ANTECEDENTS AND CONSEQUENCES OF HOUSEHOLD FINANCIAL MANAGEMENT IN BRAZILIAN LOWER-MIDDLE-CLASS

Ana Paula S C Miotto,Juracy Parente

doi:10.1590/s0034-759020150106

Ana Paula S C Miotto, Juracy Parente

Open Access

https://doi.org/10.1590/s0034-759020150106

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Abstract

Through two complementary and exploratory studies – one qualitative and one quantitative – this research aims to understand the ways in which lower-middle-class families in Brazil manage their household finances. The study proposes an integrated framework that brings together various previously disconnected theoretical fragments. Based on a survey with a sample of 165 lower-middle-class female consumers of a retail company in São Paulo, we explored and tested, via a quantitative study, how antecedents such as personal characteristics affect the financial management process, as well as its consequences, either negatively as defaults or positively as savings. The model calibration and analysis were derived from a series of regression analyses. The results revealed the mediator role that financial management plays in the relationship between personal characteristics and defaults and savings. Compared to previous studies with consumers of more affluent countries, we identified peculiar findings among Brazilian lower-middle-class consumers: inadequate attention to control, weak or no focus on short- or long-range planning, widespread absence of budget surplus, and influence of critical events on episodes of default.

Highlights

Most consumers’ spending comes from the same set of limited resources: individual or family income
This study provided a valuable understanding of how consumers evaluate, regulate and process their household budgets, and revealed some of the strategies used to promote their self-control and, avoid any risk of default
The results demonstrate the diversity of consumer behavior in relation to managing household finances, and suggest that consumers who put less effort into managing finances tend to incur more default situations

Summary

Introduction

Most consumers’ spending comes from the same set of limited resources: individual or family income. Spending in different categories can compete for winning a share of the household budget (Du & Kamakura, 2008). The question of how families manage their finances has been investigated within an emerging area of knowledge called financial decision-making. This area mainly comprises studies on expenditure patterns and resource allocation, loans and payment (or nonpayment), savings, and purchases of complex financial products (Lynch, 2011; Du & Kamakura, 2008; Kirchler, Hoelzl, & Kamleitner, 2008; Soman & Cheema, 2011; Antonides, Groot, & Raaij, 2011; Amar, Ariely, Ayal, Cryder, Rick, 2011). Just recently, understanding of how domestic financial decisions are made has become a main focus of studies in marketing (Lynch, 2011)

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