Debt Literacy and Social Work

Abstract

In the United States today, more than 56% of individuals are in debt (Foster,Meijer, Schuh, & Zabek, 2011). Debt literacy may be defined as the ability to correctly assess debt contracts andcompound interest when making financial decisions about loans, credit cards,interest rates and fees. Often, low-income individuals are vulnerable toexperiencing debt and social workers are uniquely placed to assist them. However, little is known about the debtliteracy levels of Master of Social Work (MSW) students who are about to becomesocial workers. This study attempts tofill this gap. Data were collected from 48MSW students, and analyzed using Chi-Square goodness-of-fit tests, Chi-Square testsof independence, and Fishers’ Exact Test where appropriate. Resultsindicate that social work studentsscored low on all debt literacy measures, but were statistically similar to thegeneral population and to service providers in the asset building field. Inaddition, students with higher self-assessed financial knowledge, or who comefrom households with higher incomes or network, tend to have higher debtliteracy levels. Implications for social work practice and education are discussed

Gendered debt – a scoping study review of research on debt acquisition and management in single and couple households

“…Gender thus appears to be both a relational and a structural aspect that influences household debt, a notion perhaps diminished in prevailing individualising tendencies in policy and interventions related to poverty and debt (cf. Loke & Hageman, 2013;Walker, 2012). Individualising discourses can also be questioned from the perspective of service users; those who seek professional help for their debt problems state that interventions on how to create budgets or make 'rational' financial decisions provide knowledge they already possess but cannot apply due to insufficiency of income (Klingander, 2000;Krumer-Nevo et al, 2017).…”

“…Furthermore, the current body of knowledge appears to align with the theoretical paradigm that Krumer-Nevo (2016) calls 'the conservative poverty paradigm', which positions debt as a problem of culture and financial behaviour on the individual level (cf. Loke & Hageman, 2013). That this paradigm permeates policy and social work practice towards impoverished in general has been shown in Portugal (Rodrigues, Sousa, & Alarcão, 2016), the US (Despard, Chowa, & Hart, 2012) and Sweden (Panican & Ulmestig, 2016), providing social services with moralising tendencies that emphasise control and behavioural change (cf.…”

On the Gender Gap in Financial Knowledge: Decomposing the Effects of Don't Know and Incorrect Responses*

“…In terms of content, the most frequently used financial knowledge items fall into four categories: numeracy, cash‐flow management, saving and borrowing, and investment (Hung et al., ; Huston, ). Some scholars focus on one content area (e.g., Loke and Hageman, ), while others cover two or more areas (e.g., Borden et al., ). Scholars often employ either knowledge‐based performance tests (e.g., Lusardi and Mitchell, ), subjective self‐reports (e.g., Lyons, Chang and Scherpf, ), or both (e.g., Agnew and Szykman, ) to measure financial knowledge.…”

Effect of Debt Knowledge on the Indebtedness of Employees in the Formal Sector in Kenya

“…Therefore a person is debt knowledgeable when he understands the basic concepts of money management and specifically debt finance (Huston,[14]; Loke & Hageman, [18]). According to ILO [15] formal sector refers to the section of the economy which provided jobs that are subject to national legislation, income tax, social protection or entitlement to benefits such as annual leave, group life and medical insurance, pension and gratuity.…”