1. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Diversity and Financial Style Difference between low-income vs middle-income vs higher-income spending practices Collective Individualist

2. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Stresses of Family Finances Financial issues #1 stressor across life cycle Good financial management associated with happier marriages Wealth and happiness are unrelated: As money increases—expectations increase Comparison not based on possessions but of those who have the most Money distracts from other aspects of life

3. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Financial Management Concerns Major stressor for individuals and families Garman 2002 study: 1/3 of workers report financial stress high to the extreme hampers job performance 53% dissatisfaction with personal financial situation 54% worry about personal debt

4. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Top Five Financial Management Issues for Married Couples Issue Percentage with Issue Wish partner more careful spending money 72 % Having trouble saving money72 % Problems deciding what is more important to purchase 66 % Major debts are a problem56 % Partner tries to control the money 51 % Source: Adapted from Olson, Fye & Olson, 1999 n=21,501 couples

5. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Coping with Financial Stress Financial stress associated with family stress and conflict Most difficult periods of family life cycle financially: Child bearing stage Adolescent stage—peak stress period Launching stage Retirement stage Coping resources and behaviors influential

6. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Why Do Finances Cause Problems? Money taboo topic of discussion No budget or adherence to budget Overspend or reliance on credit Styles of spending and saving Use of money as tool to gain power and control Conflicts over meaning of money

7. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Meaning of Money Status Source of power—means of keeping ahead Security Conservative in spending—focus on saving Enjoyment Satisfaction draw from spending for self and others Control Means of control over life and maintaining independence Around & Pauker, 1987

8. © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Life Time Earnings by Degree