The effects of economic rationality, currency perception, and money attitudes of working youth on financial management competencies

Abstract

The prominence of past financial activities in the future planning of economic units is quite high. Numerous environmental factors play a role in the financial management skills of households, which are the economy's building blocks. Individuals acquire economic competencies by experiencing, understanding, and observing these environmental factors. Particularly, individuals within the age range of 8-17 assume importance in acquiring these competencies. In the study to determine the impact of economic rationality, currency perception, and money attitudes of 132 young participants within the age group of 8-17 working in Fatih Industry, Büyük Industry, Bağkur Industry, Akçaabat Industry, Arsin Organized Industry, and Yomra Furniture Industry sites in Trabzon, on financial management competencies. As a result of the analysis, it was observed that the economic rationality, currency perception, and money attitudes of employed young individuals impact their financial management competencies.

Keywords

• Currency perception
• Money attitudes
• Economic rationality
• Young workers
• Financial management

References

1. Angulo‐Ruiz, F. and Pergelova, A. (2015). An empowerment model of youth financial behavior. Journal of Consumer Affairs, 49(3), 550-575.
2. Ansong, A. and Gyensare, M. A. (2012). Determinants of university working-students’ financial literacy at the University of Cape Coast, Ghana. International Journal of Business and Management, 7(9), 126.
3. Arnett, J.J. (2000). Emerging adulthood: a theory of development from the late teens through the twenties. American Psychologist, 55, 469– 480
4. Atkinson, A., Stephen M., Sharon C.and Elaine K. (2007). Levels of Financial Capability in the UK. SSRN Scholarly Paper ID 959519, Rochester, NY: Social Science Research Network. http://papers.ssrn.com/abstract=959519.
5. Bačová, V., Dudeková, K., Kostovičová, L. andBaláž, V. (2017). Financial planning for retirement in young adults: Interaction of professional experience, knowledge, and beliefs. StudiaPsychologica, 59(2), 84.
6. Banks, J., Carvalho, L. S. and Perez-Arce, F. (2019). Education, decision making, and economic rationality. Review of Economics and Statistics, 101(3), 428-441.
7. Bartley, J. (2011). What drives financial literacy among the young?. Undergraduate Economic Review, 7(1), 23.
8. Başgil, A. F. (1942). Main Organization Law, Istanbul: İ. U. H. F. Student Society Publications, Volume II.

9. Bauermeister, J. A., Zimmerman, M., Gee, G. C., Caldwell, C. and Xue, Y. (2009). Work and sexual trajectories among African American youth. Journal of Sex Research, 46(4), 290-300.
10. Bolay, S.H. (1990). Dictionary of PhilosophicalDoctrines, Ankara: Akçağ Publications, Revised 5. b.
11. Burgoyne, C.B., Routh, D.A. and Ellis, AM. (1999). The Transition to the Euro: Some Perspectives from Economic Psychology. Journal of Consumer Policy, 22, 91–116.
12. Chen, H. and Volpe, R. P. (1998). An analysis of personal financial literacy among college students. Financial services review, 7(2), 107-128. http://dx.doi.org/10.1016/S1057-0810(99)80006-7 (December 23, 2011).
13. Choi, S., Shachar K., Wieland M. and Dan S. (2014). Who Is (More) Rational? American Economic Review 104(6): 1518-1550.
14. Cui, X., Xiao, J. J., Yi, J., Porto, N.and Cai, Y. (2019). Impact of family income in early life on the financial independence of young adults: Evidence from a matched panel data. International Journal of Consumer Studies, 43(6), 514–527. https://doi.org/10.1111/ijcs.12536
15. Cunnien, K. A., Martin Rogers, N. and Mortimer, J. T. (2009). Adolescent work experience and self‐efficacy. International Journal of Sociology and Social Policy.
16. Cutler, D., M. and Lleras-Muney. A. (2008). Education and Health: Evaluating theories and evidence in Making Americans Healthier: Social and Economics Policy as Health Policy, Robert F. Schoeni, James S. House, George Kaplan and Harold Pollack, editors, New York: Russell Sage Foundation.
17. Danes, S. M., Huddleston-Casas, C.and Boyce, L. (1999). Financial Planning Curriculum for Teens: Impact Evaluation. Journal of Financial Counseling and Planning, 10 (1): 25–37
18. Donohue, B., Conway, D., Beisecker, M., Murphy, H., Farley, A., Waite, M.and Shorty, C. (2005). Financial management and job social skills training components in a summer business institute: A controlled evaluation in high achieving predominantly ethnic minority youth. Behavior Modification, 29(4), 653-676.
19. Drever, A. I., Odders‐White, E., Kalish, C. W., Else‐Quest, N. M., Hoagland, E. M. and Nelms, E. N. (2015). Foundations of financial well‐being: Insights into the role of executive function, financial socialization, and experience‐based learning in childhood and youth. Journal of Consumer Affairs, 49(1), 13-38.
20. Durvasula. S. and Lysonski. S. (2007). Money attitudes, materialism, and achievement vanity: an investigation of young Chinese consumers’ perceptions.
21. Edwards, R., Allen, M. A. and Hayhoe, C. R. (2007). Financial attitudes and family communication about students’ finances: the role of sex differences. Communication Reports, 20(2), 90–100
22. Falahati, L., Paim, L., Ismail, M., Haron, S. A. and Masud, J. (2011). Assessment of university students’ financial management skills and educational needs. African Journal of Business Management, 5(15), 6085-6091.
23. Field, A. (2013). Discovering Statistics Using IBM SPSS Statistics (4th ed.). London: Sage.
24. Fitzpatrick, C., Gagne, K. H., Jones, R., Lobley, J. and Phelps, L. (2005). Life skills development in youth: Impact research in action. Learning, 72, 77.
25. Friedline, T. and West, S. (2016). Financial education is not enough: Millennialsmayneedfnancialcapabilitytodemonstratehealthierfnancialbehaviors. Journal of Family and Economic Issues, 37(4), 649–671. https://doi.org/10.1007/s10834-015-9475-y
26. Frijns, B., Gilbert, A. and Tourani-Rad, A. (2014). Learning by doing: The role of financial experience in financial literacy. Journal of Public Policy, 34(1), 123-154.
27. Galligan, A. M. (1995). Service learning and experiential education. In Fried and Associates (Eds.) Shifting paradigms in student affairs: Culture, context, teaching, and learning, 189-207. Lanham, MD: University Press of America, Inc.
28. Garman, E. T. and Forgue, R. (2011). Personal finance. Cengage Learning.
29. Gregory, J. (2002). Principles of experiential education. In Jarvis, P. (Ed.) The theory and practice of teaching, 94-107. Sterling, VA: Stylus Publishing, Inc.
30. Hair, J. F., Ringle, C. M. and Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139-152.
31. Hamilton, S. F. andCrouter, A. C. (1980). Work and growth: A review of research on the impact of work experience on adolescent development. Journal of Youth and Adolescence, 9(4), 323-338.
32. Hanley, A. and Wilhelm, M. S. (1992). Compulsive buying: An exploration into self-esteem and money attitudes. Journal of Economic Psychology, 13(1), 5–18. https://doi.org/10.1016/0167- 4870(92)90049-D.
33. Harris, I. M., Denise, P. and Thomas, R.M. (1989). Experiential education for community development. In Denise, P. S and Harris, I.M. (Eds.) Experiential education for community development, 1-18. NY: Greenwood Press.
34. Hilgert, M., Hogarth, J. and Beverly, S. (2003). Household financial management: the connection between knowledge and behavior. Federal Reserve Bulletin, July, 309–322
35. Jones, B. andIredale, N. (2006). Developing an entrepreneurial life skills summer school. Innovations in education and teaching international, 43(3), 233-244.
36. Jorgensen, B. L. and Savla, J. (2010). Financial literacy of young adults: The importance of parental socialization. Family Relations, 59, 465-478. doi:10.1111/j.1741- 3729.2010.00616.x
37. Juen, T. T., Sabri, M. F., Othman, M. A., Abdul Rahim, H. and Muhammad Arif, A. M. (2013). The Influence of Financial Knowledge, Financial Practices and Self-Esteem on Money Management Skills of Young Adults. Malaysian Journal of Youth Studies, 9, 23-37.
38. Kalayci, S. (2018). SPSS Applied Multivariate Statistical Techniques. Ankara: Dynamic Academy Publications. Karasar, N. (1994). Bilimsel araştırma yöntemi. Ankara: 3A Araştırma Eğitim Danışmanlık Ltd.
39. Kolb, D. A. (1984). Experiential learning: Experience as the source of learning and development. New Jersey: Prentice-Hall. Kolb, D. A. (2014). Experiential learning: Experience as the source of learning and development. FT press.
40. Korkmazer, F., Ekingen, E. and Yıldız, A. (2016). TheEffect of Psychological Capital on Employee Performance: A Study on Healthcare Professionals, Hacettepe Journal of Health Administration, 19(3), 271-281.
41. Kotlikoff, L. J. and Bernheim, B. D. (2001). Household financial planning and financial literacy. In J. Laurence, and Kotlikoff. (Eds.), Essays on saving, bequests, altruism, and life-cycle planning ,427–478.
42. LeBaron, A. B., Runyan, S. D., Jorgensen, B. L., Marks, L. D., Li, X. and Hill, E. J. (2019). Practice makes perfect: Experiential learning as a method for financial socialization. Journal of Family Issues, 40(4), 435-463.
43. LeBaron, A. B., Holmes, E. K., Jorgensen, B. L. and Bean, R. A. (2020). Parental financial education during childhood and financial behaviors of emerging adults. Journal of Financial Counseling and Planning.
44. Lee, J. M., Lee, J. and Kim, K. T. (2020). Consumer financial well-being: Knowledge is not enough. Journal of Family and Economic Issues, 41(2), 218-228.
45. Lü, R. and Hao, F. (2022). The Development of Rationality in Economics. International Research in Economics and Finance, 6(1), 1.
46. McCormick, M. H. (2009). The effectiveness of youth financial education: A review of the literature. Journal of Financial Counselingand Planning, 20(1), 70–83.
47. Mendola, A. (2020). Financial Decision-Making Capacity and Patient-Centered Discharge. The Journal of Clinical Ethics, 31(2), 178–183.
48. Moffitt, T E., Louise A., Daniel B., Nigel D., Robert J. H., HonaLee H., Renate H., Richie P., Brent W. R., Stephan R., Malcom R. S., Avshalom C.and James J. H. (2011). A Gradient of Childhood Self-Control Predicts Health, Wealth, and Public Safety. Proceedings of the National Academy of Sciences, 108 (7): 2693–2698.
49. Montoya, D. Y. and Scott, M. L. (2013). The effect of lifestyle-based depletion on teen Consumer behavior. Journal of Public Policy and Marketing, 32, 82-96
50. Mortimer, J. T. (1994). Work Experience in Adolescence. Journal of Vocational Education Research, 19(1), 39-70.
51. Norvilitis, J. M., Merwin, M. M., Osberg, T. M., Roehling, P. V., Young, P. and Kamas, M. M. (2006). Personality factors, money attitudes, financial knowledge, and credit-card debt in college students. Journal of Applied Social Psychology, 36(6), 1395–1413
52. Oseifuah, E. K. (2010). Financial literacy and youth entrepreneurship in South Africa. African journal of Economic and management studies.
53. Prince, M. (1991). Gender and money attitudes of young adults. gender and consumer behavior. In J. A. Costa (Ed.), Conference Proceedings,284–291. Valdosta, GA: Association for Consumer Research.
54. Shim, S., Barber, B. L., Card, N. A., Xiao, J. J. and Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work, and education. Journal of Youth and Adolescence, 39(12), 1457-1470.
55. Tang. T. L. P. (1992). The meaning of money revisited, Consequence of Organizational Behavior, vol. 2, no. 13, pp. 197-202
56. Tang, N. and Peter, P. C. (2015). Financial knowledge acquisition among the young: The role of financial education, financial experience, and parents’ financial experience. Financial Services Review, 24(2), 119.
57. Tekin, H. (1993). Measurement and evaluation in education. Ankara: Judicial Publishing House. Tezbaşaran, A. A. (1996). Likert type scale development guide. Ankara: TPD Publications
58. Tham, K. W., Dastane, O., Johari, Z. and Ismail, N. B. (2019). Perceived risk factors affecting consumers’ online shopping behaviour. Journal of Asian Finance, Economics and Business, 6(4), 246-260. https://doi.org/10.13106/jafeb.2019.vol6. no4.249
59. Titman, S. J., Keown, A. J. and Martin, J. H. (2017). Financial Management (13th ed.). Harlow, UK: Pearson
60. Torun, I. (2008). Rationalization of the Economic Mentality According to Max Weber. Journal of Social EconomicResearch, 8(15), 14-34.
61. Tyszka, T. and Przybyszewski, K. (2006). Cognitive and emotional factors affecting currency perception. Journal of economic psychology, 27(4), 518-530.
62. Von Neumann, J. and Morgenstern, O. (1974). Theory of Games and Economic Behavior, Princeton, N. J.
63. Wahab, R., Sabri, M. F. and Ramli, N. N. (2016). Money literacy, shopping and purchasing patterns among primary school students in Malaysia. Journal of Education and Human Development, 5(1), 146-162.
64. Ward, S. (1974). Consumer socialization. Journal of Consumer Research, 1(2), 1–16. doi:10.1086/208584
65. Xiao, J. J., Chatterjee, S. and Kim, J. (2014). Factors associated with financial independence of young adults: Financial independence of young adults. International Journal of Consumer Studies, 38(4), 394–403. https://doi.org/10.1111/ijcs.12106