CHAPTER V. PRESENTATION OF RESULTS

CHAPTER V. PRESENTATION OF RESULTS This study is designed to develop a conceptual model that describes the relationship between personal financial wellness and worker job productivity. A part of the model was tested with a randomly selected sample of white collar clerical workers in a employer in mid-eastern state (N=474). A mail survey was conducted during January, February, and March 1998. This chapter presents the data and research findings. This chapter includes a discussion of the (a) return rate, (b) demographic characteristics of the sample, (c) personal financial wellness profile of the sample, (d) personal financial wellness changes with demographic characteristics, (e) personal financial wellness changes with financial stressors, (f) the relationship between personal financial wellness and financial stress level, (g) worker job productivity profile of the sample, (h) relationship between personal financial wellness and worker job productivity, (i) relationship between financial stress and worker job productivity, and (j) desired financial education programs of the sample. Return Rate Among the 474 questionnaires, 27 were returned as undeliverable because of termination of employment, incorrect address, or death. Therefore, the total sample size was reduced to 447. A total of 288 questionnaires were returned by the cut off date. This number represents a total return rate of 64.4%. Seventeen of the returned questionnaires were unusable due to missing information. Therefore, the usable return rate was 60.6%. Even though 271 usable questionnaires were returned, the total number of responses for some questionnaire items were not equal to 271 due to the missing information. Demographic Characteristics of the Sample This section presents the demographic characteristics of the respondents. Demographic characteristics include gender, marital status, education, ethnicity, age, household income, 78

So-hyun Joo Chapter V. Results 79 number of financial dependents, housing tenure, and length of employment. Table 5 shows these characteristics of the respondents. The majority of the respondents were female (96.3%) and only 3.7% were male. It can be seen that over two-thirds of the respondents were either married or lived with significant others (69.9% not shown in Table 5), and the remaining respondents were never married (7.8%), separated (3.0%), divorced (16.4%) or widowed (3.0%). As a group, the respondents were moderately educated. By combining categories, over twothirds (74.1%, not shown in Table 5) of the respondents had some education beyond high school. The largest group (31.9%) had some college education. The second largest group (25.9%) were high school graduates, followed by those having a bachelor s degree (17.0%). A relatively small group of respondents received associate s (13.7%), trade and vocational training (8.5%), or graduate or professional (3.0%) degrees. Almost all of the respondents were white (91.9%) while less than one-tenth (8.1%) were other ethnic groups. The age was asked as an open-ended question. Respondents were asked to report their age in years. Over one-third (35.7%) of the respondents were in their forties. About a quarter (24.1%) of the respondents were between 30 to 39 years old and about onequarter (23.3%) of the respondents were between the age of 50 to 59. The percentage of respondents who were in their twenties was 11.5%, and a small number of respondents were in their sixties (5.4%). The mean age was calculated to be 43.15 years old. Compared to the mean age of the research population (N=948, M=43.2), the sample could represent the population. The respondents reported moderate income as a group. By combining categories, about half (49.1%, not shown in Table 5) of the respondents had household incomes less than $40,000. Less than one-tenth (9.2%, combining categories not shown in Table 5) of the respondents

So-hyun Joo Chapter V. Results 80 Table 5 Demographic Characteristics of the Respondents (N=271) Demographic Characteristics n % a Gender (N=271) Male 10 Female Marital Status Never Married Not married But Living With Significant Other Married Separated Divorced Remarried After Divorce Remarried After Spouse s Death Widowed Education High School Trade/Vocational Training Associate s Some College Bachelors Graduate or Professional Ethnicity White Black Hispanic Native American Asian Other Age in Years 20 to 29 30 to 39 40 to 49 50 to 59 60 to 69 261 (N b =269) 21 12 151 8 44 24 1 8 (N b =270) 70 23 37 86 46 8 (N=271) 249 11 4 3 3 1 (N b =261) 30 63 93 61 14 3.7 96.3 7.8 4.5 56.1 3.0 16.4 8.9.4 3.0 25.9 8.5 13.7 31.9 17.0 3.0 91.9 4.1 1.5 1.1 1.1.4 11.5 24.1 35.7 23.3 5.4 a Percentages may not add to 100 due to rounding. b Number of respondents may not add to 271 due to non-response or non-applicability of the question.

So-hyun Joo Chapter V. Results 81 Table 5. (Continued) Demographic Characteristics n % a Household Income Less Than $20,000 $ 20,001 - $ 30,000 $ 30,001 - $ 40,000 $ 40,001 - $ 50,000 $ 50,001 - $ 60,000 $ 60,001 - $ 70,000 $ 70,001 - $ 80,000 $ 80,001 - $ 90,000 $ 90,001 - $ 100,000 More Than $ 100,000 (N=271) 23 65 45 46 39 28 11 7 5 2 Number of Financial Dependents 1 2 3 4 5 More Than 6 Housing Tenure Own Rent Live With Relative or Friend Length of employment 1 to 2 years 3 to 5 years 6 to 9 years 10 to 14 years 15 to 19 years 20 or more (N b =267) 87 83 48 45 3 1 (N b =270) 206 54 10 (N=271) 37 36 41 56 40 61 8.5 24.0 16.6 17.0 14.4 10.3 4.1 2.6 1.8.7 32.0 32.0 17.8 17.0.8.4 76.4 20.0 3.7 13.7 13.3 15.1 20.7 14.8 22.5 a Percentages may not add to 100 due to rounding. b Number of respondents may not add to 271 due to non-response or non-applicability of the question.

So-hyun Joo Chapter V. Results 82 reported above $70,000 household income. The largest group had a household income of $20,001 to $30,000 (24.0%) followed by the next largest group having household income of $40,000 to $50,000 (17.0%). The average number of financial dependents was 2.24. About one-third (32.6%) of the respondents had one financial dependent (including self), and another one-third (31.1%) of the respondents had two financial dependents. About one-fifth (18.0%) of the respondents had three financial dependents, and 16.9% of the respondents had four financial dependents. About three-quarters (76.3%) of the respondents were homeowners, and one-fifth (20.0%) were renters. The length of employment at the current employer varied. Over one-fifth (22.5%) of the respondents were with the employer over 20 years, and another one-fifth (20.7%) of the respondents had 10 to 14 years of employment with the current employer. Over ten percent (13.3%) of the respondents had 3 to 5 years of employment. The number of respondents who had 1 to 2 years of employment, 6 to 9 years of employment, and 15 to 19 years of employment were 13.7%, 15.1%, and 14.8% respectively. By combining categories, over one-half (58.0%, not shown in Table 5) of the respondents had more than 10 years of employment with the current employer. Representativeness of the Sample In an effort to ascertain the generalizability of the findings of this study to broader populations, a comparison was made of characteristics of the sample and those of households in the state where the employer locates and the United States. Results, shown in Table 6, suggest that the sample may represent the population. The mean age of the respondents and the population was almost same. The distributions of the length of employment of the respondents and the population were similar. The population had average 11.22 years of employment with the current employer. In addition, the gender distribution of the respondents was similar to the nationwide data for those who hold same job titles. The ethnicity distribution of the

So-hyun Joo Chapter V. Results 83 Table 6 Comparison of Sample Characteristics with Those of Broader Population Occupation Specific Respondents Population United States Demographic Characteristics Gender Male Female 3.7% 96.3% (1992) a 5.0% 95.0% Age (Mean age) 43.15 43.2 Ethnicity White Black Other 91.9% 4.1% 4.1% (1992) a 93.8% 3.02% 3.18% Length of Employment 1 to 2 years 3 to 5 years 6 to 9 years 10 to 14 years 15 to 19 years 20 or more years General Demographic Characteristics Housing Tenure Own Other Household Income Marital Status (Percentage of Adult Population Married) 13.7% 13.3% 15.1% 20.7% 14.8% 22.5% 13.9% 14.6% 18.6% 20.8% 13.2% 18.9% Respondents State United States 76.4% 23.7% Mean c $38,000 (1996) b 73.6% 26.4% Median(1992) d $38,223 Median(1996) e $35,492 65.4% 61.2% a U.S. Department of Commerce. (1992). 1990 Census of Population: Social & Economic Characteristics - United States. Washington, DC: U.S. Government Printing Office. b Virginia Statistical Abstract. (1996). Charlottesville, VA: Weldon Cooper Center for Public Service. University of Virginia. c The mean was calculated from the categorical mean of 3.81. The category 3 was the income range $30, 001 to $40,000. d U.S. Department of Commerce. (1992). 1990 Census of Population: Social & Economic Characteristics - Virginia. Washington, DC: U.S. Government Printing Office. e Bureau of Census. (1996). Income 1996. [Data posted on World Wide Web]. Retrieved April 11, 1998 from the World Wide Web, http://www.census.gov/hhes/income/income96/in96sum.html

So-hyun Joo Chapter V. Results 84 respondents was also similar to that of national data. Moreover, the three general demographic characteristics shown in Table 6 suggests that the sample may represent a broader population. However, in terms of the education level, the respondents, as a group, were slightly more educated than the general population. Research Question 1: Personal Financial Wellness Profiles of the Sample The first research question was the following: What is the personal financial wellness profile of workers, especially in the areas of subjective perception of personal finance, behavioral assessment of personal finance, objective scales of personal financial wellness, and satisfaction with personal financial situations? This section describes the personal financial wellness profile in the four areas of measurement. To describe the personal financial wellness of the sample, descriptive analysis was used. Subjective Perception of Personal Finance Subjective perception of personal finance was measured with eight items in five areas: cash management, credit management, income adequacy, personal financial management, and consumer shopping skills. The respondents were asked to rank the eight items on a four-point scale ranging from strongly agree to strongly disagree. Results are shown in Table 7. Cash Management. The cash management item is the statement of I am satisfied with the money that I am able to save. About three-quarters (74.7%, combining categories of strongly disagree and tend to disagree) of the respondents reported that they are not satisfied with the amount of money that they are able to save. Only 3.0% of the respondents strongly agreed that they are satisfied with their ability of save.

So-hyun Joo Chapter V. Results 85 Table 7 Percentage Responses to Subjective Perception of Personal Finance Subjective Perception of Personal Finance: Perception of how respondents felt about their financial situation utilizing the eight 4-point scale questions Statement SA(1) TA(2) TD(3) SD(4) a N b M SD Cash Management I am satisfied with the amount of money that I am able to save. 3.0 22.3 31.2 43.5 269 3.15.87 Credit Management I worry about how much money I owe. 23.3 31.1 27.8 17.8 270 2.40 1.03 I would have trouble borrowing $2,000 cash if I needed it. 12.2 11.1 25.8 50.9 271 3.15 1.04 Income Adequacy I have difficulty living on my income. 17.3 38.4 28.8 15.5 271 2.42.95 I worry about being able to pay monthly living expenses. Personal Financial Management When I think of my financial situation, I am optimistic about the future. I think I will have enough money to live comfortably throughout retirement. 15.9 28.1 33.0 23.0 270 2.63 1.00 8.2 46.6 31.7 13.4 268 2.50.83 3.3 37.5 35.3 23.8 269 2.79.84 Consumer Shopping Skills I am knowledgeable about consumer protection laws and regulations. 5.5 36.2 37.6 20.7 271 2.73.85 a SA: Strongly Agree, TA: Tend to Agree, TD: Tend to Disagree, SD: Strongly Disagree b Number of responses may not add to 271 due to non-response.

So-hyun Joo Chapter V. Results 86 Credit Management. Credit management was measured with the two items of I worry about how much money I owe, and I would have trouble borrowing $2,000 cash if I needed it. Over one-half (54.4%, combined SA and TA, not shown in Table 7) of the respondents were worried about their debts, and less than one-fifth (17.8%) of the respondents were not worried about their debts. More than one-half (50.9%) of the respondents reported that they would not have any trouble with borrowing $2,000 cash and about one-fourth (23.3%, combining SA and TA in Table 7) reported they would have trouble borrowing $2,000 cash. Income Adequacy. The items of I have difficulty living on my income, and I worry about being able to pay monthly living expenses measured subject perception with income adequacy. Those who strongly agreed with the statement that they have difficulty living on their income were 17.3%, and those who tended to agree with that statement were 38.4%. Combining these two categories, over 50% of the respondents had difficulty living on their income. On the other hand, less than 50% of the respondents (44.0%, combined SA and TA in Table 7) were worried about managing their monthly expenses. This percentage reflects that even though they have financial problems with inadequate income, there are some people who do not worry about their financial situation. The percentage (23.0%) of the respondents who strongly disagree with the statement I worry about being able to pay monthly living expenses was more than that (15.5%) of I have difficulty living on my income. Personal Financial Management. Personal financial management was measured with two statements about subjective perception of future financial situation. The two statements were assumed to reflect personal financial management skills. More than half (54.8%, combined SA and TA in Table 7) of the respondents were optimistic about their financial future, however less than half (40.8%, combined SA and TA in Table 7) of the respondents thought that they would have enough money for retirement. While 13.4% of the respondents strongly disagreed with the optimism of their financial future, 22.8% of the respondents strongly disagreed with their financial retirement preparedness.

So-hyun Joo Chapter V. Results 87 Consumer Shopping Skills. Only 5.5% of the respondents were strongly self-assured with their knowledge of consumer protection laws and regulations. Over one-fifth (20.7%) of the respondents thought they were not knowledgeable about consumer protection laws and regulations at all. By combining categories, more than one-half (58.3%, combined TD and SD in Table 7) of the respondents were not knowledgeable consumers in the marketplace. The subjective perception index (FAT) was obtained by computing all of the eight items. The items of 1, 2, 3, and 8 of the questionnaire were reverse coded. As a scale, the eight items showed.8429 Cronbach alpha coefficients. (The correlation matrix of the items in Appendix H.) The principal component analysis of the eight items of subjective perception index showed two components of factors (Appendix H). The questionnaire items 1 through 7 fell into one factor and the 8th question composed one factor by itself. The reliability coefficient of the seven items was.8766. The 8 th item of the questionnaire (I am knowledgeable about consumer protection laws and regulations) was included to measure consumer shopping skills. And conceptually, the consumer shopping skills are important factors in personal financial wellness. In addition, the Cronbach alpha of.8429 shows an acceptable reliability of the index. Therefore, the subjective perception index was composed with all of the initial eight items of personal finance. The possible value of the subjective perception index ranges from 8 to 32. The respondents subjective perception index ranged from 9 to 31 (Table 8). The mean of subjective perception index of the respondents was 19.47 and the standard deviation as 5.15. The average of the subjective perception index was converted to a percentage score. The converted percentage average showed the personal financial wellness of the sample was below 50% (45.9%). Behavioral Assessment of Personal Finance The behavioral assessment of personal finance was measured with 12 items of cash management, credit management, income adequacy, personal financial management, and

Frequencies of Subjective Perception Index a Valid Cum So-hyun Joo Chapter V. Results 88 Table 8 Value Label Value Frequency Percent Percent Percent 9.00 4 1.5 1.5 1.5 10.00 4 1.5 1.5 3.0 11.00 6 2.2 2.3 5.3 12.00 9 3.3 3.4 8.7 13.00 11 4.1 4.2 12.9 14.00 18 6.6 6.8 19.8 15.00 12 4.4 4.6 24.3 16.00 17 6.3 6.5 30.8 17.00 24 8.9 9.1 39.9 18.00 15 5.5 5.7 45.6 19.00 12 4.4 4.6 50.2 20.00 18 6.6 6.8 57.0 21.00 22 8.1 8.4 65.4 22.00 13 4.8 4.9 70.3 23.00 14 5.2 5.3 75.7 24.00 13 4.8 4.9 80.6 25.00 13 4.8 4.9 85.6 26.00 9 3.3 3.4 89.0 27.00 12 4.4 4.6 93.5 28.00 8 3.0 3.0 96.6 29.00 5 1.8 1.9 98.5 30.00 1.4.4 98.9 31.00 3 1.1 1.1 100.0. 8 3.0 Missing ------- ------- ------- Total 271 100.0 100.0 Mean 19.468 Median 19.000 Mode 17.000 Std dev 5.148 Variance 26.502 Kurtosis -.771 S E Kurt.299 Skewness.100 S E Skew.150 Valid cases 263 Missing cases 8 a Perception of how respondents felt about their financial situation utilizing the sum of the eight 4-point scale questions

So-hyun Joo Chapter V. Results 89 consumer shopping skills. The respondents assessed their behaviors using four-point scales: never, sometimes, usually, and always. Table 9 presents the results. Cash Management. Almost one-fifth (18.1%) of the respondents never set money aside for savings, and over two-fifths (43.3%) of the respondents never set money aside for retirement savings (Table 9). On the other hand, three-tenths (30.0%) of the respondents always set money aside for retirement, and less than three-tenths (26.6%) of the respondents always set money aside for savings. In terms of spending, more than four-tenths (41.0%) of the respondents never spent more money than they had. By combining categories, however, more than half (58.9%) of the respondents reported sometimes, usually, or always spending more money than they had. Among those 58.9% of the respondents, 3.0% were always spending more money than they had. Credit Management. The credit management of the respondents was measured with two questions about handling credits cards. While almost one-fifth (17.2%) of the respondents paid credit card bills in full so that they avoided finance charges, almost two-fifths (37.1%) of the respondents never paid credit card bills in full. By combining categories (never, sometimes, and usually), over four-fifths (82.8%) of the respondents paid finance charges. Six-tenths of the respondents (61.4%) never reached the maximum limit on a credit card. By combining categories (sometimes, usually, and always), about two-fifths (38.6%) of the respondents reached the maximum credit limits. Less than one-tenth (7.9%) of the respondents always reached the credit limits. Income Adequacy. Income adequacy was measured with three items: I had to cut living expenses; I had to use a credit card because I ran out of cash; and I had financial troubles because I did not have enough money. About one-tenth (7.8%) of the respondents reported that they always had financial troubles because of inadequate income. A small percentage (3.4%) of

So-hyun Joo Chapter V. Results 90 Table 9 Percentage Responses to Behavioral Assessment of Personal Finance Behavioral Assessment: Assessment of respondents personal financial behaviors utilizing the twelve 4-point questions Statement N(1) S(2) U(3) A(4) a N b M SD Cash Management I set money aside for savings. 18.1 34.7 20.7 26.6 271 2.55 1.07 I set money aside for retirement. 43.3 15.2 11.5 30.0 270 2.28 1.29 I spent more money than I had. 41.0 44.0 11.9 3.0 268 1.77.77 Credit Management I paid credit card bills in full and avoided finance charges. I reached the maximum limit on a credit card. 37.1 28.1 17.6 17.2 267 2.15 1.10 61.4 23.2 7.5 7.9 267 1.62.93 Income Adequacy I had to cut living expenses. 33.0 48.8 13.0 5.2 270 1.90.81 I had to use a credit card because I 41.4 45.5 9.8 3.4 266 1.75.77 ran out of cash. I had financial troubles because I did not have enough money. 46.3 33.6 12.3 7.8 268 1.81.93 Personal Financial Management I had a plan to reach my financial goals. I had a weekly or monthly budget that I followed. Consumer Shopping Skills I comparison shopped at two or more stores for an expensive consumer product. I purchased something expensive that I wanted, but really did not need. 28.5 31.9 28.1 11.5 270 2.23.99 27.7 26.9 26.2 19.2 271 2.37 1.08 7.4 14.0 28.4 50.2 271 3.21.95 34.7 56.5 8.5.4 271 1.75.62 a N: Never, S: Sometimes, U: Usually, A: Always. b Number of responses may not add to 271 due to non-response.

So-hyun Joo Chapter V. Results 91 the respondents always had to use credit cards because they ran out of cash. A relatively small number of the respondents (5.2%) reported that they always had to cut living expenses. On the other hand, almost one-half (46.3%) of the respondents replied that they never had financial troubles because of income inadequacy. This figure was relatively high compared to the number of people who never cut their living expenses (33.0%) and those who never use a credit card because of running out of cash (41.4%). This finding suggests that some people do not think that cutting living expenses and withdrawing cash from credit cards are signs of financial troubles. Personal Financial Management. Personal financial management was measured by the practice of financial goal setting and budgeting (Table 9). Only about one-tenth (11.5%) of the respondents always utilized financial planning to achieve their financial goals. About threetenths of the respondents (28.1%) usually financially planned, and another three-tenths of the respondents (31.9%) sometimes utilized financial planning. Over one-quarter of the respondents (28.5%) never had a financial plan to reach their financial goals. In terms of budgeting, almost two-tenths (19.2%) of the respondents always had a weekly or monthly budget and almost three-tenths (27.7%) of the respondents never had a weekly or monthly budget. Over a quarter of the respondents (26.9%) sometimes followed their weekly or monthly budget, and another quarter of the respondents (26.2%) usually followed their budget. Consumer Shopping Skills. The items for measuring consumer shopping skills were comparison shopping and impulsive shopping (Table 9). Over one-half (50.2%) of the respondents always comparison shopped for an expensive consumer products, and about one-tenth (7.4%) of the respondents never comparison shopped. About three-tenths (28.4%) of the respondents usually shopped at two or more stores before they bought an expensive product. More than one-half of the respondents (56.5%) sometimes shopped impulsively and about one-third (34.7%) of the respondents never bought something impulsively. A very small number of the respondents (.4%) always purchased something expensive that they wanted but did not really need.

So-hyun Joo Chapter V. Results 92 The behavioral assessment of personal financial wellness was computed to an index (Table 10). All 12 items were included the behavioral assessment index (The correlation matrix of the scale is in Appendix I) and as a scale and the Cronbach alpha coefficient was.8062 (standardized alpha was.8073). The principal component analysis showed three factors (Appendix I). Factor 1 consisted of cash management, credit management, and income adequacy. The personal financial management items made up one factor and consumer shopping skills items made another factor. The reliability coefficient was.8563 for the first factor and.6501 for the second factor. The third factor s reliability coefficient was very low because the two items were weakly correlated. Excluding the items of consumer shopping skills, the 10 items reliability coefficient was.8286, which is a little higher than the original coefficient (.8062). Even though the reliability coefficient was higher, the new index of the 10 items was not a better predictor of personal financial wellness and worker job productivity. In addition, the original 12 items were developed based on previous research and the conceptualization of the five domains of personal finance. By including all 12 items in one index, personal financial wellness can be better measured. Therefore, all of the original 12 items were included in the behavioral assessment index. The possible value of the behavioral assessment index ranges from 12 to 48, and the index of the respondents ranged from 16 to 48. The mean score of the behavioral assessment index was 34.29, and the standard deviation was 6.50. The average score of the behavioral assessment index was also converted to the percentage score. The converted mean of the respondents was 61.9%. Objective Scales of Personal Financial Wellness Six objective scales of personal financial wellness were measured: solvency measure, amount of reserve fund, credit payment per month, installment loan payments per month (excluding home mortgage), amount of savings per month, and amount of voluntary supplementary tax-sheltered employer-sponsored retirement contributions per month.

Frequencies of Behavioral Assessment Index a Valid Cum So-hyun Joo Chapter V. Results 93 Table 10 Value Label Valid Cum Value Frequency Percent Percent Percent 16.00 1.4.4.4 17.00 1.4.4.8 19.00 1.4.4 1.1 20.00 3 1.1 1.1 2.3 21.00 5 1.8 1.9 4.2 22.00 1.4.4 4.6 23.00 5 1.8 1.9 6.5 24.00 3 1.1 1.1 7.6 25.00 3 1.1 1.1 8.8 26.00 7 2.6 2.7 11.5 27.00 7 2.6 2.7 14.1 28.00 9 3.3 3.4 17.6 29.00 11 4.1 4.2 21.8 30.00 8 3.0 3.1 24.8 31.00 19 7.0 7.3 32.1 32.00 20 7.4 7.6 39.7 33.00 19 7.0 7.3 46.9 34.00 17 6.3 6.5 53.4 35.00 12 4.4 4.6 58.0 36.00 13 4.8 5.0 63.0 37.00 11 4.1 4.2 67.2 38.00 15 5.5 5.7 72.9 39.00 11 4.1 4.2 77.1 40.00 10 3.7 3.8 80.9 41.00 8 3.0 3.1 84.0 42.00 11 4.1 4.2 88.2 43.00 12 4.4 4.6 92.7 44.00 4 1.5 1.5 94.3 45.00 6 2.2 2.3 96.6 46.00 5 1.8 1.9 98.5 47.00 2.7.8 99.2 48.00 2.7.8 100.0. 9 3.3 Missing ------- ------- ------- Total 271 100.0 100.0 Mean 34.286 Median 34.000 Mode 32.000 Std dev 6.495 Variance 42.190 Kurtosis -.275 S E Kurt.300 Skewness -.202 S E Skew.150 Valid cases 262 Missing cases 9 a Assessment of the personal financial behaviors of the respondents utilizing sum of the twelve 4-point questions

So-hyun Joo Chapter V. Results 94 Solvency Measure. The solvency was measured with the question, Suppose you were to sell all of your major possessions (including your home), turn all of your investments and other assets into cash, and pay all of your debts. Would you be in debt, break even, or have something left over? A very small number (3.3%) of people responded that they would be in serious debt. About one-fifth of the respondents (17.5%) said they would about break even and over half of people (53.5%) reported they would have money left over (Table 11). Amount of Reserve Fund. The amount of reserve funds was measured with the following question: If you lost your job today, how many months could you live using your savings? Over one-third of the respondents (35.4%) reported that they did not have any reserve fund (they could live 0 months with their savings, Table 12). Among those who had reserve funds, the largest number of people (38.2% of those who had reserve funds) responded they could live 1 to 2 months with their savings. About one-fifth (19.1%) of those who had reserve funds reported they could live off their savings for 3 to 4 months. About one-fifth (17.9%) of the group reported 5 to 6 months, and by combining categories, about one-quarter (14.9%) of the respondents could live 7 months or longer with their savings. Monthly Credit Payment. Monthly credit payments and other monthly installment loan payments, except mortgage payments, were measured to explore the personal financial wellness of the respondents. These monthly debt payments are significant components of the objective scales of personal financial wellness. About a third of the respondents (32.7%) reported they usually paid $1 to $100 dollars toward their credit cards per month (Table 13). The second largest group (21.2%) usually paid $101 to $200, followed by $201 to $300 group (15.2%). Combining those three categories, 59.1% (not shown in Table 13) of the respondents usually paid $1 to $300 toward their credit cards each month. About one-tenth of the respondents (7.1%) paid $301 to $400 toward credit cards per month and 5.6% of the respondents paid

So-hyun Joo Chapter V. Results 95 Table 11 Responses to Solvency Measure Question: Suppose you were to sell all of your major possessions (including your home), turn all of your investments and other assets into cash, and pay all of your debts. Would you be in debt, break even or have something left over? Would be in Would about Would have serious debt break even money left over Value 1 2 3 4 5 n 9 21 47 48 144 % 3.3 7.8 17.5 17.8 53.5 N a =269 M = 4.10 SD=1.15 a Number of responses does not add to 271 due to non-response.

So-hyun Joo Chapter V. Results 96 Table 12 Responses to the Amount of Reserve Fund Question: If you lost your job today, how many months could you live using your savings? Value n % % a 0 Months 95 35.4 1-2 Months 66 24.6 38.2 3-4 Months 33 12.3 19.1 5-6 Months 31 11.6 17.9 7-12 Months 12 4.5 6.9 13-24 Months 6 2.2 3.5 Over 24 Months 25 9.3 14.5 N b =268 100.0 N c =173 a Percentage of the total of 173 respondents those who had savings for emergency. b Number of responses does not add to 271 due to non-response. c Total number of respondents those who could live more than 1 month with their savings.

So-hyun Joo Chapter V. Results 97 Table 13 Credit and Installment Loan Payments per Month Credit Payment Other Loan Payments Value n % n % $ 0 25 9.3 70 26.4 $1-$100 88 32.7 10 3.8 $101-$200 57 21.2 25 9.4 $201-$300 41 15.2 52 19.6 $301-$400 19 7.1 29 10.9 $401-$500 15 5.6 33 12.5 $501-$600 7 2.6 16 6.0 $601-$700 6 2.6 11 4.2 $701-$800 2.7 7 2.6 $801-$900 2.7 4 1.5 $901-$1,000 3 1.1 1.4 Above $1,000 4 1.5 7 2.6 N a =269 100.0 N a =265 100.0 a Number of responses does not add to 271 due to non-response.

So-hyun Joo Chapter V. Results 98 $401 to $500. Combining categories, less than one-tenth (8.8%) of the respondents monthly credit cards payments were over $500. There were five respondents whose credit payments were over $1,000 per month. Monthly Installment Loan Payments. Over one-quarter of the respondents (26.4%) did not have any monthly installment loan payments. About one-fifth (19.6%) of the respondents paid between $201 and $300 for monthly installment loan payments, followed by 12.5% of the respondents who paid $401 to $500. By combining categories (not shown in Table 13), almost one-fifth (17.3%) of the respondents had over $500 in monthly installment payments. Less than one-tenth of the respondents (9.4%) reported $101 to $200 in monthly installment payments and slightly over one-tenth (10.9%) of the respondents reported $301 to $400. A small number (3.8%) of people had less than $100 in monthly installment payments. Amount of Savings per Month. Over three-tenths (31.0%) of the respondents did not save any money each month (Table 14). Over one-third (39.5%) of the respondents saved less than $100 per month. Over one-tenth of the respondents (11.8%) saved between $101 and $200. Combining the two groups, just over one-half (51.3%, not in Table 14) of the respondents saved less than $200 per month. Those who had over $300 in monthly savings were 10.4% (combining categories, not in the Table 14). Amount of the Voluntary Supplementary Tax-Sheltered Employer-Sponsored Retirement Contribution Program Per Month. Three-quarters of the respondents (77.3%) did not contribute to the voluntary supplementary tax-sheltered employer-sponsored retirement contribution program (Table 14). Slightly over one-tenth of the respondents (10.4%) contributed less than $100. By combining categories, those who contribute over $100 into the voluntary supplementary tax-sheltered employer-sponsored retirement contribution programs Were 12.4%.

So-hyun Joo Chapter V. Results 99 Table 14 Savings and Voluntary Supplementary Tax-Sheltered Employer-Sponsored Retirement Contributions per Month Savings Retirement Contributions Value n % n % $ 0 84 31.0 208 77.3 $1-$100 107 39.5 28 10.4 $101-$200 32 11.8 15 5.6 $201-$300 20 7.4 8 3.4 $301-$400 7 2.6 4 1.5 $401-$500 9 3.3 1.4 $501-$600 4 1.5 3 1.1 $601-$700 1.4 0 0 $701-$800 2.7 1.4 $801-$900 1.4 0 0 $901-$1,000 3 1.1 0 0 Above $1,000 1.4 1.4 N=271 100.0 N a =269 100.0 a Number of responses does not add to 271 due to non-response.

So-hyun Joo Chapter V. Results 100 Respondents were asked to report the primary reason for not contributing to the voluntary supplementary tax-sheltered employer-sponsored retirement contribution program. As shown in Table 15, the largest number (47.2%) of the respondents reported that they do not have enough money as the primary reason. The second most frequent answer (34.7%) was I do not know enough about the retirement plan. A relatively small number of people responded I am not convinced that I need to invest and I do not know how much money to save and invest (3.0% and 3.0%, respectively). Over one-tenth (12.1%) of the respondents wrote their own reasons for not contributing. The specified reasons were investing in other programs, waiting for children to finish college, and not having chances to consult with the company. Overall financial wellness scales of Personal Financial Wellness The overall financial wellness scales of personal financial wellness consisted of three measures; satisfaction with personal financial situations, perceived financial wellness, and feelings about financial situations. The descriptive results are shown in Graph 1, Table 16, and Table 17. Satisfaction with Personal Financial Situation. The satisfaction with personal financial situations was measured by a question with a 10-step measure. Those who were dissatisfied with their financial situations marked lower steps and those who were satisfied with their financial situations marked higher steps. As Graph 1 shows, only 1.2% of the respondents marked the highest level of financial satisfaction, but 7.5% of the respondents marked the lowest step. By combining the categories (1, 2, 3, and 4), more than one-half (52.6%) of the respondents were dissatisfied with their financial situation. Slightly over one-fifth (21.8%, combining 7, 8, 9, and 10) were satisfied with their financial situation, and about a quarter (25.7% combining 5 and 6) were in the middle.

So-hyun Joo Chapter V. Results 101 Table 15 Responses to the Primary Reason for Not Contributing to the Voluntary Supplementary Tax- Sheltered Employer-Sponsored Retirement Contributions Reason n % I do not have enough money 94 47.2 I do not know enough about the retirement plan 69 34.7 I am not convinced that I need to invest 6 3.0 I do not know how much money to save and invest 6 3.0 Other 24 12.1 N= 199 a 100.0 a The total number does not add up 208 (number of non-contributor) due to the missing data.

So-hyun Joo Chapter V. Results 102 Graph 1 Percentage Distribution of Satisfaction with Personal Financial Situation a Question: How satisfied you are with your present financial situation. Those who are not satisfied will be towards the lower steps. Those who are satisfied will be towards the higher steps. 30.0 20.0 19.4 18.2 15.8 10.0 7.5 7.5 9.9 11.9 8.3 0.0 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 9.00 10.00 N b = 253 M = 4.57 SD = 2.08 a The percentage of the respondents who answered 9 was 0.4. The percentage of the respondents who answered 10 was 1.2. b Number of respondents doe not add to 271 due to non-response.

So-hyun Joo Chapter V. Results 103 Perceived Financial Wellness. Perceived financial wellness was measured with the question of how well are you financially? As shown in Table 16, respondents answered a 5-point scale ranging from feel like I am always in financial trouble to feel like I am doing pretty well. By combining categories, about three-tenths (29.9%) of the respondents answered that they were doing pretty well, and about three-tenths (29.2%) said they were always in financial trouble. The largest number of people (41.0%) said they were in the middle. Feeling about Financial Situations. Feeling about financial situation was measured with the question how do you feel about your financial situation? As shown in Table 17, the answers ranged from 1 to 5, and were labeled I find it is hard to pay bills for the lowest level and I save more than spend as the highest level. Responses of the measure were different from the perceived financial wellness. Slightly over one-third of the respondents (35.1%) said they find it hard to pay bills (combining categories). By combining categories, only 12.2% of the respondents marked higher levels (save more than they spend) and the largest number of people (52.8%) responded that they were in the middle. While the number of people who chose the middle point were higher in this scale than the perceived financial wellness (52.8% for feeling about financial situation versus 41.0% for perceived financial wellness), the number of respondents who chose higher levels of financial wellness was fewer than the perceived financial wellness measure (12.2% for feeling about financial situation versus 29.9% with perceived financial wellness). Unfortunately, the statement of I save more than spend on the scale of Feeling about Financial Situation was not the best choice because for the great majority of people it is mathematically impossible to save more than one spends. A better choice to contrast to the other side would be I find it is easy to save. However, many respondents (12.2%) still selected this portion of the scale perhaps as an indicator of their situation which they may have perceived as being in contrast to the other side of the scale ( I find it is hard to pay bills ).

So-hyun Joo Chapter V. Results 104 Table 16 Responses to Perceived Financial Wellness Question: How well are you financially? Feel like I am always in financial trouble Feel like I am doing pretty well Value 1 2 3 4 5 n 30 49 111 59 22 % 11.1 18.1 41.0 21.8 8.1 29.2% 29.9% N =271 M= 2.98 SD = 1.08

So-hyun Joo Chapter V. Results 105 Table 17 Responses to Feeling about Financial Situation Question: How do you feel about your financial situation? I find it is hard to pay bills I save more than spend a Value 1 2 3 4 5 n 29 66 143 29 4 % 10.7 24.4 52.8 10.7 1.5 35.1% 12.2% N=271 M=2.68 SD=.86 a Unfortunately, this statement on the scale of Feeling about Financial Situation was not the best choice because for the great majority of people it is mathematically impossible to save more than one spends. A better choice would be I find it is easy to save. However, many respondents (12.2%) still selected this portion of the scale perhaps as an indicator of their situation which they may have perceived as being in contrast to the other side of the scale ( I find it is hard to pay bills ).

So-hyun Joo Chapter V. Results 106 The three overall financial wellness scales of personal financial wellness were next computed into one index. The first overall financial wellness scale (i.e., satisfaction with personal financial situation) was recoded to a 5-point scale for computing with the other two scales. The reliability coefficient (Chronbach s alpha) of the overall satisfaction index was.8940. The possible range of the overall satisfaction index was 3 to 15 and the overall satisfaction index of the respondents ranged 3 to 15 (Table 18). The mean of the overall satisfaction index was 8.20 and standard deviation was 2.74. The mean of the overall satisfaction index was converted to a percentage score. The converted score of the overall satisfaction index of personal financial wellness was 43.32% which is lower than midpoint of 50%. Research Question 2: Demographic Characteristics and Personal Financial Wellness The second research question of this study was: How does the personal financial wellness profile differ by the demographic characteristics? This section describes personal financial wellness according to the demographic characteristics. The demographic characteristics included gender (GENDER), marital status (MS), education (EDU), ethnicity (ETHN), age (AGE), household income(income), number of financial dependents (Number), housing tenure(housing), and length of employment at a current employer (YEAR). Personal financial wellness includes subjective perception of personal finance, behavioral assessment of personal finance, objective scales, and overall financial wellness scales. The variables of personal financial wellness in the regression equations are the subjective perception index (FAT), the behavioral assessment index (FBT), satisfaction with financial situation (FM1), perceived financial wellness (FM2), feeling about financial situation (FM3), solvency measure (FO1), amount of reserve funds (FO2), credit payments per month (FO3), other installment payments per month (FO4), savings per month (FO5), and voluntary supplementary tax-sheltered employer-sponsored retirement contribution per month (FO6).

So-hyun Joo Chapter V. Results 107 Table 18 Frequencies of Overall Satisfaction Index a Value Label Valid Cum Value Frequency Percent Percent Percent 3.00 16 5.9 6.3 6.3 4.00 13 4.8 5.1 11.5 5.00 15 5.5 5.9 17.4 6.00 24 8.9 9.5 26.9 7.00 27 10.0 10.7 37.5 8.00 42 15.5 16.6 54.2 9.00 35 12.9 13.8 68.0 10.00 24 8.9 9.5 77.5 11.00 25 9.2 9.9 87.4 12.00 20 7.4 7.9 95.3 13.00 8 3.0 3.2 98.4 14.00 3 1.1 1.2 99.6 15.00 1.4.4 100.0. 18 6.6 Missing ------- ------- ------- Total 271 100.0 100.0 Mean 8.202 Std err.172 Median 8.000 Mode 8.000 Std dev 2.738 Variance 7.495 Kurtosis -.599 S E Kurt.305 Skewness -.083 S E Skew.153 Valid cases 253 Missing cases 18 a The sum of the three overall financial wellness scales: satisfaction with financial situation, perceived financial wellness, and feeling about financial situation. The satisfaction with financial situation was recoded to 5-point scale. Therefore, the overall satisfaction index consisted of the sum of the three 5-point overall financial wellness scale.

So-hyun Joo Chapter V. Results 108 Correlation Results Table 19 shows the correlation matrix among the variables. Among the demographic characteristics, age, education, household income, number of financial dependents, and length of employment were entered into the correlation matrix. Age showed significant positive relationships with FAT, FBT, FM1, FM2, FM3, FO1, FO2, FO5, and FO6. Age and FO4 had a negative correlation. Those who were older tended to have better personal financial wellness profiles in subjective perception, behavioral assessment, overall satisfaction, perceived financial wellness, feeling about personal financial situation, solvency, reserve fund, monthly savings, and voluntary supplementary tax-sheltered employer-sponsored retirement contributions. Those who were older tended to have less monthly installment payments than younger respondents had. Education showed a significant relationship with credit payments per month (FO3). Those who had more education tended to pay more monthly credit payments. Household income had significant positive relationships with all of the measures of personal financial wellness. That means that if a respondent had more household income, his or her personal financial wellness tended to be higher. The number of financial dependents had a significant positive relationship with monthly installment loan payments. Those who had more financial dependents had more monthly installment payments. Length of employment showed significant positive relationship with FAT, FM1, FM2, FM3, FO1, FO2, and FO5. Therefore, those who worked a longer period of time with the current employer tended to have higher levels of personal financial wellness. Regression Results To describe personal financial wellness according to demographic characteristics, regression analysis was used. The independent variables were age, education, gender dummy variable (GenderD), housing tenure dummy variable (HousingD), income, marital status dummy variable (Marital StatusD), number of financial dependents, ethnicity dummy variable (EthnicityD),

So-hyun Joo Chapter V. Results 109 Table 19 Correlation Matrix of Demographic Characteristics and 11 Measures of Personal Financial Wellness FAT a FBT FM1 FM2 FM3 FO1 AGE.2133.2013.2396.1883.1508.2924 ( 254) ( 254) ( 243) ( 261) ( 261) ( 259) P=.001 P=.001 P=.000 P=.002 P=.015 P=.000 EDU -.0893.0158 -.0989 -.0847 -.0800 -.1028 ( 262) ( 261) ( 252) ( 270) ( 270) ( 268) P=.150 P=.799 P=.117 P=.165 P=.190 P=.093 INCOME.3903.2840.3932.3849.3516.2750 ( 263) ( 262) ( 253) ( 271) ( 271) ( 269) P=.000 P=.000 P=.000 P=.000 P=.000 P=.000 NUMBER -.0398.0137 -.0904 -.0369 -.0700 -.0228 ( 259) ( 258) ( 249) ( 267) ( 267) ( 265) P=.524 P=.827 P=.155 P=.549 P=.254 P=.712 YEAR.2182.0785.2175.1656.1290.1950 ( 263) ( 262) ( 253) ( 271) ( 271) ( 269) P=.000 P=.206 P=.000 P=.006 P=.034 P=.001 a FAT: Subjective perception of personal finance (Perception of how respondents felt about their financial situation utilizing the eight 4-point questions) FBT: Behavioral assessment of personal finance (Assessment of respondents personal financial behaviors utilizing the twelve 4-point questions) FM1: Satisfaction with financial situation (Respondents satisfaction level with their present financial situation measured with a 10-point question) FM2: Perceived financial wellness (Respondents perception about their financial wellness measured with a 5- point question) FM3: Feeling about personal financial situation (Respondents feelings about their financial situation measured with a 5-point question) FO1: Solvency measure AGE: Age of the respondents in years EDU: Education INCOME: Household income NUMBER: Number of financial dependents YEAR: Length of employment with a current employer

So-hyun Joo Chapter V. Results 110 Table 19 (Continued) FO2 a FO3 FO4 FO5 FO6 AGE.3649.0650 -.2339.1446.1969 ( 258) ( 260) ( 256) ( 261) ( 259) P=.000 P=.296 P=.000 P=.019 P=.001 EDU -.0649.1360 -.0605 -.0747.0786 ( 267) ( 268) ( 264) ( 270) ( 268) P=.291 P=.026 P=.327 P=.221 P=.200 INCOME.3056.2434.1397.3933.2708 ( 268) ( 269) ( 265) ( 271) ( 269) P=.000 P=.000 P=.023 P=.000 P=.000 NUMBER -.0847.0441.2243.0339.0504 ( 264) ( 265) ( 261) ( 267) ( 265) P=.170 P=.474 P=.000 P=.581 P=.414 YEAR.2175 -.0468 -.0932.1726.1193 ( 268) ( 269) ( 265) ( 271) ( 269) P=.000 P=.445 P=.130 P=.004 P=.051 a FO2: Amount of reserve funds FO3: Monthly credit payments FO4: Monthly installment loan payments FO5: Monthly savings FO6: Monthly voluntary supplementary tax-sheltered employer-sponsored retirement contributions AGE: Age of the respondents in years EDU: Education INCOME: Household income NUMBER: Number of financial dependents YEAR: Length of employment with a current employer

So-hyun Joo Chapter V. Results 111 and length of employment. The dependent variables were the 11 personal financial wellness measures. Subjective Perception of Personal Finance. Table 20 shows the regression results. The correlations among the independent variables and the collinearity test result are in Appendix J. The nine demographic characteristics explain 23.1% of the variance of the dependent variable. The R square suggests that there are other factors that explain the subjective perception of personal finance besides the nine demographic characteristics used in this research. Among the nine demographic characteristics, housing tenure, income, number of financial dependents, and length of employment had significant coefficients. Controlling other conditions, the predicted subjective perception of personal finance levels of the homeowners were higher than the others (renters and those who live with others). Household income has a positive relationship with the subjective perception of personal finance. With other demographic characteristics being equal, the predicted level of one s subjective perception of personal finance was higher for those who have higher household income than lower income groups. The number of financial dependents had a negative relationship with the subjective perception index. Those who had more financial dependents showed lower levels of personal financial wellness in the subjective perception index. Those who worked longer years with the current employer tended to have higher levels of the personal financial wellness profile in the subjective perception index. The Beta coefficients represent the relative contributions of the variables in the equation (Howell, 1992; Pedhazur, 1982). Household income was a relatively more significant predictor of the subjective perception of personal finance than the other three variables (HousingD, NUMBER, and Length of employment). Behavioral Assessment of Personal Finance. As shown in Table 21, household income was the only significant variable in explaining the behavioral assessment of personal finance (FBT). Those who had more household income were more likely to show a better behavioral

So-hyun Joo Chapter V. Results 112 Table 20 Regression Results of Personal Financial Wellness with Demographic Characteristics as Independent Variables and the Subjective Perception Index a as the Dependent Variable (N = 248) Variable b b Beta t Sig. Constant 11.884 4.428.000 Age -2.51E-03 -.005 -.072.943 Education 1.453E-02.004.071.944 GenderD 1.998.074 1.270.205 HousingD 1.932.164* 2.478.014 Income.794.314** 4.352.000 Marital StatusD 1.043.094 1.222.223 Number -.976 -.222** -3.270.001 EthnicityD 1.126.061 1.025.306 Length of employment.411.139* 2.028.044 R 2 =.231 F = 7.961** * p <.05. ** p <.01. a Perception of how respondents felt about their financial situation utilizing the sum of the eight 4-point questions b Age: Respondent s age in years Education : Respondent s education level GenderD: Dummy variable for Gender : 1 if female, 0 if male HousingD: Dummy variable for Housing: 1 if home-owner, otherwise, 0 Income: Respondent s household income Marital StatusD: Dummy variable for Marital status: 1 if married, otherwise, 0 Number: Number of financial dependents EthnicityD: Dummy variable for Ethnicity: 1 if white, otherwise, 0