analyses
financial situation
Income
control and planning
p0.156
anxiety
p0.034
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Results - secondary study - Men
R20.50
Income
ß0.53
financial situation
ß0.40
control and planning
ß-0.11
anxiety
ß-0.17
ß-0.13
occasion seeking
ß-0.20
power
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debt aversion
?2/df0.975, RMSEAlt0.001, TLI1.008 CFI1
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Results - secondary study - Men
R20.25
Income
financial situation
ß0
control and planning
?0
anxiety
?0
ß0
occasion seeking
ß0
power
15
debt aversion
?2/df1.917, RMSEA0.104, TLI0.718 CFI0.789
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Results - secondary study - Men
R20.20
Income
ß0
financial situation
control and planning
anxiety
occasion seeking
power
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debt aversion
?2/df2.609, RMSEA0.138, TLI0.506, CFI0.684
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Conclusions (1)

• Subjective evaluation of financial situation
  depends not only on objective income level, but
  also on money attitudes
• Gender does not moderate the influence of income
  level on money satisfaction
• Contribution made by money beliefs to predict
  financial progress is different for men and women

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Conclusion (2)

• For women
• The effect of income on financial satisfaction is
  definitely stronger than effect of money
  attitudes
• Anxiety connected with money is mediating the
  effect of income on financial satisfaction
• High income reduces negative emotions and fear in
  the situation connected with money, which in turn
  increases the level of satisfaction
• For men
• the effect of money attitudes is primarily
  additive
• income together with money attitudes explains
  financial satisfaction
• It is very probable, that when females are
  assessing their financial situation, they take
  into consideration also the income their
  spouse/partner, but when males do so, they
  concentrate on their own situation, as they are
  socially perceived as head of family and
  breadwinners.

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