In the fall 2014, two Ph.D. candidates successfully defended their dissertations.
Anita K. Dale’s work was on “The Association of Culture with Financial Satisfaction.” She recently retired as an executive with Valent USA Corporation in Indianapolis and is pursuing faculty opportunities in personal financial planning.
Jeffrey Nelson, CFA, CFP®, presented “Three Essays on Personal Financial Difficulties of Military Members.” He is senior vice president and portfolio manager at Broadway Bank in San Antonio.
Anita Dale: Culture and financial satisfaction
Dale explained that her dissertation topic evolved from her interest in understanding “what gets in the way of people doing what they know they should do with respect to their personal finances.” She added the role of religion, evaluated as a culture, in personal financial decision making.
“My initial plan was to gather proprietary data. As my topic evolved, I eventually reached a point where I stepped back and asked whether or not there was a public data set that might include data I could use to evaluate my subject,” she said. She eventually used one of the oldest public datasets, the General Social Survey (GSS), which is not typically used in the financial planning field.
The GSS has a rich history in tracking social trends in the U.S. The challenge with the dataset was the weakness of the financial measures. The benefit of large datasets such as the General Social Survey is the abundance of data, and the negative is that there is not an opportunity to add specific interest items to the questionnaire.
Thus, there may be weaknesses in how deeply some subjects of interest are covered. In this case, the dependent variable of Dale’s study, financial satisfaction, was measured with a single Likert-type question instead of the preferred scale.
Dale’s dissertation focused on three cultures: geography, socioeconomic status and religion. One of the challenges was how to measure each culture, she said.
Kristy Archuleta, associate professor of personal financial planning, served as committee chair. Serving on her doctoral committee were researchers with expertise within each area. Margaret Fitzgerald, professor at North Dakota State University and a member of the Great Plains IDEA program, furnished input on the geographical culture. Christy M. Craft, associate professor in the College of Education at K-State, assisted with comparing religions. Cliff Robb, associate professor of personal financial planning at K-State, offered input into socioeconomic status measures. Matthew R. Sanderson, associate professor in the Department of Sociology, Anthropology and Social Work, provided insight into statistical methodologies and the role of culture.
The results of the study found positive associations between the geographic characteristics of home ownership and living in a single family home and financial satisfaction. Income, a characteristic of socioeconomic status, was positively associated with financial satisfaction and the religion characteristic of prayer and frequency of attendance at religious services was positively associated with financial satisfaction.
When considered in a single analysis, because individuals typically experience multiple cultures like geography, socioeconomic status and religion simultaneously, two variables – income and frequency of religious service attendance – remained positively associated with financial satisfaction along with the control variable of marital status (being married). Frequency of religious service attendance was found to moderate the financial satisfaction of individuals in the Eastern and Western Regions of the U.S.
Jeffrey Nelson: Financial Difficulties in Military Members
Nelson successfully defended his dissertation titled: “Three Essays on Personal Financial Difficulties of Military Members.”
This three essay dissertation examined questions related to personal financial difficulties of military members with the aim of suggesting the most effective focal points for those involved in development of policy or programs or working directly with military members on improving their personal financial condition.
The introduction described the nature of the problem, the level of attention it has received within the civilian and military leadership structure, and generally what has been done to address it before presenting an outline of the chapters which follow.
The first essay relied on theoretical guidance from stress and coping theory to examine determinants of a military member’s choice of problem-focused over emotion-focused coping strategies. The study used primary data collected from a sample of soldiers (n = 688) at a large Midwestern military installation. Its results indicated that military members with an internal locus of control and those who performed positive financial behaviors in response to a financial stressor reported lower levels of financial stress.
Taking its theoretical guidance from the theory of planned behavior, the second essay examined the relationship of the behavioral antecedents of attitude toward behavior, subjective beliefs, and perceived behavioral control with behaviors related to establishing and maintaining an adequate emergency fund and maintaining positive cash flow, the term used for keeping spending at levels below income over time.
The study analyzed primary data from a sample of soldiers at a large Midwestern military installation (n = 93). Of the 11 models analyzed, most were statistically significant, though, individually, the behavioral antecedents themselves did not yield statistical significance as often.
Although fewer definitive findings emerged from the cash flow group of models, results of the emergency fund group indicated that attitude toward behavior and perceived behavioral control are positively influential on behaviors related to maintaining an emergency fund.
The third essay detailed a study that tested the theoretical assumption that better informed consumers make better financial choices.
The study examined self-assessed financial knowledge, a self-assessed measure of confidence in day-to-day personal financial management termed financial confidence, and objectively measured financial knowledge as potential determinants of certain positive and negative financial behaviors. The positive behaviors were maintenance of positive cash flow and an adequate emergency fund. The negative behaviors were engaging in high-cost borrowing through auto title lenders, payday lenders, pawn shops, and rent-to-own stores, collectively termed alternative financial services (AFS).
The study analyzed secondary data from a sample of military members collected by the 2012 National Financial Capability Study which yielded a set of 949 responses useable for the study described in this chapter.
Subjective knowledge was found to be associated with emergency fund maintenance, but not positive cash flow, while objective financial knowledge and financial confidence were found to be positively associated with positive cash flow, but not emergency fund maintenance.
Females and those with higher incomes were found to be more likely to maintain positive cash flow, while those with three or more dependent children and those having experienced a recent income shock were less likely to do so.
Females, members with graduate degrees, and members with a higher investing risk tolerance were more likely to maintain emergency funds, though members with two or more children and those having experienced a recent income shock were less likely to do so. Subjective financial knowledge was found to be positively related to AFS use, while objective financial knowledge and financial confidence were found to be negatively associated with AFS use. Members with more dependent children and those having experienced recent income shocks were more likely to have used AFS, while those with higher incomes were less likely to have done so.
The conclusion summarizes implications and suggests directions for future research. It re-emphasizes the contributions of the essays to personal finance literature pertaining to military members and its importance for policy makers, military leaders, and anyone involved in developing or administering personal financial improvement programs for the benefit of military members.
Co-major professors were Sonya L. Britt, CFP®, associate professor and personal financial planning program director, and Martin C. Seay, CFP®, assistant professor of personal financial planning.