Volume 18, Issue 1
Contents Financial Planning Client Interaction Theory (FPCIT) ��������������������������������������������������������������������������������������������������� 9 Sarah D. Asebedo, Ph.D., CFP®, Texas Tech University The personal financial planning (PFP) profession has grown substantially since its inception in 1969. While PFP is widely practiced, the recognition of PFP as a formal profession is not widespread. Experts have noted that this is largely due to a lack of PFP-specific theory that illuminates how the PFP profession is unique from its peers. This paper seeks to strengthen the theoretical foundation of PFP by introducing Financial Planning Client Interaction Theory (FPCIT). FPCIT is a theory derived from the very thing that makes PFP special—the financial planner/client relationship. FPCIT explains the utility derived from the interaction between a financial planner and client. FPCIT provides theoretical grounding for quantifying the value of PFP as a professional area of research and practice, which informs PFP stakeholders—financial planners, consumers, academics, regulators, and policy makers— about the benefits and uniqueness of the PFP profession. A Mechanistic Model of Personal Finance ����������������������������������������������������������������������������������������������������������������������� 25 Joseph L. Galatowitsch, Bachelor of Science, Biomedical Engineering, MBA Widespread personal finance education and advice have not been proven to materially impact the financial health and well-being of most households in the U.S. Ironically, a clear and comprehensive understanding of the operating model of how income, expenses, spending and asset accumulation are interconnected has not been seriously explored or defined. Without an adequate understanding of this operational subsystem, the impact of spending and asset accumulation decisions cannot be objectively assessed. This model provides a robust and actionable tool to help improve understanding of the operating implications and consequences of these decisions. Broad adoption and use of a standard model of income, expenses, spending, and asset accumulation in financial literacy education may have a positive and sustainable impact on individuals and personal finance professionals alike. “As Soon As…” Finances: A Study of Financial Decision-Making ����������������������������������������������������������������������������� 37 Barbara O'Neill, Ph.D., CFP, CRPC, AFC, CHC, CFEd, CFCS, Extension Specialist in Financial Resource Management and Distinguished Professor Yilan Xu, Ph.D., Assistant Professor, University of Illinois at Urbana-Champaign Carrie Johnson, Ph.D., AFC, Assistant Professor and Extension Specialist in Personal & Family Finance D. Elizabeth Kiss, Ph.D., Associate Professor and Extension Specialist, Kansas State University Steven Buyske, Ph.D., Associate Professor, Rutgers University This article reports findings from a study of financial decision-making featuring analyses of responses to open-ended questions. The target audience was young adults with 69% of the sample under age 45. Four key financial decisions were explored: financial goals, homeownership, retirement planning, and student loans. Results indicated that many respondents were sequencing financial priorities instead of funding them simultaneously, and they were delaying homeownership and retirement savings. Three-word phrases like “once I have…,” “after I [action],” and “as soon as…” were noted frequently, indicating a hesitancy to fund certain financial goals until achieving others (i.e., sequential goal pursuit). This article also provides implications for financial practice. 37 Credit Card Use of College Students: A Broad Review ������������������������������������������������������������������������������������������������� 55 Alex Yue Feng Zhu, Ph.D., Visiting Research Assistant Professor, Lingnan University (Hong Kong) Using credit cards is an effective way for college students to learn about credit and shape their credit behavior in preparation for financial independence. However, negative outcomes are associated with unhealthy credit card use. By reviewing articles in the past 15 years, this article summarizes the factors influencing credit card use among college students, and identifies the research gaps in previous studies. The purpose of this article is to direct future studies in promoting healthy and responsible credit card use, which promotes financial wellbeing of college students.
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