Financial Behaviour Under Economic Strain in Different Age Groups: Predictors and Change Across 20 Years

Abstract

The present study examined the multiple micro- and macro-level factors that affect individuals’ financial behaviour under economic strain. The following sociodemographic and economic factors that predict financial behaviour were analysed: age group, year of data gathering, and attitudes towards consumption (economical, deprived, and hedonistic). Subjective financial situations and demographic characteristics were controlled for. Finnish time series data that consisted of five cross-sectional nationally representative surveys were used (n = 10 043). The analyses revealed four types of financial behaviour: cutting expenses, borrowing, increasing income, and gambling. Young adults aged 18–25 reported the lowest frequency of borrowing and gambling and the highest frequency of increasing income (together with young adults aged 26–35). Participants aged 66–75 scored the lowest in cutting expenses and increasing income in comparison to all other age groups. Financial behaviour under economic strain in 2019 can be characterized by lower instances of borrowing than in 2004 and 2009 and higher frequencies in increasing income in comparison to all other years of data gathering. Finally, strong attitudes towards saving were related to lower frequency of borrowing and gambling, whereas stronger hedonistic attitudes were related to lower frequency of cutting expenses and more frequent borrowing. The research results provide tools for consumer policy, consumer education, and consumer regulation.