Measuring responsible financial consumption behaviour

Abstract

Sound consumption decisions determine individuals’ well‐being; responsible financial consumption behaviour (RFCB) affects not only their finances but also their societal status and emotional state. The failure to manage personal finances responsibly may result in serious long‐term consequences for individuals and society overall. In order to evaluate the concept of RFCB, this study combines two established theoretical frameworks—the family management system and the theory of planned behaviour. The paper investigates the relationships among RFCB, responsible financial attitudes, financial literacy and behavioural control. Its theoretical model is tested on a random sample of 494 respondents and analysed using PLS‐SEM. The results confirm the formation of responsible consumption behaviour by six formative elements: self‐control in spending, planning for the future, seeking information, education, rational decision‐making and solvency. The findings also indicate that all three focal variables have a direct effect on RFCB.

The power of materialism among young adults: exploring the effects of values on impulsiveness and responsible financial behavior

“…It can also be understood within the definition of utilitarian behavior that entails primarily rational consumer decisions (Rucker and Galinsky, 2009). It comprises a diverse set of actions related to personal finance, namely, spending self-control, spending self-predictions, seeking consumer information, taking part in consumer education, rational decision-making and solvency (Barbić et al , 2019). To be built, one needs to have relevant financial knowledge, skills and opportunities (Johnson and Sherraden, 2007).…”

“…The effect of materialism on responsible financial behavior, therefore lies in the recognition that persons who are prone to materialism are most likely to immediately shift to self-gratification, skipping the previous layers. Therefore, these persons are also prone to make ineffective financial decisions and vulnerable to irresponsible financial behavior (Barbić et al , 2019). Building on that reasoning, a wealth of research linked it to a negative outcome such as compulsive buying (Burroughs and Rindfleisch, 2002; Nga et al , 2011; Phau and Woo, 2008), as well as lower levels of well- being (Ahuvia and Wong, 2002), tendency to indebtedness (Watson, 2003; Garðarsdottir and Dittmar, 2012; de Matos et al , 2019) and usage of money for increasing of personal value (Christopher et al , 2004).…”

An assessment of the effects of mental accounting on overspending behaviour: An empirical study

“…Schooley and Worden (2008) extend the wealth effect by showing that spending depends not only on the amount of wealth, but also on the types of assets that make up this wealth. Many researchers utilise Survey of Consumer Finances data set to explore household finances and debt issues (Crook, 2001; Lee & Kim, 2016a), saving behaviour (Fisher & Montalto, 2011), retirement savings (Lee & Kim, 2016b; Yao & Cheng, 2017), emergency fund savings (Bhargava & Lown, 2006), the use of mortgages and credit cards (Donou‐Adonsou & Basnet, 2019; Lee & Kim, 2018), borrowing behaviour (Yazdanparas & Alhenawi, 2017) and spending behaviour (Barbić, Lučić, & Chen, 2019; Basnet & Donou‐Adonsou, 2016; Chalise & Anong, 2017). The purpose of this study is to explore how overspending behaviour is affected by mental accounts of wealth, savings goals and expense forecasting.…”

Let your past define your future? How recalling successful financial experiences can increase beliefs of self‐efficacy in financial planning

“…Indeed, consumers with higher financial self‐efficacy are more disciplined and long‐term‐oriented (Chen et al ., 2001), more responsible in their financial behavior (Hadar et al ., 2013), and tend to experience more positive financial outcomes (Hoffmann and McNair, 2019). While overconfidence in one's ability to manage one's personal finances is risky, as it can result in experiencing more negative financial outcomes (Balasubramnian and Sargent, 2020; Kim et al ., 2020), prior work argues that the perceived ability to manage one's finances has to be sufficiently developed for people to get hold of their finances (Barbić et al ., 2019), and explicitly calls for policy makers to act on consumers' financial self‐efficacy in order to stimulate sound financial behavior (Wiener and Doescher, 2008).…”