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Understanding Financial Diversity and Management Concerns in Different Income Levels

Explore the differences in spending practices based on income levels and the impact of financial management on marriages and life satisfaction. Discover coping strategies for financial stress and why finances cause problems in relationships. Gain insights into the meaning of money and its effect on power, control, and happiness.

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Understanding Financial Diversity and Management Concerns in Different Income Levels

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  1. Diversity and Financial Style • Difference between low-income vs middle-income vs higher-income spending practices • Collective • Individualist

  2. 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. 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. Top Five Financial Management Issues for Married Couples Source: Adapted from Olson, Fye & Olson, 1999 n=21,501 couples

  5. 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. 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. 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. Life Time Earnings by Degree

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