Editor's Notes

This issue of The Journal of Personal Finance captures the spirit of our mission. Our beloved Journal provides scholarly articles that examine the impact of financial issues on households as well as the practice of financial planning. Our current issue contains articles from respected researchers in our field and I am proud to share their contributions with you. Thank you to our Editorial Board for your tireless work reviewing, editing, and communicating with this edition’s authors.

We kick off our Spring 2023 edition with a review of personal finance scales. In Personal Finance Scales: A Literature Review, Dr. Jing Jian Xio and Beatrix Lavigueur explore scales in financial wellbeing, financial self-efficacy, financial behavior, financial management and decision styles, as well as financial attitudes. This article includes meaningful takeaways for researchers and professionals. This study consolidates and introduces readers to a wide range of scales that add value to practitioner processes and research methods. The paper goes on to provide concise reliability and validity metrics for each scale, providing a launching point for research across a broad number of fields within personal finance.

Our second offering dives deep into investment beliefs. The Role of Financial Advisors in Shaping Investment Beliefs (Pearson, Korankye & Qing) examines associations between financial advisor usage and client investment beliefs. This article utilizes an illustrative model and finds an association between the influence of financial advisors and client beliefs. This article further develops a framework of client outcomes when working with advisors and reinforces the need of advisors to be aware of their own beliefs, attitudes and behaviors when working with clients. This article is valuable to both practitioners and researchers, helping advance additional understanding of the financial planning profession and our impact on those we serve.

In addition to exploring advisor use and investment beliefs, our Spring issue also studies the relationship between investment advisor use and return expectations. In Investment Advisor Use and Stock Market Return Expectations, Drs. Reiter and Seay explore the association of working with financial professionals and investors stock market outlooks. Results showed that investors working with advisors were likely to expect more realistic and historically appropriate returns. The article’s key finding reinforced the role financial advisors play in client outcomes and expectations.

Drs. Lewis and Patton explore factors that determine the likelihood individuals participate in employer retirement plans. An Exploration of Contributing Factors Related to Retirement Plan Participation examines demographic and socioeconomic variables related to retirement plan participation and contributions. Results of this article provide insights for plan participants, practitioners, and plan sponsors on how to target participant outreach and education.

Our Spring edition concludes with a study of Bequest Expectations and Annuity Ownership (Yan & James). This paper uses data from the Health and Retirement Study (HRS) to examine how bequest expectations impact annuitization decisions. The paper found people who have a higher expectation of leaving a bequest are more likely to have an annuity. The differing relationship of annuitization with bequest motives and bequest expectations reveal an important distinction between these two measurements. This study challenges the use of bequest expectations as a proxy for bequest motive.

I hope you enjoy our Spring 2023 edition of the Journal. This edition deepened my understanding of financial scales, the value of working with an advisor, retirement contributions, and annuitization. Our profession is constantly evolving, and we are grateful to be part of that journey! We are looking for additional submissions for our Fall 2023 edition. If you have been working on a manuscript, please send it our way!

Craig Lemoine, Ph.D., MRFC®, CFP® | Editor — Journal of Personal Finance Director of Financial Planning | University of Illinois at Urbana-Champaign

Personal Finance Scales: A Literature Review

Beatrix Lavigueur, MS1

Jing Jian Xiao, Ph.D.2

Abstract

The purpose of this literature review is to document personal finance scales published in research journals, describe features of each scale, and provide implications for both researchers and practitioners. Through a literature search, 30 scales published in 26 different papers were collected and analyzed based on key factors such as their target population, purpose, number of factors, number of items, reliability and validity. Scales were then divided into five categories: financial wellbeing, financial self-efficacy, financial behavior, financial management and decision styles, and financial attitudes. Implications for researchers and practitioners are provided.

Key Words: content analysis, consumer finance, literature review, personal finance, scale

1. Graduate Student, Department of Human Development and Family Science, University of Rhode Island, blavigueur@uri.edu

2. Professor, Department of Human Development and Family Science, University of Rhode Island, jjxiao@uri.edu