research on financial management

• Browse All Articles
• Newsletter Sign-Up

FinancialManagement →

No results found in working knowledge.

• Were any results found in one of the other content buckets on the left?
• Try removing some search filters.
• Use different search filters.

ORIGINAL RESEARCH article

Financial management behavior among young adults: the role of need for cognitive closure in a three-wave moderated mediation model.

• 1 Department of Social and Organizational Psychology, Universidad Nacional de Educación a Distancia, Madrid, Spain
• 2 Department of Business Economics and Accounting, Universidad Nacional de Educación a Distancia, Madrid, Spain
• 3 Department of Psychology, University of Bologna, Bologna, Italy

This three-wave study aims to explore whether the impact of investment literacy on the financial management behavior is mediated by investment advice use and moderated by the need for cognitive closure. A total number of 272 financially independent adults, under 40 years, completed questionnaires at three different times with 3-month intervals. The results reveal that employees with more investment advice use and characterized by high need for cognitive closure show a higher level of financial management behavior, in relation to both the urgency (seizing) of getting knowledge and the permanence (freezing) of such knowledge. The present study contributes to better understand how and when investment literacy drives well-informed and responsible financial behavior. According to these results, interventions to improve financial behavior should focus on the combination of investment advice use and metacognitive strategies used by individuals to make financial decisions.

Introduction

Why are some people more efficient in their financial behaviors than others? Financial management is a complex set of behaviors and decisions that can change as a function of the importance and difficulty of implementing the behavior, as well as of people’s capabilities, skills, and opportunities to perform such behaviors. The undesirable short-, mid-, and long-term consequences of inadequate financial management behavior not only affect individuals, but also their household, and ultimately could produce a wide range of unwanted events on the entire society ( Fenton et al., 2016 ). For instance, inadequate financial behaviors can lead to temporary or chronic debts, inability to pay utility bills or filing for bankruptcy and such behaviors result from economic factors together with psychological ones.

Financial literacy has been defined as “the ability and confidence to use one’s own financial knowledge to make financial decisions” ( Huston, 2010 , p. 307). This concept not only concerns individual investors but also professional ones working in companies that manage money. It is in fact important not only to establish a long-term financial plan but also to know, and to have, financial alternatives in which to invest money or to save it. Financial planning is a very important knowledge and skill considering that individuals live longer and have to save for their old age, when they are no longer working.

Recent studies investigated the impact of financial literacy on various financial behaviors, like loans, mortgages, or retirement planning. The fact that financial literacy is rather low, even across well developed countries, is a critical factor toward well-informed financial decision making and behaviors. Hence, financial behavior management is a topic of interest to economists, social workers and policy makers as well.

However, a large-scale analysis of recent data indicated that financial education interventions explain only 0.1% of the variance in financial behaviors. In contrast, financial literacy has a stronger effect on financial behavior when the former is measured rather than manipulated ( Fernandes et al., 2014 ). However, Fernandes et al. (2014) study shows also that financial literacy has less impact on financial behavior when psychological and social variables, often omitted in previous research, are considered. Therefore, this study aims to fill this gap by taking a psychosocial approach and including cognitive, motivational and social factors in the relationship between financial literacy and financial behavior.

Huston (2010) distinguishes two concepts often considered as synonymous: financial literacy and financial knowledge. A successful measure of financial literacy should allow to identify which outcomes are most impacted by a lack of financial knowledge and skill, and, consequently, allow educators to provide knowledge achieve a desired outcome ( Huston, 2010 ).

In addition, as most of the studies have used samples of students, that is, adolescents or people who are still in their early youth, and not yet financially independent, in this study, we will analyze the financial management behavior of young adults who have their own economic income. Economic independence is in fact a key indicator of transition to adulthood ( Lee and Mortimer, 2009 ).

Based on Huston (2010) theoretical model, this work aims to explore predictors, mediators, and moderators of financial management behavior when people have independent economic resources to save for the future. Specifically, in the present study, we argue that it is necessary to consider the mediating role of investment advice use in the relation between investment literacy and financial management behavior among young adults. As Huston (2010 , p. 307) stated, “financial literacy is a component of human capital that can be used in financial activities” to increase behaviors that enhance financial wellbeing. Hence, financial knowledge would be translated in behaviors by using available resources “directly related to successfully navigating personal finances” ( Huston, 2010 , p. 307), as professional investment advisory services. In addition, we propose that need for cognitive closure (hereafter, NCC), an individual dispositional characteristic, moderates the relations between investment advice use and financial management behavior. The moderated mediation analysis that includes both processes will allow us to better understand the variables that facilitate or hinder young adults’ financial management behavior.

In summary, this study makes three main theoretical and methodological contributions. First, we investigate if the strong direct relationship between financial literacy and financial behaviors is valid when considering two psycho-social variables that consider conditions and types of individuals showing the financial behaviors. Second, we consider younger adulthood, which is a period of individuals’ life-cycle in which many important financial choices start to be made, like buying commodities, a house or setting up a family ( Webley et al., 2002 ). Three, considering what reported by Fernandes et al. (2014) , we investigate if the consistent association between financial literacy and financial behavior observed in many cross-sectional studies is observed also when such independent and dependent variables are measured in different moments.

Financial Management Behavior

Financial management behavior is the acquisition, allocation, and use of financial resources oriented toward some goal. Empirical evidence supports that, if families achieve effective financial management, both their economic well-being and their financial satisfaction improve at the long term ( Consumer Financial Protection Bureau, 2015 ). However, financial management behavior is complex and difficult to implement. The supervision of money and expenditure, which includes frugal and careful spending of money, is a useful protection against risky financial practices.

Moreover, financial management behavior may vary between younger and older people. Although the repeated experience and practice of financial activities influence people’s skills to manage their finances, empirical evidence seems to support that young people practice fewer basic financial tasks, such as budgeting or regularly planning their long-term savings ( Jorgensen and Savla, 2010 ). Because of this evidence, it is of interest to analyze the antecedents of young adults’ financial management behavior.

Investment Literacy

Investment literacy implies, firstly, an accumulation of knowledge about personal concepts and financial products, obtained by means of education or direct experience. Secondly, it includes a series of abilities and self-confidence to effectively apply the knowledge to the management of one’s own finances. Different empirical works have shown the consistent relations between the specific financial knowledge, the probability of saving, the effectiveness of investment strategies, and saving behaviors in general ( Jorgensen and Savla, 2010 ). Hence, considering we measured our variables at three points in time, we propose that:

Hypothesis 1: Investment literacy at time 1 (hereafter T1) will be positively related to financial management behavior at time 3 (hereafter T3).

Investment Advice Use

The use of financial consultants has been proposed as a useful support to financial decisions and as a substitute of financial knowledge and capacity for individuals and family with lower resources. However, Collins (2012) shows that financial literacy, and search and use of professional advice, are not only distinct and complementary processes, but also positively related, because results show that individuals with higher incomes, better educated and with more financial literacy are the most likely to search and use financial advice. Individuals that are less knowledgeable tend to overestimate their abilities and are unable to recognize their limited financial competences ( Kruger and Dunning, 1999 ). However, other studies show that the use of financial consultants seems to have a direct influence in guiding individuals and families toward more profitable investments ( Joo and Grable, 2004 ). In the light of this evidence, we argue that individuals financially competent, aware of the complexities of the economic field, may search for, understand and then implement the advices provided by financial consultants and, consequently, show good financial management behaviors. Accordingly, we propose that:

Hypothesis 2: Investment advice use at time 2 (hereafter T2) will mediate the relationship between investment literacy at T1 and financial management behavior at T3.

Need for Cognitive Closure

Although some empirical studies have addressed the influence of personality on earning and saving, most of them have focused on psychological biases, self-control problems, procrastination ( Rahimi et al., 2016 ), future time perspective and risk tolerance ( Pak and Mahmood, 2015 ). However, other studies have called attention to the influence of relatively stable individual differences in information processing and complex decision making, such as the NCC ( Webster and Kruglanski, 1994 ).

Need for cognitive closure refers to the individual necessity of arriving to a clear and definitive opinion, or answer to a problem, and particularly any opinion or answer rather than experiencing confusion, ambiguity or inconsistency ( Webster and Kruglanski, 1994 ). Empirical research reports significant differences between people with high and low NCC; such differences concern the amount of information they can process, the intensity of that information, the rules employed in decision-making processes, and the self-confidence on the decisions that they reached ( De Dreu et al., 1999 ; Szumowska and Kossowska, 2017 ). Due to this characteristic, people with low NCC are more available to consider complex information that is difficult to process, such as financial information. They are also concerned about the loss of information and more oriented toward the accuracy of the response than to the speed with which it is reached. As a consequence, these people tend to consider more information and decide more slowly, to be more open minded and more creative. In contrast, people with high NCC are more likely to focus on information they can process easily, to reject the more complex or even incomplete one ( Livi et al., 2015 ), and less likely to consider new evidence and update their investments when changes in market uncertainty appear ( Disatnik and Steinhart, 2015 ).

Need for cognitive closure has been described as characterized by two different tendencies: the tendency of the urgency to achieve knowledge ( Seizing ) and the tendency to retain permanently that knowledge ( Freezing ) ( Roets et al., 2006 ). People with high NCC have a pressing desire to achieve closure and to retain it permanently. Thus, these people tend to limit the quantity of information to be processed in order to facilitate decision-making and then to retain and perpetuate the information on which they have based this judgment.

This pattern of information processing has been shown in a broad array of situations related to information processing and decision-making ( Dolinski et al., 2016 ), such as consumer purchasing choices, attitudes about complex technological products, suppliers’ purchasing decisions to manage business supply chains, or helping behavior, among others. Due to the fact that financial management behavior includes processing of complex information and the anticipation of needs with a high degree of uncertainty, we argue that individuals with high NCC will consider a limited amount of information provided by the financial consultant, and particularly information that solve their immediate needs; will revise or modify such information with some reluctance, and all this will result in a less efficient financial management behavior. In contrast, we expect that low NCC remain open to information provided by the consultant and, through the elaboration, integration and revision of such information, they will be more consistent and efficient in the management of their financial behavior. Accordingly, in the present study, we propose that:

Hypothesis 3: The relationship between investment literacy at T1 and financial management behavior at T3, mediated by investment advice use at T2, will be moderated by both NCC dimensions (seizing and freezing) at T1. Specifically, we expect the relationship between investment advice use (T2) and financial management behavior (T3) to be weaker for individuals with high levels of both NCC dimensions (T1) than for individuals with low levels of both NCC dimensions (T1).

Materials and Methods

Ethics statement.

The Institutional Ethics Committee of the first and second authors’ university (National Distance Education University, UNED) approved this research on May 4th, 2016.

Participants and Procedure

This study, with a three-wave design, was carried out with a sample of young, non-student, Spanish adults, who completed the questionnaires at three different moments (T1, T2, and T3), with an interval of 3 months between each one. Following Taris and Kompier (2016) suggestions, and due to the limited longitudinal studies available on these factors, the real time lag between these factors is unknown; considering literature and the processes under examination, we retain the 3 months as an appropriate period to explore such relations. Also, because the time-lag design contributes to control and counteract the common method variance ( Podsakoff et al., 2003 ). The T1 measurement was carried out in January–February. Participation in the study was voluntarily, and potential participants were informed about the anonymity, and all subjects gave their informed consent for inclusion before they participated in the study. The only inclusion criteria in the study were being younger than 40 years of age and having a paid job (being full time or part time active workers). A total 500 people were invited to participate at T1, but we only obtained 390 responses (78% response rate), and 304 responses at T2. At T3, the sample was reduced to 272 respondents, who are included in this study. The mean age of the participants at T1 was 26.3 years ( SD = 4.9), and at T3 mean age was 26.8 years. Men made up 40.4% of the sample. Average job seniority was 9.9 years ( SD = 6.6). In terms of educational level, 57% of the sample had received a university or similar level of education, 29% finished the Secondary School, and 11% had received only basic education. Professionally, 63.2% of participants were employees, 22.8% were middle managers, and full-time workers accounted for 91.9% of the sample, and the rest were employed part-time.

Instruments

Financial management behavior was assessed with the Financial Practices Scale ( Loibl et al., 2006 ), consisting of seven items that measure the probability of the participants’ adopting positive practices of financial management behaviors. The Likert-type response scale ranged from 1 ( unlikely ) to 5 ( very likely ). Examples of some items are: “Pay your bills on time every month”; “Start saving for emergencies”; “Develop a written plan for expenses”; “Have more organized records of payments.” The authors recommend adding the scores to create a global measure of financial management behavior. Reliability was α = 0.78 in the present study.

Investment literacy was appraised with the Financial Knowledge Scale , of Joo and Grable (2004) . This 10-item scale was designed to assess investors’ financial literacy. Higher scores indicate more knowledge. The original dichotomic response scale was transformed into a Likert-type response scale ranging between 1 ( strongly disagree ) and 5 ( strongly agree ). Examples of some items are: “Both employee and employer contribute to Social Security”; “Over a 20-year period, one is more likely to win than to lose money in the stock market”; “Interest paid on a credit card is deducted from taxes” (reversed score). Reliability was α = 0.81 in the present study.

Investment advice use was assessed using the Investment Advice Use Scale of Li et al. (2002) which contains eight items. The original four-point response scale, which ranges between 1 ( strongly disagree ) and 4 ( strongly agree ), was adapted to a five-point Likert-type format, with an intermediate rating for indifference ( neither disagree nor agree ). Examples of items are: “I prefer to consult with a specialist when I take financial decisions”; “I would be willing to pay for the advice of a financial expert”; “I feel qualified to make my own investment decisions without advisors” (reversed score). Reliability was α = 0.77 in the present study.

Need for cognitive closure was assessed with the Need for Cognitive Closure Scale , in its translated version ( Mannetti et al., 2002 ), adapted to Spanish by Ramelli (2011) . This scale has two factors: Seizing (predisposition to seek an immediate response when faced with uncertainty) and Freezing (predisposition to retain closure and avoid considering new information that might question it). The scale has 14 items that are rated with scores ranging between 1 ( strongly disagree ) and 5 ( strongly agree ). Reliability of the Spanish version was adequate, both in the original study (with α = 0.78; Ramelli, 2011 ), and in the present study (with α = 0.78). Examples of seizing (urgency) items are: “In case of uncertainty, I prefer to decide immediately, whatever it may be”; “When I have several potentially valid alternatives, I decide in favor of one quickly and without hesitation”; “After finding the solution to a problem, I think it is a waste of time to take other possible solutions into account.” Item examples of the freezing (permanence) dimension are: “I feel very uncomfortable when things are not in their proper place”; “I feel uncomfortable when I do not get a fast answer to a problem I face.” The NCC scale was subjected to Confirmatory Factor Analysis with Amos 24.0. The generalized least squares procedure was used. This two-factor CFA fitted the data reasonably well (χ 2 = 139.199, p < 0.000; df = 71, CMIN/df = 1.96; GFI = 0.93; AGFI = 0.90, RMSEA = 0.06).

All the factor loadings for the items exceed the 0.40 and both factor correlated as expected (0.72). Some covariances among error have been allowed due to the similarity of the item content, but in any case, between items included under the same factor. Factor loadings, and the Spanish formulation of items, are displayed in Table 1 .

TABLE 1. Need of Cognitive Closure Scale ( Ramelli, 2011 ) and factor loadings.

Analytic Strategy

In order to test the study hypotheses, we performed a linear regression analysis. Before testing the hypothesized moderated mediation model, the indirect and moderating effects were first tested separately with the PROCESS macros for SPSS 24 ( Hayes, 2013 ). With bootstrap procedures of 5,000 samples at a 95% confidence level, the confidence intervals that do not contain 0 indicate that the indirect effect is significant. We did not include any control variables in the following analyses.

Descriptive statistics and Pearson correlations between the study variables are provided in Table 2 . Investment literacy was positively and significantly associated both with investment advice use ( r = 0.19) and with financial management behavior ( r = 0.31), whereas investment advice use and financial management behavior showed the strongest correlation ( r = 0.41). The relation between freezing and financial management behavior reached statistical significance ( r = 0.16). NCC dimensions showed a positive relationship with each other ( r = 0.44).

TABLE 2. Descriptive statistics and correlation matrix.

Table 3 shows the results obtained when testing the first hypothesis. The linear regression analysis shows the total effect ( b = 0.17, p < 0.000) of investment literacy on financial management behavior [ R 2 = 0.22, F (2,269) = 37.54, p < 0.001].

TABLE 3. Regression results of testing the mediation of investment advice use (T2) in the relationships between investment literacy (T1) and financial management behavior (T3) (hypotheses 1 and 2).

Regarding the mediation of investment advice use in the relationship between investment literacy and financial management behavior, a significant and positive association between investment literacy and investment advice use ( b = 0.20, p < 0.000) was observed. Furthermore, a statistically significant direct effect of investment literacy on financial management behavior ( b = 0.16, p < 0.001) was found, as well as a statistical significant effect of investment advice use on financial management behavior ( b = 0.23, p < 0.001). Hence, there is a significant indirect effect of investment literacy on financial management behavior through investment advice use ( b = 0.05). Finally, we tested the significance of this mediation effect through the bootstrapping procedure, which showed that the confidence interval for the indirect effect does not contain zero [0.01, 0.09], supporting the significance of the mediation effect. These results provide reasonable confirmation of hypothesis 2.

Finally, we tested hypothesis 3 following the procedures recommended by Hayes (2013) , as shown in Table 4 .

TABLE 4. Results of testing the moderation of NCC (T1) on the investment advice use (T2) – financial management behavior relationship (T3) (hypothesis 3).

Firstly, Table 4 shows a negative direct effect between NCC – seizing and financial behavior ( b = -0.32, p < 0.05), which suggests that the higher the tendency to seek an immediate solution to solve an uncertainty, the lower the management of financial behavior. Secondly, upon testing hypothesis 3 regarding the moderating effect of seizing on the relationship between investment literacy and financial management behavior, mediated by investment advice use, we found a statistically significant positive interaction effect ( b = 0.12, p < 0.01). Thirdly, regarding the moderating effect of freezing on the relationship between investment literacy and financial management behavior, mediated by investment advice use, we also found a statistically significant positive interaction effect ( b = 0.12, p < 0.01). The index of moderated mediation for the seizing dimension was 0.024 ( SE = 0.013), while the 95% confidence interval with bootstrapping of 5,000 samples did not contain zero (Boot CI [0.003, 0.059]), and for the freezing dimension, the index was 0.023 ( SE = 0.013, Boot CI [0.002, 0.059]).

Hence, the data support hypothesis 3. The indirect conditional effects of investment literacy on financial management behaviors at the two levels of the moderators are displayed in Table 5 , where the effect of investment literacy on financial management behavior was strong at the high level of NCC (seizing and freezing), and it was correspondingly weak when NCC was low. The two effects are statistically significant although in the opposite direction that was expected.

TABLE 5. Results of testing moderated mediation of NCC dimensions in the relationship between investment literacy (T1) and financial management behavior (T3).

Figures 1 , 2 depict the moderation effect of both NCC dimensions. What they show is not consistent with our expectations: individuals reporting higher investment advice use also showed a greater level of financial management behavior if they were characterized by high NCC-seizing at T1 (see Figure 1 ).

FIGURE 1. Moderation of NCC-Seizing (T1) on the investment advice use (T2) – financial management behavior (T3) relationship.

FIGURE 2. Moderation of NCC-Freezing (T1) on the investment advice use (T2) – financial management behavior (T3) relationship.

Also, contrary to our expectations, respondents reporting higher investment advice use at T2 showed a greater level of financial management behavior at T3 if they were characterized by high NCC freezing at T1 (see Figure 2 ).

Taken together, this result implies that investment advice use (T2) mediates more strongly the relationship between investment literacy (T1) and financial management behavior (T3) for young adults characterized by moderate to high levels of NCC (T1) than in adults with lower levels of NCC (T1). These results are depicted in Figure 3 .

FIGURE 3. Results of the moderated mediation analysis. NCC, need for cognitive closure; [95% CI]; ∗ p < 0.05, ∗∗ p < 0.01, ∗∗∗ p < 0.001. Values in italics: correspond to the Freezing dimension.

The present work supports the hypothesis that investment literacy may affect subsequent financial management behavior in young, financially independent, adults. These findings corroborate the key assumption of a long research tradition that links financial literacy with the improvement of financial management behavior. In addition, the present investigation suggests that efficacious financial management should not be conceived as only a mere consequence of knowledge and confidence to use it, but rather as the outcome of the joint influence of cognitive aspects and social influences that affect individuals. In fact, in the present work, the impact of investment literacy on financial management behavior is explained by the use of investment advices provided, in a social communication exchange, by a financially expert advisor. Therefore, the present study has focused on facets predominantly studied in current economic psychology ( Webley et al., 2002 ).

Following the growing number of works suggesting that personality traits affect financial behavior beyond the influence of people’s knowledge and external factors ( Norvilitis et al., 2006 ; Warmoth et al., 2016 ), this work shows that NCC plays a moderating role in the relation between investment literacy and financial management behavior, mediated by investment advice use. Thus, our evidence shows how the personal tendencies of seizing and freezing influence predictors of financial management behavior. On this regard, results show a two side picture. From one side, as we expected, seizing is negatively related to financial behavior; which suggests that individuals with higher tendency to reach quickly a knowledge, a solution to some financial problem, the lower the rate of financial practices. On the other side, contrary to our expectations, individuals that look for financial advice and with high NCC, both for seizing a solution and for freezing it, probably accept quickly the suggestion from the advisor and start to implement it consistently and repeatedly, thus improving their financial performance, in comparison to individuals with lower NCC that may take longer to implement the advice provided by the financial advisor.

This work presents a new viewpoint of how to improve financial behavior among youth and, therefore, can contribute to increasing the efficacy of early interventions to develop responsible financial behavior ( Gariepy et al., 2017 ). Firstly, confirming previous studies (e.g., Calcagno and Monticone, 2011; Collins, 2012 ), it seems that to benefit of financial advice it is, at least, useful (if not, necessary), to have a good level of financial literacy. Thus, educational, social and political systems should consider how to create opportunities for young adolescents to experience and practice financial competences. Secondly, in this same line, intervention strategies should be oriented toward increasing the coherence between knowledge, expert advice, and financial management behaviors to practice the specific behaviors of saving and investment during young adulthood. Translating this into concrete practices, early assessment of people’s tendencies of Seizing and Freezing could help to recognize these early propensities and their potential bias in the processing of financial information. For example, special attention should be paid during adolescence to these psychological traits to help people develop strategies that compensate these tendencies and reduce their potential negative impact on processes of making complex decisions which may require more time for the analysis and processing of more complex information ( Gerlach, 2017 ). Following these recommendations, parents and educators can develop training programs specifically designed to offset those biases.

Thirdly, while the relationship between investment advice use and financial management behavior is not questionable, the present findings indicate that the quality and quantity of the effects are influenced by employees’ NCC tendencies. According to the present findings, financial advisors might rely upon a complementary tool to increase the efficacy of their interventions. In particular, by monitoring the level of NCC of investors, they may provide some customized services. This would support the idea that not all the products or services fit all the customers, but rather that professionals should fine tune their work in relation to investors’ need to remain open or to close and fix the financial suggestions that are provided. If high NCC individuals might be efficient in implementing easily and quickly the advices provided to them, it is also necessary to remind them of the need to continue to search regularly the advices, to update, and modify financial choices that might become outdated and no more matching the financial situation of the market. In comparison, they must present much wider and more complex financial solutions to low NCC investors, to satisfy their need for extended information processing and thus, facilitate their passage to the actual and concrete financial behavior.

This study presents some limitations that should be considered. Firstly, even though we have considered some cognitive, social, and personality variables in accordance with Huston (2010) model, many other variables could have been considered and should be considered in future research. When referring to long-term economic planning, young workers’ expectations about occupational security, career development, promotion, and progress might also influence their financial management behavior ( Ekici and Koydemir, 2016 ).

Secondly, in this study we measured financial management behavior by tapping participants’ perceptions of their behavior; future studies should include real daily behaviors (e.g., checking one’s bank account, making a monthly budget, controlling credit card expenditures), for example, using research procedures like day reconstruction methods or experience sampling.

Thirdly, in this study we used a 3 months’ lag time between each wave and the following. This lag time allowed anyway to detect a significant relationship between financial literacy and use of financial advice, and between this latter and financial behavior. However, time between waves might be extended to investigate how long is the effect of financial literacy on investment advice, and especially how long such advices may affect financial performance. Fourthly, another limitation is that investment literacy was included only at a first point in time, precluding the possibility of establishing the reverse causation between behavior and knowledge. A research design including the same three variables in each wave, will allow to investigate if, for instance, it is an underperforming financial situation to stimulate the search of financial advices.

Fifthly, in this study, we did not deal with attitudes toward financial professionals, such as customers’ trust and anxiety when consulting them ( Grable et al., 2015 ). In future studies, one might directly ask participants what they think and feel about their financial advisors and incorporate this information as a moderating variable.

Finally, financial literacy studies in general showed another limitation that is due to the well-known association between lower literacy with poor health, low income, and other undesirable outcomes but, as with the present findings on financial management behavior, there is not enough evidence to support any causal direction ( Ma, 2016 ). To date, little is known about the causes and correlates of wrong financial decisions during the life course ( Budowski et al., 2016 ). This kind of knowledge needs to be improved, despite the difficulty of obtaining information from the participants regarding their wealth, financial literacy, and consumer behaviors, and this study does not escape to similar challenges and gaps in data ( Manske et al., 2016 ).

However, this investigation can provide some suggestions to guide future research. First, although we did not examine the impact of gender on financial literacy and financial behavior, it seems that gender differences are related to the quality of financial decisions, even though women’s levels of financial literacy and economic income have improved regarding past decades ( Heilman and Kusev, 2017 ). Therefore, investigating the relationship between gender and NCC could help educators in general, and financial advisors, to design intervention strategies to help women to achieve efficacious financial management ( Rudzinska-Wojciechowska, 2017 ).

Second, research seems to indicate that NCC and risk intolerance are associated. Specifically, risk intolerance is a widely studied variable in the financial setting, but the antecedents of intolerance of risk and ambiguity are still unclear. Therefore, a possible link with NCC could be analyzed, as has been shown in an experimental study ( Vermeir and van Kenhove, 2005 ).

Third, research indicates that executive functions such as impulse control, attention regulation or mental flexibility could be linked to NCC ( Dolinski et al., 2016 ) and to performance in complex tasks and financial well-being. However, recent studies related to the executive functions show that they develop throughout adolescence. Accordingly, early intervention with youth could contribute to improving these cognitive functions, with their consequent influence on NCC and subsequent benefit for the management of complex behaviors, like finances ( Barnhoorn et al., 2016 ; Urquijo et al., 2016 ).

Lastly, NCC and its correlates of ambiguity intolerance and risk aversion have always been analyzed from an individual perspective. However, recent works propose the possible influence of social comparison in decision making in general and, specifically, in risk-taking behavior ( Wang et al., 2016 ). In this sense, it would be interesting to analyze in future works the influence of the social gains of decisions and their possible interaction with the decision-makers’ NCC.

Financial literacy and decision making should be further explored to better understand how health and well-being are influenced by them during the life course. This research could help societies and policy makers to reduce the considerable economic and public health challenge that posed fast population aging, associated with low financial knowledge and overconfident decision making ( Khan et al., 2016 ). Ultimately, such data will guide interventions to improve literacy and promote independence, wealth, health, and well-being among people from young adulthood to old age.

Author Contributions

GT, MH-S, and SZ designed the research, analyzed the data, and wrote and revised the manuscript. GT collected the data.

Conflict of Interest Statement

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Barnhoorn, J. S., Döhring, F. R., Van Asseldonk, E. H., and Verwey, W. B. (2016). Similar representations of sequence knowledge in young and older adults: a study of effector independent transfer. Front. psychol. 7:1125. doi: 10.3389/fpsyg.2016.01125

PubMed Abstract | CrossRef Full Text | Google Scholar

Budowski, M., Schief, S., and Sieber, R. (2016). Precariousness and quality of life—a qualitative perspective on quality of life of households in precarious prosperity in Switzerland and Spain. Appl. Res. Qual. Life 11, 1035–1058. doi: 10.1007/s11482-015-9418-7

CrossRef Full Text | Google Scholar

Collins, J. M. (2012). Financial advice: a substitute for financial literacy? Financ. Serv. Rev. 21, 307–322. doi: 10.2139/ssrn.2046227

Consumer Financial Protection Bureau. (2015). Financial Well-Being: The Goal Of Financial Education. Available on: consumerfinance.gov/data-research/research-reports/financial-well-being.

Google Scholar

De Dreu, C. K., Koole, S. L., and Oldersma, F. L. (1999). On the seizing and freezing of negotiator inferences: need for cognitive closure moderates the use of heuristics in negotiation. Per. Soc. Psychol. Bull. 25, 348–362. doi: 10.1177/0146167299025003007

Disatnik, D., and Steinhart, Y. (2015). Need for cognitive closure, risk aversion, uncertainty changes, and their effects on investment decisions. J. Mark. Res. 52, 349–359. doi: 10.1509/jmr.13.0529

Dolinski, D., Dolinska, B., and Bar-Tal, Y. (2016). Need for closure moderates the break in the message effect. Front. Psychol. 7:1879. doi: 10.3389/fpsyg.2016.01879

Ekici, T., and Koydemir, S. (2016). Income expectations and happiness: evidence from British panel data. Appl. Res. Qual. Life 11, 539–552. doi: 10.1007/s11482-014-9380-9

Fenton, R., Nyamukapa, C., Gregson, S., Robertson, L., Mushati, P., Thomas, R., et al. (2016). Wealth differentials in the impact of conditional and unconditional cash transfers on education: findings from a community-randomized controlled trial in Zimbabwe. Psychol. Health Med. 21, 909–917. doi: 10.1080/13548506.2016.1140903

Fernandes, D., Lynch, J. G. Jr., and Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Manag. Sci. 60, 1861–1883. doi: 10.1287/mnsc.2013.1849

Gariepy, G., Elgar, F. J., Sentenac, M., and Barrington-Leigh, C. (2017). Early-life family income and subjective well-being in adolescents. PLoS One 12:e0179380. doi: 10.1371/journal.pone.0179380

Gerlach, P. (2017). The games economists play: why economics students behave more selfishly than other students. PLoS One 12:e0183814. doi: 10.1371/journal.pone.0183814

Grable, J., Heo, W., and Rabbani, A. (2015). Financial anxiety. physiological arousal, and planning intention. J. Financ. Ther. 5:2. doi: 10.4148/1944-9771.1083

Hayes, A. F. (2013). Introduction To Mediation, Moderation, And Conditional Process Analysis: A Regression-Based Approach. New York, NY: Guilford Press.

Heilman, R., and Kusev, P. (2017). The gender pay gap: can behavioral economics provide useful insights? Front. Psychol. 8:95. doi: 10.3389/fpsyg.2017.00095

Huston, S. J. (2010). Measuring financial literacy. J. Consum. Aff. 44, 296–316. doi: 10.1111/j.1745-6606.2010.01170.x

Joo, S., and Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. J. Fam. Econ. Issues 25, 25–50. doi: 10.1023/B:JEEI.0000016722.37994.9f

Jorgensen, B. L., and Savla, J. (2010). Financial literacy of young adults: the importance of parental socialization. Fam. Relat. 59, 465–478. doi: 10.1111/j.1741-3729.2010.00616.x

Khan, H. N., Khan, M. A., Razli, R. B., Shehzada, G., Krebs, K. L., and Sarvghad, N. (2016). Health care expenditure and economic growth in SAARC countries (1995–2012): a panel causality analysis. Appl. Res. Qual. Life 11, 639–661. doi: 10.1007/s11482-015-9385-z

Kruger, J., and Dunning, D. (1999). Unskilled and unaware of it: how difficulties in recognizing one’s own incompetence lead to inflated self-assessments. J. Pers. Soc. Psychol. 77, 1121–1134. doi: 10.1037/0022-3514.77.6.1121

Lee, J. C., and Mortimer, J. T. (2009). Family socialization, economic self-efficacy, and the attainment of financial independence in early adulthood. Longit. Life Course Stud. 1, 45–62.

PubMed Abstract | Google Scholar

Li, Y. M., Lee, J., and Cude, B. J. (2002). Intention to adopt on line trading: identifying the future online traders. Financ. Counsel. Plann. 13, 49–64.

Livi, S., Kruglanski, A., Pierro, A., Mannetti, L., and Kenny, D. (2015). Epistemic motivation and perpetuation of group culture. Effects of need for cognitive closure on trans-generational norm transmission. Organ. Behav. Hum. Decis. Process. 129, 105–112. doi: 10.1016/j.obhdp.2014.09.010

Loibl, C., Hira, T. K., and Rupured, M. (2006). First time versus repeat filers. The likelihood of completing a Chapter 13 bankruptcy repayment plan. Financ. Counsel. Plann. 17, 23–33.

Ma, K. R. (2016). Intergenerational transmission of wealth and life satisfaction. Appl. Res. Qual. Life 11, 1287–1308. doi: 10.1007/s11482-015-9437-4

Mannetti, L., Pierro, A., Kruglanski, A., Taris, T., and Bezinovic, P. (2002). A cross-cultural study of the need for cognitive closure scale: comparing its structure in Croatia, Italy, USA and The Netherlands. Br. J. Soc. Psychol. 41, 139–156. doi: 10.1348/014466602165108

Manske, K., Schmitz, F., and Wilhelm, O. (2016). Individual differences in financial decision making. Pers. Individ. Dif. 101:497. doi: 10.1016/j.paid.2016.05.221

Norvilitis, J. M., Merwin, M. M., Osberg, T. M., Roehling, P. V., Young, P., and Kamas, M. M. (2006). Personality factors, money attitudes, financial knowledge, and credit-card debt in college students1. J. Appl. Soc. Psychol. 36, 1395–1413. doi: 10.1111/j.0021-9029.2006.00065.x

Pak, O., and Mahmood, M. (2015). Impact of personality on risk tolerance and investment decisions. Int. J. Commer. Manag. 25, 370–384. doi: 10.1108/IJCoMA-01-2013-0002

Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., and Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. J. Appl. Psychol. 88, 879–903. doi: 10.1037/0021-9010.88.5.879

Rahimi, S., Hall, N. C., and Pychyl, T. A. (2016). Attributions of responsibility and blame for procrastination behavior. Front. Psychol. 7:1179. doi: 10.3389/fpsyg.2016.01179

Ramelli, M. (2011). Construyendo Una Nueva Realidad Bicultural: Impacto Del Grupo De Referencia Inicial, De La Necesidad De Clausura Cognitiva Y De La Eficacia Comunicativa [Building A New Bicultural Reality: Impact Of The Initial Reference Group, The Need For Cognitive Closure And Communicative Efficacy]. Ph.D. thesis. University of Basilea, Basel.

Roets, A., Van Hiel, A., and Cornelis, I. (2006). The dimensional structure of the need for cognitive closure scale: relationships with “seizing” and “freezing” processes. Soc. Cogn. 24, 22–45. doi: 10.1521/soco.2006.24.1.22

Rudzinska-Wojciechowska, J. (2017). If you want to save, focus on the forest rather than on trees. the effects of shifts in levels of construal on saving decisions. PloS one 12:e0178283. doi: 10.1371/journal.pone.0178283

Szumowska, E., and Kossowska, M. (2017). Need for cognitive closure and attention allocation during multitasking: evidence from eye-tracking studies. Pers. Individ. Dif. 111, 272–280. doi: 10.1016/j.paid.2017.02.014

Taris, T., and Kompier, M. (2016). “Cause and effect: optimizing the designs of longitudinal studies in occupational health psychology,” in Longitudinal Research in Occupational Health Psychology , ed. T. W. Taris (Abingdon: Routledge).

Urquijo, I., Extremera, N., and Villa, A. (2016). Emotional intelligence, life satisfaction, and psychological well-being in graduates: the mediating effect of perceived stress. Appl. Res. Qual. Life 11, 1241–1252. doi: 10.1007/s11482-015-9432-9

Vermeir, I., and van Kenhove, P. V. (2005). The influence of need for closure and perceived time pressure on search effort for price and promotional information in a grocery shopping context. Psychol. Mark. 22, 71–95. doi: 10.1002/mar.20047

Wang, D., Zhu, L., Maguire, P., Liu, Y., Pang, K., Li, Z., et al. (2016). The influence of social comparison and peer group size on risky decision-making. Front. Psychol. 7:1232. doi: 10.3389/fpsyg.2016.01232

Warmoth, K., Tarrant, M., Abraham, C., and Lang, I. A. (2016). Older adults’ perceptions of ageing and their health and functioning: a systematic review of observational studies. Psycho. Health Med. 21, 531–550. doi: 10.1080/13548506.2015.1096946

Webley, P., Burgoyne, C., Lea, S., and Young, B. (2002). The Economic Psychology of Everyday Life. Hove: Psychology Press.

Webster, D. M., and Kruglanski, A. W. (1994). Individual differences in need for cognitive closure. J. Pers. Soc. Psychol. 67, 1049–1062. doi: 10.1037/0022-3514.67.6.1049

Keywords : financial management behavior, investment literacy, investment advice use, need for cognitive closure, retirement, retirement planning

Citation: Topa G, Hernández-Solís M and Zappalà S (2018) Financial Management Behavior Among Young Adults: The Role of Need for Cognitive Closure in a Three-Wave Moderated Mediation Model. Front. Psychol. 9:2419. doi: 10.3389/fpsyg.2018.02419

Received: 26 July 2018; Accepted: 16 November 2018; Published: 30 November 2018.

Reviewed by:

Copyright © 2018 Topa, Hernández-Solís and Zappalà. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) . The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

*Correspondence: Gabriela Topa, [email protected]

Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.

Financial Management Research Paper Topics

Financial management research paper topics have emerged as an essential part of contemporary education in business and economics. As financial management continues to evolve with global economic changes, the need for research and analysis in this area grows. This article provides a comprehensive guide for students who study management and are assigned to write research papers on various aspects of financial management. From understanding the diverse topics to learning how to write an impactful research paper, this page offers valuable insights. Additionally, it introduces iResearchNet’s writing services, specifically tailored to assist students in achieving academic excellence. The content is structured to guide students through topic selection, writing, and leveraging professional services to meet their academic goals. Whether a novice or an advanced student of financial management, this resource offers a multifaceted perspective on the vast and dynamic field of financial management research.

100 Financial Management Research Paper Topics

The field of financial management offers a vast array of research paper topics. This complex discipline touches every aspect of business operations, influencing strategic planning, decision-making, and organizational growth. Below, you will find a comprehensive list of financial management research paper topics, divided into 10 categories. Each category offers 10 unique topics that cater to various interests within financial management. These topics have been carefully selected to reflect the richness and diversity of the subject.

Academic Writing, Editing, Proofreading, And Problem Solving Services

Get 10% off with 24start discount code, financial planning and control.

• The Role of Budgeting in Financial Planning
• Strategic Financial Management in SMEs
• The Impact of Working Capital Management on Profitability
• Ethical Considerations in Financial Planning
• Risk Management in Financial Planning
• Cost Control Techniques in Manufacturing
• Financial Decision-making Processes in Non-profit Organizations
• The Impact of Inflation on Financial Planning
• International Financial Planning Strategies
• The Relationship between Corporate Governance and Financial Planning

Investment Analysis and Portfolio Management

• The Efficient Market Hypothesis: A Critical Analysis
• The Role of Behavioral Finance in Investment Decisions
• Modern Portfolio Theory and Its Limitations
• Risk and Return Analysis in Emerging Markets
• Socially Responsible Investment Strategies
• The Impact of Political Instability on Investment Decisions
• Real Estate Investment Trusts (REITs): An In-depth Study
• Impact of Technology on Portfolio Management
• Mutual Funds vs. ETFs: A Comparative Study
• The Role of Artificial Intelligence in Investment Management

Corporate Finance

• Capital Structure Decisions in Startups
• The Role of Dividends in Corporate Financial Management
• Mergers and Acquisitions: Strategic Financial Analysis
• Corporate Financing in Developing Economies
• An Analysis of Venture Capital Financing
• The Impact of Corporate Social Responsibility on Financial Performance
• The Role of Financial Management in Business Turnaround Strategies
• Debt Financing vs. Equity Financing: A Comparative Analysis
• Corporate Financial Risk Management Strategies
• Financing Innovation: Challenges and Opportunities

International Financial Management

• Exchange Rate Dynamics and International Financial Decisions
• The Role of International Financial Institutions in Economic Development
• Cross-border Mergers and Acquisitions
• Globalization and Its Impact on Financial Management
• International Tax Planning Strategies
• Challenges in Managing International Financial Risk
• Currency Risk Management in Multinational Corporations
• International Capital Budgeting Decisions
• The Impact of Cultural Differences on International Financial Management
• Foreign Direct Investment Strategies and Financial Management

Financial Markets and Institutions

• The Role of Central Banks in Financial Stability
• The Evolution of Microfinance Institutions
• The Impact of Regulation on Banking Operations
• An Analysis of Stock Market Efficiency
• Financial Derivatives and Risk Management
• The Role of Technology in Financial Services
• A Study of Financial Crises and Regulatory Responses
• Peer-to-Peer Lending Platforms: A New Paradigm
• The Role of Credit Rating Agencies in Financial Markets
• The Future of Cryptocurrency in the Financial Landscape

Personal Finance Management

• Financial Literacy and Personal Investment Decisions
• The Role of Technology in Personal Finance Management
• Retirement Planning Strategies
• Impact of Consumer Behavior on Personal Financial Decisions
• Personal Finance Management in the Gig Economy
• A Study of Personal Bankruptcy Trends
• Credit Card Management Strategies for Individuals
• The Effect of Education on Personal Financial Management
• The Role of Financial Counseling in Personal Finance
• Estate Planning: A Comprehensive Analysis

Risk Management

• Enterprise Risk Management: A Strategic Approach
• The Role of Insurance in Financial Risk Management
• Financial Innovations in Risk Management
• A Study of Credit Risk Management in Banks
• Risk Management Strategies in Supply Chain Finance
• Cyber Risk Management in Financial Institutions
• The Impact of Climate Change on Financial Risks
• A Study of Operational Risk Management in the Healthcare Sector
• Behavioral Aspects of Risk Management
• Crisis Management and Financial Stability

Financial Technology (FinTech)

• The Rise of Blockchain Technology in Finance
• The Impact of FinTech on Traditional Banking
• Regulatory Challenges in the Age of FinTech
• Financial Inclusion through FinTech Innovation
• Artificial Intelligence in Financial Services
• The Future of Cryptocurrencies: Opportunities and Risks
• A Study of Peer-to-Peer Lending Platforms
• FinTech and Consumer Privacy: Ethical Considerations
• Mobile Banking: An Evolutionary Study
• The Role of Big Data Analytics in Financial Decision Making

Ethics and Sustainability in Finance

• Ethical Investing: Trends and Challenges
• Corporate Social Responsibility Reporting in Finance
• Sustainable Finance in Emerging Economies
• Environmental, Social, and Governance (ESG) Criteria in Investment
• The Impact of Business Ethics on Financial Performance
• The Role of Sustainability in Corporate Financial Strategy
• Green Bonds and Financing Sustainable Development
• Social Impact Investing: Opportunities and Challenges
• A Study of Gender Equality in Financial Institutions
• Financial Strategies for Achieving Sustainable Development Goals

Accounting and Finance

• Forensic Accounting: Techniques and Case Studies
• The Role of Management Accounting in Financial Decision-making
• International Financial Reporting Standards (IFRS) Adoption
• The Impact of Taxation on Financial Management
• Accounting Information Systems: An In-depth Analysis
• The Role of Auditing in Corporate Governance
• Accounting Ethics: A Study of Professional Conduct
• Environmental Accounting and Sustainable Development
• The Effect of Automation on Accounting Practices
• A Comparative Study of GAAP and IFRS

The extensive list above offers a broad spectrum of financial management research paper topics. They cater to different academic levels and areas of interest, providing a wealth of opportunities for students to explore the multi-dimensional world of financial management. The selection of these topics can lead to exciting discoveries and insights, pushing the boundaries of existing knowledge in the field. Whether it’s understanding the intricate dynamics of global finance or delving into the ethical considerations in investment decisions, these topics serve as starting points for thought-provoking research that can shape future practices in financial management. By choosing a topic from this comprehensive list, students embark on a journey of intellectual exploration that can contribute to both academic success and the broader understanding of financial management in the modern world.

Financial Management and the Range of Research Paper Topics

Financial management is a multifaceted discipline that stands at the intersection of economics, business administration, and finance. It governs the planning, organizing, directing, and controlling of financial activities within an organization or individual framework. In an ever-changing global economy, the importance of financial management cannot be overstated. It empowers organizations and individuals to make informed decisions, manage risks, and achieve financial stability and growth. This article delves into the vast domain of financial management and explores the wide array of research paper topics it offers.

A. Definition and Core Concepts of Financial Management

Financial management refers to the efficient and effective management of money to achieve specific objectives. It involves processes and tasks such as budgeting, forecasting, investment analysis, risk management, and financial reporting. The primary goals are to maximize shareholder value, ensure liquidity, and maintain solvency.

• Budgeting and Forecasting : These processes involve planning and estimating future financial needs and outcomes. They guide decision-making and help in aligning resources with organizational goals.
• Investment Analysis : This includes evaluating investment opportunities and determining the most profitable and sustainable investments.
• Risk Management : This aspect focuses on identifying, evaluating, and mitigating financial risks, including market risk, credit risk, and operational risk.
• Financial Reporting : This entails the preparation and presentation of financial statements that accurately reflect the financial position of an organization.

B. Importance of Financial Management

• Ensuring Financial Stability : Effective financial management helps in maintaining the financial health of an organization or individual by ensuring a balance between income and expenditure.
• Optimizing Resources : It enables the optimal utilization of resources by aligning them with short-term and long-term goals.
• Strategic Planning : Financial management plays a key role in strategic planning by providing insights into financial capabilities and constraints.
• Enhancing Profitability : By making informed investment and operational decisions, financial management enhances the profitability of an organization.

C. Modern Trends and Challenges in Financial Management

The evolution of technology, globalization, regulatory changes, and societal expectations have shaped modern financial management. Some noteworthy trends and challenges include:

• Financial Technology (FinTech) : The integration of technology into financial services has revolutionized banking, investing, and risk management.
• Globalization : The interconnectedness of global markets presents both opportunities and challenges in managing international financial operations.
• Sustainability and Ethics : The growing focus on environmental, social, and governance (ESG) criteria has led to ethical investing and sustainable finance.
• Regulatory Compliance : Navigating the complex regulatory landscape is a challenge that requires constant adaptation and vigilance.

D. Range of Research Paper Topics in Financial Management

The vastness of financial management offers a rich source of research paper topics. From exploring the intricacies of investment analysis to understanding the ethical dimensions of finance, the possibilities are endless. The following are some broad categories:

• Corporate Finance : Topics related to capital structure, mergers and acquisitions, dividend policies, and more.
• Investment and Portfolio Management : Including research on investment strategies, portfolio optimization, risk and return analysis, etc.
• International Financial Management : This encompasses studies on exchange rate dynamics, global financial strategies, cross-border investments, etc.
• Risk Management : Topics include various risk management techniques, insurance, financial innovations in risk management, etc.
• Personal Finance Management : This field covers financial planning for individuals, retirement strategies, credit management, etc.
• Financial Technology : Blockchain, cryptocurrencies, mobile banking, and more fall under this innovative domain.
• Ethics and Sustainability in Finance : Research in this area may focus on ethical investing, corporate social responsibility, green financing, etc.

Financial management is an expansive and dynamic field that intertwines various elements of finance, economics, and business administration. Its importance in today’s world is immense, given the complexities of the global financial system. The array of research paper topics that this subject offers is indicative of its diversity and depth.

From traditional concepts like budgeting and investment analysis to modern phenomena like FinTech and sustainability, the world of financial management continues to evolve. It invites scholars, practitioners, and students to explore, question, and contribute to its understanding.

The range of research paper topics in financial management offers avenues for academic inquiry and practical application. Whether it’s investigating the effects of globalization on financial strategies or exploring personal finance management in the gig economy, there’s a topic to spark curiosity and inspire research. These research endeavors not only enrich academic literature but also play a crucial role in shaping the future of financial management. In a rapidly changing world, continuous exploration and learning in this field are essential to remain relevant, innovative, and responsible.

How to Choose Financial Management Research Paper Topics

Choosing the right research paper topic in the field of financial management is a critical step in the research process. The chosen topic can shape the direction, depth, and impact of the research. Given the wide array of subfields within financial management, selecting a suitable topic can be both exciting and challenging. Here’s a comprehensive guide to assist you in choosing the ideal financial management research paper topic.

1. Understand Your Interest and Strengths

• Assess Your Interests : Consider what aspects of financial management intrigue you the most. Your enthusiasm for a subject can greatly enhance the research process.
• Identify Your Strengths : Understanding where your skills and knowledge lie can guide you towards a topic that you can explore competently.
• Connect with Real-world Issues : Relating your interests to current industry challenges or trends can make your research more relevant and engaging.

2. Consider the Scope and Depth

• Define the Scope : A clear understanding of the scope helps in keeping the research focused. Too broad a topic can make the research vague, while too narrow may limit your exploration.
• Determine the Depth : Decide how deep you want to delve into the topic. Some subjects may require extensive quantitative analysis, while others may be more theoretical.

3. Examine Academic and Industry Relevance

• Align with Academic Requirements : Ensure that the topic aligns with your course objectives and academic requirements.
• Analyze Industry Needs : Consider how your research could contribute to the industry or address specific financial management challenges.

4. Evaluate Available Resources and Data

• Assess Data Accessibility : Ensure that you can access the necessary data and information to conduct your research.
• Consider Resource Limitations : Be mindful of the time, financial, and technological resources that you’ll need to complete your research.

5. Review Existing Literature

• Analyze Previous Research : Review related literature to identify gaps, controversies, or emerging trends that you can explore.
• Avoid Duplication : Ensure that your chosen topic is unique and not merely a repetition of existing studies.

6. Consult with Experts and Peers

• Seek Guidance from Faculty : Consulting with faculty or mentors can provide valuable insights and direction.
• Collaborate with Peers : Discussions with classmates or colleagues can help in refining ideas and getting diverse perspectives.

7. Consider Ethical Implications

• Evaluate Ethical Considerations : Ensure that your research complies with ethical guidelines, especially if it involves human subjects or sensitive data.
• Reflect on Social Impact : Consider how your research might influence society, policy, or industry standards.

8. Test the Feasibility

• Conduct a Preliminary Study : A small-scale preliminary study or analysis can help in gauging the feasibility of the research.
• Set Realistic Goals : Ensure that your research objectives are achievable within the constraints of time, resources, and expertise.

9. Align with Career Goals

• Consider Future Applications : Think about how this research might align with your career goals or professional development.
• Build on Past Experience : Leveraging your past experiences or projects can lend depth and continuity to your research.

10. Stay Flexible and Adaptable

• Be Open to Change : Research is often an iterative process; being flexible allows for adaptation as new insights or challenges emerge.
• Maintain a Balanced Perspective : While focusing on your chosen topic, keep an open mind to interrelated areas that might enrich your research.

Choosing the right financial management research paper topic is a nuanced process that requires careful consideration of various factors. From understanding personal interests and academic needs to evaluating resources, ethics, and feasibility, each aspect plays a significant role in shaping the research journey.

By following this comprehensive guide, students can navigate the complexities of selecting a suitable research paper topic in financial management. The ultimate goal is to find a topic that resonates with one’s interests, aligns with academic and professional objectives, and contributes meaningfully to the field of financial management. Whether delving into the dynamics of risk management or exploring the impact of FinTech innovations, the chosen topic should be a catalyst for inquiry, creativity, and growth.

How to Write a Financial Management Research Paper

Writing a research paper on financial management is a rigorous process that demands a thorough understanding of financial concepts, analytical skills, and adherence to academic standards. From selecting the right topic to presenting the final piece, each step must be methodically planned and executed. This section provides a comprehensive guide to help students craft an impactful financial management research paper.

1. Understand the Assignment

• Read the Guidelines : Begin by understanding the specific requirements of the assignment, including formatting, length, deadlines, and the expected structure.
• Clarify Doubts : If any aspect of the assignment is unclear, seek clarification from your instructor or mentor to avoid mistakes.

2. Choose a Strong Topic

• Identify Your Interest : Select a topic that interests you, aligns with your strengths, and meets academic and industry relevance. Refer to the previous section for detailed guidelines on choosing a topic.

3. Conduct Extensive Research

• Explore Varied Sources : Use academic journals, textbooks, online databases, and industry reports to gather diverse perspectives and evidence.
• Evaluate the Credibility : Ensure that the sources are credible, relevant, and up-to-date.
• Organize Your Findings : Maintain well-organized notes, including source citations, to facilitate smooth writing later.

4. Develop a Thesis Statement

• Define Your Focus : Craft a clear and concise thesis statement that outlines the central argument or purpose of your research.
• Align with the Evidence : Ensure that your thesis is well-supported by the evidence you have gathered.

5. Create an Outline

• Structure Your Paper : Plan the structure of your paper, including the introduction, body, and conclusion.
• Organize Ideas : Arrange your ideas, arguments, and evidence logically within the outline.

6. Write a Compelling Introduction

• Introduce the Topic : Provide background information and context to the reader.
• Present the Thesis : Clearly state your thesis to guide the reader through your research.
• Engage the Reader : Use compelling language to create interest in your study.

7. Develop the Body of the Paper

• Present Your Arguments : Use clear and concise paragraphs to present each main idea or argument.
• Support with Evidence : Include relevant data, charts, graphs, or quotations to support your claims.
• Use Subheadings : Subheadings can help in organizing the content and making it more reader-friendly.

8. Include Financial Analysis

• Apply Financial Models : Use relevant financial models, theories, or frameworks that pertain to your topic.
• Perform Quantitative Analysis : Utilize statistical tools, if necessary, to analyze financial data.
• Interpret the Results : Ensure that you not only present the numbers but also interpret what they mean in the context of your research.

9. Write a Thoughtful Conclusion

• Summarize Key Points : Recap the main arguments and findings of your paper.
• Restate the Thesis : Reiterate your thesis in light of the evidence presented.
• Provide Insights : Offer insights, implications, or recommendations based on your research.

10. Revise and Edit

• Review for Clarity : Read through the paper to ensure that the ideas flow logically and the arguments are well-articulated.
• Check for Errors : Look for grammatical, spelling, and formatting errors.
• Seek Feedback : Consider getting feedback from peers, tutors, or mentors to enhance the quality of your paper.

11. Follow Formatting Guidelines

• Adhere to Citation Style : Follow the required citation style (APA, MLA, etc.) consistently throughout the paper.
• Include a Bibliography : List all the references used in the research in a properly formatted bibliography.
• Add Appendices if Needed : Include any supplementary material like data sets or additional calculations in the appendices.

Writing a financial management research paper is a complex task that demands meticulous planning, diligent research, critical analysis, and clear communication. By adhering to these detailed guidelines, students can craft a research paper that not only meets academic standards but also contributes to the understanding of intricate financial management concepts.

Whether exploring investment strategies, corporate finance, or financial risk management, a well-crafted research paper showcases one’s analytical capabilities, comprehension of financial principles, and the ability to apply theoretical knowledge to real-world scenarios. It is an invaluable exercise in intellectual exploration and professional development within the realm of financial management.

iResearchNet Writing Services

For custom financial management research paper.

For students who are striving to excel in their academic journey, but are grappling with the challenges of creating a robust financial management research paper, iResearchNet comes to the rescue. With an array of quality writing services tailored to suit your unique needs, we are here to help you achieve your academic goals. Here’s an overview of our unique offerings, aimed at providing you the best in custom financial management research paper writing.

• Expert Degree-Holding Writers : Our team comprises handpicked writers, each holding degrees in finance or related fields. They come with a wealth of experience in academic writing, industry exposure, and a deep understanding of financial management concepts. They have the expertise to delve into complex topics and transform them into comprehensive, high-quality research papers.
• Custom Written Works : At iResearchNet, we believe every assignment is unique. We offer bespoke services, writing each paper from scratch, ensuring it matches your specific requirements and academic level. Our writers create well-structured, argumentative, and analytically sound papers that reflect original thinking.
• In-Depth Research : We recognize the importance of thorough research in crafting a superior financial management paper. Our writers dive deep into a variety of resources, extracting relevant information, data, and insights to ensure that your paper is rich in content, evidential support, and critical analysis.
• Custom Formatting : We adhere to the formatting style of your choice – APA, MLA, Chicago/Turabian, or Harvard. Our writers are adept at applying these styles to your paper, ensuring that every citation, reference, and the general layout complies with the required academic standards.
• Top Quality : Our commitment to quality is uncompromising. Each paper goes through a rigorous quality check, ensuring clarity of thought, precision of language, validity of arguments, and the overall coherence of the paper.
• Customized Solutions : We recognize that each student has unique needs. Our writers engage in a collaborative process with you to understand your academic objectives, style preferences, and specific requirements to provide a custom solution that best fits your needs.
• Flexible Pricing : We offer our premium services at competitive prices. We believe that every student deserves access to quality writing services, and our flexible pricing system ensures our services are affordable.
• Short Deadlines : Faced with a tight deadline? No worries. We can handle urgent orders, with turnaround times as short as three hours for certain assignments, without compromising on quality.
• Timely Delivery : We respect your timelines and are committed to delivering your paper well within your specified deadline, giving you ample time for review and revisions, if needed.
• 24/7 Support : Our dedicated customer service team is available around the clock to answer your queries, resolve any issues, and provide updates on your order status.
• Absolute Privacy : We have stringent privacy policies in place to ensure the confidentiality of your personal information and order details. We guarantee that your data will never be shared with third parties.
• Easy Order Tracking : Our user-friendly online platform enables you to easily track your order’s progress, communicate with the writer, and manage all aspects of your order conveniently.
• Money Back Guarantee : Your satisfaction is our ultimate goal. If, for any reason, you are not satisfied with our services, we offer a money-back guarantee, assuring you that your investment is safe with us.

With iResearchNet, you can rest assured that your financial management research paper is in capable hands. We understand the challenges that come with academic writing and strive to offer a comprehensive, stress-free solution that caters to your specific needs. Our core values of quality, integrity, and customer satisfaction drive us to deliver top-tier services that elevate your academic journey.

Leave the daunting task of research and writing to us, and focus on what truly matters – learning, understanding, and applying financial management concepts. So, reach out today, and let us help you turn your academic challenges into opportunities for growth and success!

Unlock Your Potential with iResearchNet – Your Partner in Academic Success!

Are you ready to take your financial management research paper to the next level? The journey to academic excellence is filled with challenges, but you don’t have to face them alone. With iResearchNet’s team of highly qualified writers and industry experts, we’ve got your back!

1. Embrace Quality and Excellence: We are not just offering a service; we are offering a partnership in your academic success. Our carefully crafted research papers are more than mere assignments; they are learning tools, meticulously designed to help you understand and excel in financial management.

2. Save Time, Learn More: By trusting us with your research paper, you free yourself to focus on understanding core financial management concepts, preparing for exams, or engaging in other valuable educational pursuits. Let us handle the intricate details of research and writing.

3. Invest in Your Future: This is more than just another paper; it’s a step towards your future career in finance. Our expertly crafted custom papers can be your gateway to deeper insights and better grades.

Why Wait? Let’s Get Started!

The clock is ticking, and your deadline is fast approaching. Our expert writers are standing by, ready to transform your requirements into a masterpiece of academic writing. With iResearchNet, you are not just buying a paper; you are investing in knowledge, quality, and your future success.

Take action today. Click the link below, fill in the details, and start your journey towards academic excellence with iResearchNet. Experience the difference that professionalism, quality, and personalized service can make in your academic life.

Order Now – Let iResearchNet Guide You to Success!

Order high quality custom paper.

Financial Management Explained: Scope, Objectives & Importance

In business, financial management is the practice of handling a company’s finances in a way that allows it to be successful and compliant with regulations. That takes both a high-level plan and boots-on-the-ground execution.

What Is Financial Management?

At its core, financial management is the practice of making a business plan and then ensuring all departments stay on track. Solid financial management enables the CFO or VP of finance to provide data that supports creation of a long-range vision, informs decisions on where to invest, and yields insights on how to fund those investments, liquidity, profitability, cash runway and more.

ERP software can help finance teams achieve these goals: A financial management system combines several financial functions, such as accounting, fixed-asset management, revenue recognition and payment processing. By integrating these key components, a financial management system ensures real-time visibility into the financial state of a company while facilitating day-to-day operations, like period-end close processes.

Video: What Is Financial Management?

Objectives of Financial Management

Building on those pillars, financial managers help their companies in a variety of ways, including but not limited to:

• Maximizing profits: Provide insights on, for example, rising costs of raw materials that might trigger an increase in the cost of goods sold.
• Tracking liquidity and cash flow: Ensure the company has enough money on hand to meet its obligations.
• Ensuring compliance: Keep up with state, federal and industry-specific regulations.
• Developing financial scenarios: These are based on the business’ current state and forecasts that assume a wide range of outcomes based on possible market conditions.
• Manage relationships: Dealing effectively with investors and the boards of directors .

Ultimately, it’s about applying effective management principles to the company’s financial structure.

Scope of Financial Management

Financial management encompasses four major areas:

The financial manager projects how much money the company will need in order to maintain positive cash flow, allocate funds to grow or add new products or services and cope with unexpected events, and shares that information with business colleagues.

Planning may be broken down into categories including capital expenses, T&E and workforce and indirect and operational expenses.

The financial manager allocates the company’s available funds to meet costs, such as mortgages or rents, salaries, raw materials, employee T&E and other obligations. Ideally there will be some left to put aside for emergencies and to fund new business opportunities.

Companies generally have a master budget and may have separate sub documents covering, for example, cash flow and operations; budgets may be static or flexible .

Static vs. Flexible Budgeting

Managing and assessing risk.

Line-of-business executives look to their financial managers to assess and provide compensating controls for a variety of risks, including:

Affects the business’ investments as well as, for public companies, reporting and stock performance. May also reflect financial risk particular to the industry, such as a pandemic affecting restaurants or the shift of retail to a direct-to-consumer model .

The effects of, for example, customers not paying their invoices on time and thus the business not having funds to meet obligations, which may adversely affect creditworthiness and valuation, which dictates ability to borrow at favorable rates .

Finance teams must track current cash flow, estimate future cash needs and be prepared to free up working capital as needed.

This is a catch-all category, and one new to some finance teams. It may include, for example, the risk of a cyber-attack and whether to purchase cybersecurity insurance , what disaster recovery and business continuity plans are in place and what crisis management practices are triggered if a senior executive is accused of fraud or misconduct.

The financial manager sets procedures regarding how the finance team will process and distribute financial data, like invoices, payments and reports, with security and accuracy. These written procedures also outline who is responsible for making financial decisions at the company — and who signs off on those decisions.

Companies don’t need to start from scratch; there are policy and procedure templates available for a variety of organization types, such as this one for nonprofits.

Functions of Financial Management

More practically, a financial manager’s activities in the above areas revolve around planning and forecasting and controlling expenditures.

The FP&A function includes issuing P&L statements, analyzing which product lines or services have the highest profit margin or contribute the most to net profitability, maintaining the budget and forecasting the company’s future financial performance and scenario planning.

Managing cash flow is also key. The financial manager must make sure there’s enough cash on hand for day-to-day operations, like paying workers and purchasing raw materials for production. This involves overseeing cash as it flows both in and out of the business, a practice called cash management.

Along with cash management, financial management includes revenue recognition, or reporting the company’s revenue according to standard accounting principles. Balancing accounts receivable turnover ratios is a key part of strategic cash conservation and management. This may sound simple, but it isn’t always: At some companies, customers might pay months after receiving your service. At what point do you consider that money “yours” — and report the good news to investors?

Finally, managing financial controls involves analyzing how the company is performing financially compared with its plans and budgets. Methods for doing this include financial ratio analysis, in which the financial manager compares line items on the company’s financial statements.

Strategic vs. Tactical Financial Management

On a tactical level, financial management procedures govern how you process daily transactions, perform the monthly financial close, compare actual spending to what’s budgeted and ensure you meet auditor and tax requirements.

On a more strategic level, financial management feeds into vital FP&A (financial planning and analysis) and visioning activities, where finance leaders use data to help line-of-business colleagues plan future investments, spot opportunities and build resilient companies.

Importance of Financial Management

Solid financial management provides the foundation for three pillars of sound fiscal governance:

Strategizing

Identifying what needs to happen financially for the company to achieve its short- and long-term goals. Leaders need insights into current performance for scenario planning , for example.

Decision-making

Helping business leaders decide the best way to execute on plans by providing up-to-date financial reports and data on relevant KPIs.

Controlling

Ensuring each department is contributing to the vision and operating within budget and in alignment with strategy.

With effective financial management, all employees know where the company is headed, and they have visibility into progress.

What Are the Three Types of Financial Management?

The functions above can be grouped into three broader types of financial management:

Capital budgeting

Relates to identifying what needs to happen financially for the company to achieve its short- and long-term goals. Where should capital funds be expended to support growth ?

Capital structure

Determine how to pay for operations and/or growth. If interest rates are low, taking on debt might be the best answer. A company might also seek funding from a private equity firm , consider selling assets like real estate or, where applicable, selling equity.

Working capital management

As discussed above, is making sure there’s enough cash on hand for day-to-day operations, like paying workers and purchasing raw materials for production.

#1 Cloud ERP Software

What Is an Example of Financial Management?

We’ve covered some examples of financial management in the “functions” section above. Now, let’s cover how they all work together:

Say the CEO of a toothpaste company wants to introduce a new product: toothbrushes. She’ll call on her team to estimate the cost of producing the toothbrushes and the financial manager to determine where those funds should come from — for example, a bank loan.

The financial manager will acquire those funds and ensure they’re allocated to manufacture toothbrushes in the most cost-effective way possible. Assuming the toothbrushes sell well, the financial manager will gather data to help the management team decide whether to put the profits toward producing more toothbrushes, start a line of mouthwashes, pay a dividend to shareholders or take some other action.

Throughout the process, the financial manager will ensure the company has enough cash on hand to pay the new workers producing the toothbrushes. She’ll also analyze whether the company is spending and generating as much money as she estimated when she budgeted for the project.

NetSuite: Financial Management for Startups and Beyond

At the outset, financial management responsibilities within a startup include making and sticking to a budget that aligns with the business plan, evaluating what to do with profits and making sure your bills get paid and that customers pay you.

Financial management gets more complicated as the company grows and adds finance and accounting contractors or staffers. You must ensure your employees get paid with accurate deductions, properly file taxes and financial statements, and watch for errors and fraud.

This all circles back to our opening discussion of balancing strategic and tactical. By building a plan, you can answer the big questions: Are our goods and services profitable? Can we afford to launch a new product or make that hire? What might the coming 12 to 18 months bring for the business? Solid financial management provides the systems and processes to answer those questions.

Financial management challenges can be daunting for both startups and growing businesses. This is where NetSuite's financial management software comes into play. With its comprehensive, cloud-based solutions, NetSuite ensures that your financial data is accurate, up-to-date, and accessible anytime, anywhere.

From automating complex financial processes to offering real-time visibility into performance, NetSuite is the go-to solution for businesses aiming for seamless integration and efficient financial operations. As your company expands, NetSuite scales with you, ensuring you have the right tools to make informed strategic decisions at every stage. Make the smart choice for your business's financial future with NetSuite.

Financial Management

What is Financial Contingency Plan? A Step-by-Step Guide to Creating One

Creating a financial contingency plan is a wise move for any business. Crises and setbacks can strike suddenly, from natural disasters to economic downturns, technical failures, partner bankruptcies and customer…

More On This

Trending Articles

Learn How NetSuite Can Streamline Your Business

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there’s continuity from sales to services to support.

Before you go...

Discover the products that 37,000+ customers depend on to fuel their growth.

Before you go. Talk with our team or check out these resources.

Want to set up a chat later? Let us do the lifting.

NetSuite ERP

Explore what NetSuite ERP can do for you.

Business Guide

Complete Guide to Cloud ERP Implementation

Research Topics & Ideas: Finance

120+ Finance Research Topic Ideas To Fast-Track Your Project

If you’re just starting out exploring potential research topics for your finance-related dissertation, thesis or research project, you’ve come to the right place. In this post, we’ll help kickstart your research topic ideation process by providing a hearty list of finance-centric research topics and ideas.

PS – This is just the start…

We know it’s exciting to run through a list of research topics, but please keep in mind that this list is just a starting point . To develop a suitable education-related research topic, you’ll need to identify a clear and convincing research gap , and a viable plan of action to fill that gap.

If this sounds foreign to you, check out our free research topic webinar that explores how to find and refine a high-quality research topic, from scratch. Alternatively, if you’d like hands-on help, consider our 1-on-1 coaching service .

Overview: Finance Research Topics

• Corporate finance topics
• Investment banking topics
• Private equity & VC
• Asset management
• Hedge funds
• Financial planning & advisory
• Quantitative finance
• Treasury management
• Financial technology (FinTech)
• Commercial banking
• International finance

Corporate Finance

These research topic ideas explore a breadth of issues ranging from the examination of capital structure to the exploration of financial strategies in mergers and acquisitions.

• Evaluating the impact of capital structure on firm performance across different industries
• Assessing the effectiveness of financial management practices in emerging markets
• A comparative analysis of the cost of capital and financial structure in multinational corporations across different regulatory environments
• Examining how integrating sustainability and CSR initiatives affect a corporation’s financial performance and brand reputation
• Analysing how rigorous financial analysis informs strategic decisions and contributes to corporate growth
• Examining the relationship between corporate governance structures and financial performance
• A comparative analysis of financing strategies among mergers and acquisitions
• Evaluating the importance of financial transparency and its impact on investor relations and trust
• Investigating the role of financial flexibility in strategic investment decisions during economic downturns
• Investigating how different dividend policies affect shareholder value and the firm’s financial performance

Investment Banking

The list below presents a series of research topics exploring the multifaceted dimensions of investment banking, with a particular focus on its evolution following the 2008 financial crisis.

• Analysing the evolution and impact of regulatory frameworks in investment banking post-2008 financial crisis
• Investigating the challenges and opportunities associated with cross-border M&As facilitated by investment banks.
• Evaluating the role of investment banks in facilitating mergers and acquisitions in emerging markets
• Analysing the transformation brought about by digital technologies in the delivery of investment banking services and its effects on efficiency and client satisfaction.
• Evaluating the role of investment banks in promoting sustainable finance and the integration of Environmental, Social, and Governance (ESG) criteria in investment decisions.
• Assessing the impact of technology on the efficiency and effectiveness of investment banking services
• Examining the effectiveness of investment banks in pricing and marketing IPOs, and the subsequent performance of these IPOs in the stock market.
• A comparative analysis of different risk management strategies employed by investment banks
• Examining the relationship between investment banking fees and corporate performance
• A comparative analysis of competitive strategies employed by leading investment banks and their impact on market share and profitability

Private Equity & Venture Capital (VC)

These research topic ideas are centred on venture capital and private equity investments, with a focus on their impact on technological startups, emerging technologies, and broader economic ecosystems.

• Investigating the determinants of successful venture capital investments in tech startups
• Analysing the trends and outcomes of venture capital funding in emerging technologies such as artificial intelligence, blockchain, or clean energy
• Assessing the performance and return on investment of different exit strategies employed by venture capital firms
• Assessing the impact of private equity investments on the financial performance of SMEs
• Analysing the role of venture capital in fostering innovation and entrepreneurship
• Evaluating the exit strategies of private equity firms: A comparative analysis
• Exploring the ethical considerations in private equity and venture capital financing
• Investigating how private equity ownership influences operational efficiency and overall business performance
• Evaluating the effectiveness of corporate governance structures in companies backed by private equity investments
• Examining how the regulatory environment in different regions affects the operations, investments and performance of private equity and venture capital firms

Asset Management

This list includes a range of research topic ideas focused on asset management, probing into the effectiveness of various strategies, the integration of technology, and the alignment with ethical principles among other key dimensions.

• Analysing the effectiveness of different asset allocation strategies in diverse economic environments
• Analysing the methodologies and effectiveness of performance attribution in asset management firms
• Assessing the impact of environmental, social, and governance (ESG) criteria on fund performance
• Examining the role of robo-advisors in modern asset management
• Evaluating how advancements in technology are reshaping portfolio management strategies within asset management firms
• Evaluating the performance persistence of mutual funds and hedge funds
• Investigating the long-term performance of portfolios managed with ethical or socially responsible investing principles
• Investigating the behavioural biases in individual and institutional investment decisions
• Examining the asset allocation strategies employed by pension funds and their impact on long-term fund performance
• Assessing the operational efficiency of asset management firms and its correlation with fund performance

Hedge Funds

Here we explore research topics related to hedge fund operations and strategies, including their implications on corporate governance, financial market stability, and regulatory compliance among other critical facets.

• Assessing the impact of hedge fund activism on corporate governance and financial performance
• Analysing the effectiveness and implications of market-neutral strategies employed by hedge funds
• Investigating how different fee structures impact the performance and investor attraction to hedge funds
• Evaluating the contribution of hedge funds to financial market liquidity and the implications for market stability
• Analysing the risk-return profile of hedge fund strategies during financial crises
• Evaluating the influence of regulatory changes on hedge fund operations and performance
• Examining the level of transparency and disclosure practices in the hedge fund industry and its impact on investor trust and regulatory compliance
• Assessing the contribution of hedge funds to systemic risk in financial markets, and the effectiveness of regulatory measures in mitigating such risks
• Examining the role of hedge funds in financial market stability
• Investigating the determinants of hedge fund success: A comparative analysis

Financial Planning and Advisory

This list explores various research topic ideas related to financial planning, focusing on the effects of financial literacy, the adoption of digital tools, taxation policies, and the role of financial advisors.

• Evaluating the impact of financial literacy on individual financial planning effectiveness
• Analysing how different taxation policies influence financial planning strategies among individuals and businesses
• Evaluating the effectiveness and user adoption of digital tools in modern financial planning practices
• Investigating the adequacy of long-term financial planning strategies in ensuring retirement security
• Assessing the role of financial education in shaping financial planning behaviour among different demographic groups
• Examining the impact of psychological biases on financial planning and decision-making, and strategies to mitigate these biases
• Assessing the behavioural factors influencing financial planning decisions
• Examining the role of financial advisors in managing retirement savings
• A comparative analysis of traditional versus robo-advisory in financial planning
• Investigating the ethics of financial advisory practices

The following list delves into research topics within the insurance sector, touching on the technological transformations, regulatory shifts, and evolving consumer behaviours among other pivotal aspects.

• Analysing the impact of technology adoption on insurance pricing and risk management
• Analysing the influence of Insurtech innovations on the competitive dynamics and consumer choices in insurance markets
• Investigating the factors affecting consumer behaviour in insurance product selection and the role of digital channels in influencing decisions
• Assessing the effect of regulatory changes on insurance product offerings
• Examining the determinants of insurance penetration in emerging markets
• Evaluating the operational efficiency of claims management processes in insurance companies and its impact on customer satisfaction
• Examining the evolution and effectiveness of risk assessment models used in insurance underwriting and their impact on pricing and coverage
• Evaluating the role of insurance in financial stability and economic development
• Investigating the impact of climate change on insurance models and products
• Exploring the challenges and opportunities in underwriting cyber insurance in the face of evolving cyber threats and regulations

Quantitative Finance

These topic ideas span the development of asset pricing models, evaluation of machine learning algorithms, and the exploration of ethical implications among other pivotal areas.

• Developing and testing new quantitative models for asset pricing
• Analysing the effectiveness and limitations of machine learning algorithms in predicting financial market movements
• Assessing the effectiveness of various risk management techniques in quantitative finance
• Evaluating the advancements in portfolio optimisation techniques and their impact on risk-adjusted returns
• Evaluating the impact of high-frequency trading on market efficiency and stability
• Investigating the influence of algorithmic trading strategies on market efficiency and liquidity
• Examining the risk parity approach in asset allocation and its effectiveness in different market conditions
• Examining the application of machine learning and artificial intelligence in quantitative financial analysis
• Investigating the ethical implications of quantitative financial innovations
• Assessing the profitability and market impact of statistical arbitrage strategies considering different market microstructures

Treasury Management

The following topic ideas explore treasury management, focusing on modernisation through technological advancements, the impact on firm liquidity, and the intertwined relationship with corporate governance among other crucial areas.

• Analysing the impact of treasury management practices on firm liquidity and profitability
• Analysing the role of automation in enhancing operational efficiency and strategic decision-making in treasury management
• Evaluating the effectiveness of various cash management strategies in multinational corporations
• Investigating the potential of blockchain technology in streamlining treasury operations and enhancing transparency
• Examining the role of treasury management in mitigating financial risks
• Evaluating the accuracy and effectiveness of various cash flow forecasting techniques employed in treasury management
• Assessing the impact of technological advancements on treasury management operations
• Examining the effectiveness of different foreign exchange risk management strategies employed by treasury managers in multinational corporations
• Assessing the impact of regulatory compliance requirements on the operational and strategic aspects of treasury management
• Investigating the relationship between treasury management and corporate governance

Financial Technology (FinTech)

The following research topic ideas explore the transformative potential of blockchain, the rise of open banking, and the burgeoning landscape of peer-to-peer lending among other focal areas.

• Evaluating the impact of blockchain technology on financial services
• Investigating the implications of open banking on consumer data privacy and financial services competition
• Assessing the role of FinTech in financial inclusion in emerging markets
• Analysing the role of peer-to-peer lending platforms in promoting financial inclusion and their impact on traditional banking systems
• Examining the cybersecurity challenges faced by FinTech firms and the regulatory measures to ensure data protection and financial stability
• Examining the regulatory challenges and opportunities in the FinTech ecosystem
• Assessing the impact of artificial intelligence on the delivery of financial services, customer experience, and operational efficiency within FinTech firms
• Analysing the adoption and impact of cryptocurrencies on traditional financial systems
• Investigating the determinants of success for FinTech startups

Commercial Banking

These topic ideas span commercial banking, encompassing digital transformation, support for small and medium-sized enterprises (SMEs), and the evolving regulatory and competitive landscape among other key themes.

• Assessing the impact of digital transformation on commercial banking services and competitiveness
• Analysing the impact of digital transformation on customer experience and operational efficiency in commercial banking
• Evaluating the role of commercial banks in supporting small and medium-sized enterprises (SMEs)
• Investigating the effectiveness of credit risk management practices and their impact on bank profitability and financial stability
• Examining the relationship between commercial banking practices and financial stability
• Evaluating the implications of open banking frameworks on the competitive landscape and service innovation in commercial banking
• Assessing how regulatory changes affect lending practices and risk appetite of commercial banks
• Examining how commercial banks are adapting their strategies in response to competition from FinTech firms and changing consumer preferences
• Analysing the impact of regulatory compliance on commercial banking operations
• Investigating the determinants of customer satisfaction and loyalty in commercial banking

International Finance

The folowing research topic ideas are centred around international finance and global economic dynamics, delving into aspects like exchange rate fluctuations, international financial regulations, and the role of international financial institutions among other pivotal areas.

• Analysing the determinants of exchange rate fluctuations and their impact on international trade
• Analysing the influence of global trade agreements on international financial flows and foreign direct investments
• Evaluating the effectiveness of international portfolio diversification strategies in mitigating risks and enhancing returns
• Evaluating the role of international financial institutions in global financial stability
• Investigating the role and implications of offshore financial centres on international financial stability and regulatory harmonisation
• Examining the impact of global financial crises on emerging market economies
• Examining the challenges and regulatory frameworks associated with cross-border banking operations
• Assessing the effectiveness of international financial regulations
• Investigating the challenges and opportunities of cross-border mergers and acquisitions

Choosing A Research Topic

These finance-related research topic ideas are starting points to guide your thinking. They are intentionally very broad and open-ended. By engaging with the currently literature in your field of interest, you’ll be able to narrow down your focus to a specific research gap .

When choosing a topic , you’ll need to take into account its originality, relevance, feasibility, and the resources you have at your disposal. Make sure to align your interest and expertise in the subject with your university program’s specific requirements. Always consult your academic advisor to ensure that your chosen topic not only meets the academic criteria but also provides a valuable contribution to the field. 

If you need a helping hand, feel free to check out our private coaching service here.

You Might Also Like:

thank you for suggest those topic, I want to ask you about the subjects related to the fintech, can i measure it and how?

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

• Print Friendly

An official website of the United States government

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

• Publications
• Account settings

Preview improvements coming to the PMC website in October 2024. Learn More or Try it out now .

• Advanced Search
• Journal List
• Int J Environ Res Public Health

Link between Financial Management Behaviours and Quality of Relationship and Overall Life Satisfaction among Married and Cohabiting Couples: Insights from Application of Artificial Neural Networks

Monika baryła-matejczuk.

1 Institute of Psychology and Human Sciences, University of Economics and Innovation, 20-209 Lublin, Poland; [email protected]

Viktorija Skvarciany

2 Faculty of Business Management, Vilnius Gediminas Technical University, LT-10223 Vilnius, Lithuania; [email protected]

Andrzej Cwynar

3 Institute of Public Administration, Business and Management, University of Economics and Innovation, 20-209 Lublin, Poland; [email protected] (A.C.); [email protected] (W.C.)

Wiesław Poleszak

Wiktor cwynar.

Background: To explain the link between household finances and the quality of the relationship between married or cohabitating partners and their life satisfaction, the Family Stress Model (FSM) was used and placed within the theoretical framework of the Couples and Finances Theory (CFT). Methods: The measures used to examine the relationship between partners were the Financial Management Behaviour Scale, the Marriage Questionnaire (KDM-2) adapted to a version for cohabitating couples, The Shared Goals and Values Scale, Harsh Start-up Scale, and the Satisfaction With Life Scale (SWLS). In order to find out the relationship between variables, artificial neural networks (ANN) were applied. The research was conducted on a sample of 500 couples living in Poland (384 married and 116 cohabitating couples). Results: The results indicate that overall life satisfaction is most influenced by fundamental, direct, current ways of dealing with the daily financial routine and by saving and investing behaviours. Credit management and insurance behaviours are the most important for the quality of the relationship between partners. Conclusions: The research shows that financial management behaviours have an impact on the quality of relationships as well as on the subjective well-being of people in a relationship, and their relationship dynamics. This finding may be used to highlight the psychological importance of financial management behaviours.

1. Introduction

Various aspects of intra-household financial life have become the subject of many discussions, estimates, and analyses for many researchers and practitioners around the world who are concerned with both financial and relationship issues. They indicate the need to analyse the relationship between variables related to these following two domains: financial and relationship [ 1 ]. Overall, the conclusion is that it is essential to attain an improved understanding of the significance and role of financial management in the quality and durability of the relationships of married and cohabiting couples (e.g., [ 1 , 2 , 3 , 4 , 5 , 6 ]).

An attempt to explain this link is undertaken by applying the Couples and Finances Theory (CFT) model developed by Archuleta [ 7 ]. The primary assumption of the CFT theory is that financial difficulties are related to problems in the relationship ([ 8 ] as cited in [ 9 ]). The CFT is based on ecological theory, a systemic approach to investigating relationships with the financial process in the centre (every component that cooperates in bi-directional relationships). In theory, the pair system consists of a husband and wife (H&W), their marital quality (MQ), and relationship characteristics (CRC), and the financial process comprising financial inputs (FI) and financial management practices (FMP). In this article, the CFT approach is used to help to clarify the connections between the relationship of the couple and the household financial processes [ 7 ]. Additionally, in this study, the analysis was extended to include overall life satisfaction.

Another of the proposed approaches used to explain the link between intra-household finances and the quality of a relationship is the family stress model of economic pressure and marital distress, or simply the family stress model [ 10 , 11 ]. According to this model, negative economic events lead to economic pressure, resulting in changes to the affective states and, finally, to a decline in marital quality. This theory was supported by studies conducted in the USA in the 1980s, which indicated that negative economic events were associated with an increased sense of economic pressure, which in turn, was linked to affective changes (including increased depression and hostility that increased marital distress). Furthermore, some studies have produced evidence that support through affection as well as conflict management skills, helped (indirectly) to reduce the effects of economic pressure, and increased the odds of marital quality improvement [ 10 ] ([ 12 ] as cited in [ 1 ]).

2. Literature Review

Studies led by Kerkmann, Lee, Lown, and Allgood [ 13 ] indicate that financial issues affect marital satisfaction. The authors showed that financial factors might explain 15% of marital satisfaction. However, they point out that these results should be treated with caution, as the sample consisted of young couples with a short marital relationship [ 13 ].

Other studies have drawn attention to the role played by financial arrangements, especially arguments concerning money, on marital quality. Research has shown that financial issues are an essential cause of conflict between spouses. The results obtained by Britt and Huston [ 14 ] suggest that arguments concerning money are an essential indicator of relationship satisfaction, but they do not have such a significant impact on the likelihood of divorce. However, poor financial management may harm the quality of a relationship. The consequences of bad financial management such as excessive consumer debt are related to both marital conflicts and the likelihood of divorce [ 15 ]. The results of a study by Dew and Xiao [ 11 ] suggest that financial declines are not directly related to proper financial management.

On the other hand, correct financial management is positively associated with happiness in marriages and cohabitation relationships. Furthermore, proper financial management has a direct influence on the relationship between economic pressure and relationship happiness. It also influences the relationship between financial decline and the happiness of a couple [ 11 ].

Britt, Grable, Nelson-Goff, and White [ 3 ] evaluated how the perceived own money-spending behaviours, the conduct of a partner, and the joint financial behaviour of the couple affect the degree of satisfaction experienced within relationships. The results indicated that the behaviour of the partner related to expenditures affected the degree of satisfaction derived from the relationship and the decision to stay within the relationship. Interestingly, the perceived own behaviours or common spending behaviours were not a significant factor in the quality of the relationship. Self-esteem and financial stressors were also important factors for the degree of satisfaction experienced within the relationship [ 3 ]. Archuleta, Britt, Tonn, and Grable [ 2 ] investigated the link between financial satisfaction and financial stressors and the decision of the spouse to remain married or to leave their partner. The role of demographic variables, socio-economic variables, religiosity, psychological constructs, financial satisfaction, and financial stressors as factors relevant to marital satisfaction were analysed. Religiousness and financial satisfaction were positively correlated with marital satisfaction. There was also a negative relationship between financial satisfaction and financial stressors. When the spouses experienced more financial stressors, they were also more likely to leave the marriage. The authors concluded that financially satisfied spouses were also more content with their marriages, or less willing to leave them [ 2 ].

The studies discussed above indicate the role of bad financial management as an essential stressor in relationships. Behaviours that help individuals and families to attain a more stable financial position are associated to a significant extent with a sense of satisfaction derived from the relationship [ 1 , 2 , 11 , 16 ]. Financial problems affect the ability of a couple to communicate and resolve conflicts and thus remain in a relationship. Both communication and financial resources are essential factors in understanding the causes of arguments between partners [ 17 ]. Compared to other types of marital misunderstandings, conflicts related to finances are more problematic for couples and are one of the best predictors of negative conflict tactics [ 18 ]. Contemporary research [ 19 ] provides an empirical basis for the development of a theoretical framework for understanding patterns of marital interactions and the impact of these patterns on marital satisfaction. The way in which couples communicate concerning financial matters is essential. Research shows that even though it is commonly believed that money is not the most frequently discussed problem within marriages, arguments concerning money are generally the most intense disagreements within married couples [ 19 ]. When couples engage in negative interactions, conflict resolution becomes more and more difficult, and marital satisfaction decreases.

However, when the partners share a sense of meaning within the relationship, their marital satisfaction increases. Couples who engage in discussions using criticism or sarcasm (i.e., forms of contempt for partners) tend to face disagreement/arguments more often. In other words, when one of the partners enters a discussion by blaming the other or criticizing, they get involved in sharp or harsh start-ups [ 20 ]. Archuleta [ 7 ] and Archuleta et al. [ 1 ] adopted the concept of shared goals and values from the work of Gottman [ 20 ]. Archuleta and colleagues reported that those who were more satisfied financially engaged less in harsh start-ups and had more shared goals and values. Additionally, positive discussion and shared goals and values were positively associated with relationship satisfaction [ 1 ]. Rosenblatt and Keller [ 21 ] found that couples who experienced more significant economic distress reported a greater degree of blaming behaviour within the marriage. The authors conclude that the economic problems of farm couples with greater economic vulnerability produce stress in these relationships.

There is evidence to suggest that healthy financial management is associated not only with marital satisfaction, but also with general life satisfaction (cf. [ 22 ]). It has been well documented that expressing healthy financial behaviours is positively related to overall life satisfaction [ 23 ] and emotional well-being [ 24 ]. Overall life satisfaction is often linked to the availability of financial resources [ 25 , 26 ]. On one hand, lower wages, inadequate financial management, inferior financial situation, and the general conditions associated with poverty mean that people do not have sufficient funds to pay for investments that would bring them a greater sense of satisfaction. This leads to a lower level of general life satisfaction. People who live in poverty are the most vulnerable to a sense of dissatisfaction with life. Research concerning the determinants of life satisfaction in a poor community [ 26 ] shows that for the achievement of satisfaction from life, the relevant factors include income level, employment status, or poverty status. Other studies, however, have shown that a growing income, resulting in higher purchasing power, optimism, and satisfaction, may not lead to positive changes in general life satisfaction (subjective well-being) [ 22 ].

Additionally, it has been found that excessive debt, which may arise as a result of unhealthy behaviours, is negatively linked to overall life satisfaction [ 27 , 28 ] and positively related to anxiety [ 1 ]. Tay et al. [ 29 ] indicated two channels through which debt may affect overall well-being. In the bottom-up spillover view, financial management (including credit management) may have considerable spillover effects in other life domains (e.g., the marriage-related indicators). On the other hand, from the resource perspective, debt imposes constraints on financial resources and, therefore, reduces the available stress buffer. According to the above-cited research, it seems that money is not the most discussed problem within marriages. However, given the intensity of arguments about money within marriages, we assumed that financial management behaviours are related to harsh start-ups, and to beliefs about shared goals and values (the meaning of money and how it should be used, the function of autonomy and independence, and with the hopes and aspirations for the family and future relationship goals).

The research conducted so far also indicates the role of unhealthy financial management behaviours as a significant stressor in the relationship, which is associated with perceived satisfaction within relationships. Additionally, spouses experiencing more financial stressors were also more likely to leave the marriage, and the consequences of unhealthy management are associated with both marital conflict and the likelihood of divorce. Therefore, it may be concluded that behaviours related to financial management are also directly related to the quality of the relationships built.

Finally, it has been well documented that expressing healthy financial behaviours is positively related to overall life satisfaction. The debt-related financial management dimension is of particular importance. It has been established that this is an aspect of financial life that is crucial for stress and its consequences, which may be experienced in the form of mental health problems, a lower quality of social functioning, and lower global cognitive judgments of life satisfaction.

3. Materials and Methods

3.1. financial management behaviour.

In order to examine financial management behaviour, we adopted the financial management behaviour scale (FBMS) introduced by [ 30 ]. This is the only multi-dimensional, psychometrically validated scale that has been validated in a nationally representative sample designed to date [ 30 ]. Multi-dimensionality means that the scale—as opposed to other scales present in the relevant literature—captures (as subscales) all possible domains of household financial matters: cash management, credit management, savings and investment, and insurance. The scale of [ 30 ] is based on a consensus regarding what should be deemed as healthy financial management behaviour, which is present in the household finance literature. For instance, timely repayment of credit card debt is considered to be healthy, while not saving for retirement is unhealthy. In fact, healthy financial management behaviour follows the rules of common sense. In order to obtain data concerning financial management behaviour, the respondents were required to answer the following question: ‘On a scale from 1 (never) to 5 (always) indicate how often you have engaged in the following activities in the past six months’ (see [ 30 ] for the exact wording of the items comprising the FMBS). As a result, each subscale and the aggregate FMBS can easily be interpreted: the higher the value on the scale, the more healthy the financial behaviour.

3.2. Shared Goals and Values

The Shared Goals and Values Scale [ 7 ] is a four-item measurement adapted by Archuleta derived from Gottman’s [ 31 ] Shared Meaning Roles, Shared Meaning Goals, and Shared Meaning Symbols scales that are used to assess the shared meaning of couples concerning financial goals and values, life goals, and autonomy. The responses were measured using a 7-point Likert-type scale, where 1 = strongly disagree, and 7 = strongly agree. Response scores could range from 4 to 28, with lower scores indicating a lower degree of agreement concerning life goals and values, and higher scores reflecting more agreement on these issues.

3.3. Harsh Start-Up

Harsh start-ups were measured using a scale consisting of five items. The scale was adapted from work originally published by Gottman [ 31 ] and translated into Polish. Conceptually, a harsh start-up may be viewed as the way in which couples interact; more specifically, how couples engage in the discussion process covering conflictual topics. Each of the following items was assessed dichotomously, with a true statement being assigned a score of 1 or 0. Items were reverse coded and summed into a harsh start-up index scale score so that higher scores reflected being less likely to engage in the harsh start-up.

3.4. Relationship Quality

The Well-Matched Marriage/KDM-2 questionnaire in [ 32 ] was used to measure the quality of the relationship from the perspective of four dimensions: intimacy, disappointment, self-realisation, and similarity as well as the overall result indicating overall satisfaction with the marriage/relationship. The tool has satisfactory psychometric indicators concerning research on the population of Polish marriages and couples. Cronbach’s alpha for individual sub-scales ranges from 0.81–0.89. It is the only psychometrically validated scale that has been validated in a nationally representative sample scale that has been designed in Poland to date. The KDM-2 questionnaire applies to both spouses individually and to marriages. In this research, the questionnaire was adopted to also examine cohabitation relationships and consists of 32 statements. The respondent, while answering the questions, is asked to choose one of five answers on a scale from 1 = totally disagree to 5 = totally agree.

3.5. Overall Life Satisfaction

In order to assess overall life satisfaction, the SWLS scale was used [ 33 ]. The scale contains five statements. Respondents assess to what extent each of them relates to their lives. The result of the measurement is a general indicator of a sense of life satisfaction, specifically global cognitive judgments of satisfaction with one’s life [ 34 ]. The SWLS asked the respondents to rate on a 5-point Likert-type scale (where 1 states for “strongly disagree” and 5 for “strongly agree”), the extent to which they agree with the five statements, for example, “In most ways, my life is close to my ideal”; “The conditions of my life are excellent”; and “If I would live my life over, I would change almost nothing”. Some researchers have shown [ 35 ] that self-satisfaction is an important component of life satisfaction and equates to well-being with high self-esteem. The Polish translation of SWLS has been used and has shown to have strong internal reliability.

3.6. Study Design and Sampling

The research was conducted on a sample of 500 couples living in Poland: 768 spouses and 232 cohabitants. The sample selection procedure was commissioned via a professional market and opinion research agency, DRB Research in Poland. The sample was selected using a stratified sampling technique. Specifically, the respondents were selected from different voivodeships in proportion to the number of cohabitants and marriages living therein, with control for age and education. In order to find out the relationship between financial management behaviour indicators and indicators of both marital quality and satisfaction with overall well-being, artificial neural networks (ANN) were applied. Scholars from different science fields adapted ANNs as the tool for various areas of science including social sciences. Artificial neural networks are a powerful modelling technique for indicating the relationships between variables [ 36 ].

The method of using artificial neural networks (ANNs) is based on simulating the function of the nervous system of the human brain [ 37 , 38 ]. The neurons summarise the impulses sent by independent variables by weight and then transfers the integral impulse to define a dependent variable [ 39 ]. In other words, ANN is a technique based on artificial intelligence and has advantages against more traditional approaches such as regression [ 40 , 41 ]. The first benefit is that ANNs can detect both linear and nonlinear relationships; the second, the estimation accuracy of ANNs do not depend on assumptions about the distribution of the variables [ 40 ]. These ANN characteristics are crucial for selecting this approach in determining relationships. The variables used in the study are presented in Table 1 .

Variables used in the study (designed by the authors).

The respondents had to evaluate a different number of statements in order to assess the study variables. To evaluate the statements (except harsh start-up), a 7-point Likert scale was used. In fact, the Likert scale is one of the most frequently used scales for gathering data in the social sciences [ 42 , 43 ]. The research model is presented in Figure 1 .

Analytical model (developed by the authors).

The analytical model ( Figure 1 ) seeks to investigate the relationships between financial management behaviour as represented by four variables (cash management, savings and investments, credit management, and insurance) and relationship quality, overall life satisfaction, harsh start-ups, and shared goals and values. Hence, four different models were used.

In order to test the analytical model, neural networks for four distinguished models were developed ( Figure 2 ). The number of cases used for training varied from 231 to 245, while for testing, it was from 95 to 108 (i.e., it is approximately 70/30 division in all the models, Table A1 ). The number of excluded cases was 661, which means that only fully-completed cases were used for the research. As a result, artificial neural networks were developed using 340 valid cases. In Figure 2 , the neural networks for the FMB group variables are presented.

Neural network diagrams for: ( a ) Model A; ( b ) Model B; ( c ) Model C; ( d ) Model D (designed by the authors).

As can be seen in Figure 1 , all models have three layers. The input layer is represented by the factors, namely cash management, savings and investments, credit management, and insurance and one output layer represents relationship quality in Model A, overall life satisfaction in Model B, harsh start-up in Model C, and shared goals and values in Model D. Moreover, all models include one hidden layer. It is worth mentioning that the grey lines show a positive relationship, while the blue shows negative relationships. Moreover, the thickness of the line shows the strength of the connection. The parameters of the weights for Model A are provided in Table 2 .

Parameter estimates for Model A (calculated by the authors).

All of the synaptic weights presented in Table 2 are moderate. The negative weights varied from −0.345 to −0.078, while the positive ones varied from 0.111 to 0.229, which confirms that CashMan , SavInv , CreditMan , and Ins are the variables that affect the output variable RQ . In order to find out which of the independent variables were the most influential when determining the value of an output variable, the importance of the variables was calculated. The results are presented in Table 3 .

Independent variable importance for Model A (calculated by the authors).

The importance values show that the most critical value is credit management, the second is insurance, the third is savings and investment, and the fourth is cash management. Credit management, which relates to the actions taken by households to deal with borrowed funds, is of particular importance here. Insurance-related financial behaviour is in second place in terms of affecting the quality of the relationship.

In third place, in terms of importance, we have savings and investment. Healthy financial behaviour in this dimension is also essential for assessing satisfaction within the relationship. Finally, in terms of importance for the RQs are behaviours associated with cash management. Money management, in this case, means that the couple keeps a financial record (mental or written), maintains the discipline to stay within their budgets when spending, and also engage in comparison shopping. However, the importance of the CashMan variable is quite low; hence, it may be stated that it does not have a strong connection with relationship quality. In Table 4 , the parameters of Model B are provided.

Parameter estimates for Model B (calculated by the authors).

Table 4 shows that the negative weights varied from −0.824 to −0.250, while the positive ones varied from 0.203 to 0.495. In this case, all of the relationships can be treated as moderate or strong, but despite this fact, it showed that CashMan , SavInv , CreditMan , and Ins are the variables that have connections with the dependent variable of overall life satisfaction. In order to find out which of the independent variables were the most influential when determining the value of an output variable, the importance of the variables was calculated. The results are presented in Table 5 .

Independent variable importance for Model B (calculated by the authors).

Table 5 shows that the most crucial variable that relates to couples’ overall life satisfaction is cash management (the importance was 0.424 and savings and investments was 0.248). The importance of insurance and credit management were less critical than cash management. While they were less critical, the behaviours associated with insurance and savings and investments are still significant in the assessment of overall life satisfaction. This would indicate a less critical role of behaviours related to the distant future, and the greater importance of everyday financial tasks related to household tasks.

Consequently, as in the case of relationship quality, the analysis of the relationship between financial management behaviours and overall life satisfaction also indicates a significant connection. It may be concluded that healthy financial behaviour is conducive to favourable global cognitive judgments of satisfaction with the life of a spouse. It may also be concluded that another area of life, overall well-being, is affected by how couples manage their finances.

The third model to test was Model C, in which the nature of the link between cash management, savings and investments, credit management, insurance variables, and the harsh start-up variable were tested. The parameters are denoted in Table 6 .

Parameter Estimates for Model C (calculated by the authors).

From the information presented in Table 6 , the most considerable weight was assigned to the savings and investment variable, which shows that the relationship with harsh start-up is quite strong. The importance of each of the analysed variables is summarized in Table 7 .

Independent variable importance for Model C (calculated by the authors).

It may be observed in Table 7 that savings and investments appeared to be the most crucial variable. Credit management and insurance were also essential, while cash management was not as vital as the previously mentioned variables. The results of the calculations indicate that unhealthy behaviour in the area of savings and investment, the lack of actions taken by households to deal with borrowed funds, and the lack of behaviour aimed at protecting a contingency affects engagement more in the harsh start-up.

The fourth model, Model D, was investigated in order to determine the relationship between FMB variables ( CashMan , SavInv , CreditMan , Ins ) and common goals and values ( ShareGVal ). The weights of the parameters are provided in Table 8 .

Parameter estimates for Model D (calculated by the authors).

It may be observed in Table 8 that almost all of the weights were quite strong, which means that the relationships were also strong. However, the strongest one was the credit management weight. In order to find out which of the independent variables were the most influential when determining the value of an output variable, the importance of the variables was calculated. The results are presented in Table 9 .

Independent variable importance for Model D (calculated by the authors).

Table 9 shows that the most crucial variable that relates to the shared goals and values of couples were actions taken by households to deal with borrowed funds. Insurance is in second place, while cash management and savings and investments may be treated as non-essential variables, as the importance score was very low. For the shared meaning of couples concerning financial goals and values, life goals, and autonomy, the most crucial variable was credit management. Healthy behaviour associated with this financial activity is related to everyday household tasks and it turns out to be relatively unimportant for the interactional dynamics of couples. In second place in terms of importance were the behaviours related to insurance. People engaged in maintaining or purchasing an adequate health insurance policy, property insurance, and life insurance are less likely to start a conflict (they engage less in harsh start-ups).

5. Discussion

In this article, we attempted to address the question concerning the association between and among the various financial management behaviours, the interactional dynamics of couples, their relationship satisfaction, and overall life satisfaction. The investigation of the relationship between these variables is vital from the practical perspective of developing the acquired knowledge as well as filling the gap in the literature concerning the dimensions of healthy financial management behaviour as a factor that can protect the quality of relationships and overall quality of life. Due to the growing interest in research into the area of links between financial behaviour, the stress of couples, the dynamics of their relationships, and marital/relationship satisfaction, an attempt was made to capture the relationship between three critical areas of human functioning: psychological, financial, and social. The purpose of the analysis was to broaden the knowledge of employees of marriage counselling centres, marriage and family therapists, financial management specialists, and point out that finances do not just concern money, thus highlighting the crucial role of education and teaching competencies essential for healthy financial management. Finally, it emphasises the importance of healthy financial management dimensions for the healthy functioning of relationships and overall quality of life.

In the research conducted, the direct relationship between FMB and the quality of the relationship was first analysed. The investigation carried out indicates that the ways in which couples manage their finances affect the quality of their relationships. In other words, healthy behaviours related to achieving financial and economic goals are essential to the quality of the relationships built. The results are consistent with the research conducted to date, which indicates that the quality of relationships is related to the efficiency of their financial management (cf. [ 1 , 2 , 11 , 16 ]). They also indirectly point to the approach adopted throughout the research that the financial area is the foundation of the ability to meet many needs. The results of the research conducted support the concept of the Couples and Finances Theory, which in a simplified form, states that financial difficulties are related to relationship-related problems [ 7 , 8 ]. Similar conclusions were reached by Kerkmann, Lee, Lown, and Allgood [ 13 ], indicating that financial issues affect marital satisfaction as well as Dew and Xiao [ 11 ], who demonstrated that healthy financial management is positively associated with happiness in marriages and cohabitation. Therefore, it may be concluded that financially fit people are also more stable in their marriages (cf. [ 2 ]).

Our research shows that credit management and insurance are of the most significant importance for the quality of relationships. The results obtained broaden the knowledge about aspects of financial life related to relationship satisfaction. Healthy credit management behaviour has a positive impact on the cognitive assessment of relationship quality. Therefore, it may be assumed that healthy behaviour in this area is perceived by partners as desirable and comforting (cf. [ 15 ]). Insurance, in turn, involves far-reaching goals and protecting an unfavourable contingency. Again, it may be referred to as providing a sense of security, which is one of the basic needs of an individual. People who care about having optional insurance (against serious illness, insurance of their assets, a life insurance policy) assess their relationships better. Psychologically, this can mean that we meet basic needs (like the sense of security) and other needs are based on our financial means. That is, the way of managing and satisfying one’s needs (individual and relationship needs) no longer literally depends on obtaining various goods and services, but also depends on acquiring them through the appropriate management of financial resources.

A significant result obtained in this study is the positive relationship between cash management and engaging in harsh start-up (which is one of the dimensions of relationship dynamics). The result indicates that people with healthy behaviour in this area (who compare products, pay bills on time, stick to their budget) are less likely to get involved in the harsh start-up. Since cash management concerns basic needs, satisfying them (as important ones) will always be associated with strong emotions. Intense emotions, combined with negative interaction dynamics or a lack of conflict resolution skills, can lead to a release of tension. Displaying confidence in one’s financial management competence can be a source of compensation for relationship difficulties. These are areas worth covering in subsequent studies. The relationship between financial management and individual communication skills as well as conflict resolution in pairs would require unique clarification, and it would also be interesting to include personality factors in future research.

The way in which financial management behaviour affects the interactional dynamics of couples was also analysed. It was assumed that the aspects of relationship in a heterosexual couple that are related to communication strategies and shared goals and values in these relationships would both be directly related to relationship quality. The research conducted so far indicates that financial resources and the way they are managed are essential components for understanding the causes of arguments in a relationship [ 17 ], which in turn are significant for the quality of relationships. Research shows that if a discussion in a relationship begins with a difficult start, it will inevitably end negatively. Statistics indicate that in 96 per cent of cases, the outcome of a conversation can be predicted based on the first three minutes of a 15-min interaction. A problematic start (harsh start-up) is associated with more misunderstandings and less satisfaction within the relationship [ 44 ]. Compared to other types of marital misunderstandings, financial disagreements are more problematic for couples and are one of the best predictors of conflict tactics [ 18 ]. Quarrels about money, compared to other subjects, are the most intense disagreements in marriages (cf. [ 19 ]). In turn, similar views on (a) the importance of money and how it should be used; (b) the functions of autonomy and independence; and (c) hopes and aspirations for the family, and the future goals of relationships are related to both the relationship quality and the manner of interaction within the relationship. They are also influenced by the nature of financial management [ 7 , 8 , 31 ]. It has been documented that the way in which couples start a discussion (e.g., blaming or criticising a spouse or partner, and engaging in sharp start-ups,)also indicates that the couple has relatively few common goals and values.

Money management and insurance are of the most significant importance for setting shared goals and values, but savings and investment and credit management are also crucial for the healthy functioning of the relationship. Healthy behaviour in the area of credit management, saving for long-term goals, putting money aside as a deferred payday, or putting it into a retirement account has a positive impact on avoiding quarrels. In turn, healthy cash management as well as insurance for the future has a positive impact on common goals and values. In other words, healthy financial management behaviours strengthen the common approach to financial matters and decrease the frequency of engagement in a harsh start-up.

The relationship between financial management behaviours and overall life satisfaction was subsequently analysed. In the context of well-being, the most influential are cash management and saving and investment behaviour. Once again, cash management plays a vital role in the quality of functioning, and efficient functioning in this dimension can be treated as a factor that protects life satisfaction. According to researchers in this area, there is a fundamental difference between concepts that measure experienced well-being and concepts that measure life evaluation [ 22 , 45 , 46 ]. Therefore, the question is, how important is financial management in how partners are satisfied with their lives as a whole. First, in light of our results, for that aspect of well-being, the most critical factor is dealing with cash. As with other aspects of relationship interactions, these fundamental behaviours are the most influential. All in all, the results of our research confirm that expressing healthy financial behaviour is positively related to overall life satisfaction [ 23 ] and emotional well-being [ 24 ].

6. Conclusions, Limitations, and Future Research

This research shows that financial management behaviour has an impact on the quality of relationships as well as on the subjective well-being of the people in the relationship.

Money management and savings and investment behaviour are the most important for the subjective quality of life. Overall life satisfaction is influenced by the most fundamental, direct, and current ways of dealing with the daily financial routine and also by regular saving and generally planning for the future (setting long-term goals including retirement).

Overall life satisfaction is dependent on those dimensions of financial management that are associated with the daily aspects of life. These dimensions have a close psychological connection with the daily satisfaction of basic needs.

Credit management is the most critical aspect of financial management for the quality of the relationship. This finding may highlight the psychological importance of the sense of security. Healthy credit management behaviour (e.g., regular debt repayment, or comparing loan offerings) has a positive impact on how couples view their relationship. In other words, far-reaching goals are discussed (or argued about) more often than everyday shopping tasks. Insurance behaviour is also essential for the satisfaction of the relationship. Behaviours associated with non-compulsory insurance are designed to protect against unexpected changes, so they contribute toward ensuring safety. A feature of this dimension of financial management is that the insurance we studied is not mandatory, so it involves considering the future and the decision must be taken to take care of the future, both one’s own and the family’s (e.g., life insurance). Therefore, it can be said that what protects the quality of marriage from a financial perspective is the consideration of the future.

While living in cohabitation or marriage, individual needs are considered along with those in the relational context. Spouses discuss them, making decisions or at least exchanging information about them. Theoretically speaking, the quality of relationships should be associated with having common goals and values. Research shows that when people share goals and values, it is easier to maintain a consensus in this dimension and hence enjoy higher-quality relationships. This would explain why caring about far-reaching goals (such as insurance) is essential. Setting goals for the future is related to the need for security. It assumes a certain surplus and the security resulting from it. Having these skills (cash management, taking care of the future) protects against descending into conflict, which is not directly related to proper money management.

In conclusion, a list of protective factors and risks may be selected. The skilful use of money, spending it sensibly in everyday routine area translates into satisfying basic needs, and as a consequence, translates into life satisfaction and thinking about shared goals and values, which are essential for the quality of relationships. Credit management skills have a similar significance for the assessment of relationship satisfaction, overshadowing the elementary need for security. Skills in financial management are essential for the dynamics of relationships; the ability to secure the future has a unique role.

As usual, this research also has some limitations. In studies conducted to date, financial satisfaction was included in the analysis of the relationship between financial matters and marital quality as another potentially important factor. In future studies, it would be worth describing the relationship using this variable. Another topic worth exploring is the comparison between partners in relationships, as perceived by own behaviour or joint financial behaviour. It may be assumed that people in a relationship may have different perceptions of their behaviour as well as financial situations.

Additionally, it is worth noting which psychological mechanisms underlie the combination of management skills with the quality of the relationships, for which specific aspects of the FMB relationship matter.

Further research into the system approach would require the consideration of the role of children in households. Studies show [ 47 ] that in the case of money management, younger adults without children more often had independent money management systems. This would indicate the need to take account of having children and their importance in managing money (e.g., children introduce new categories of financial obligations).

Developing the issues discussed in the article with a positive psychology approach would indicate the need to identify both personal and social resources conducive to efficient financial management. The results are part of an already developed strategy regarding the importance of private resources for developing the quality of life.

The last of the proposed directions for research development would be to check how the method of money management, or rather the dynamics of management changes are related to the dynamics of the quality of marriage and family life. Longitudinal research concerning this topic would raise the issue of unexplored content.

The results obtained may be used in education and psychoeducation. The conclusions provide direction for preventive strategies that may be taken to support the well-being of individualsand provide them with satisfaction in their social lives. The application of the results is possible from both a psychological and economic point of view. Paying attention to the role of finance in life, the need for a good knowledge of the partner, resources, features, goals, and values before starting a relationship can help to develop it in a more satisfying manner. Appropriately teaching children for their age and developmental stage concerning money management is a protective factor for their well-being in life.

In summary, one should highlight the importance of financial management in aspects related to relationships and quality of life. The level of awareness of this should be raised for specialists working to improve the quality of marital and cohabitant relations, and above all, the psychological understanding of money should be stressed as an element of satisfying needs. The results obtained should also be considered in the context of couples and families in crisis who are searching for explanations for their situation; deficiencies in management skills (or asymmetrical competences in this aspect of the relationship) as potential causes of difficulties within the relationship and life. This knowledge may be particularly useful for psychotherapists of couples and families.

Case processing summary (calculated by authors).

Author Contributions

Conceptualization, M.B.-M., W.P., A.C., and W.C.; Methodology, M.B.-M., W.P., V.S., A.C., and W.C.; Formal analysis, V.S.; Investigation, M.B.-M., W.P., and A.C.; Data curation, V.S., M.B.-M., and A.C.; Wariting—original draft preparation, M.B.-M., W.P., V.S., and A.C.; Writing—review and editing, M.B.-M., A.C., W.P., V.S., and W.C.; Visualisation, V.S.; Supervision, M.B.-M. and A.C.; Project administration, A.C. and W.C.; Funding acquisition, A.C. and W.C. All authors have read and agreed to the published version of the manuscript.

This research was funded by the Ministry of Science and Higher Education, Republic of Poland, grant number 0057/DLG/2016/10. The APC was funded by the University of Economics and Innovation, Lublin, Poland.

Conflicts of Interest

The authors declare no conflict of interest. The funders had no role in the design of the study; in the collection, analyses, or interpretation of data; in the writing of the manuscript, or in the decision to publish the results.

• Apply to UMaine

UMaine News

Baker named umaine assistant vice president for research finance and administration.

Jennifer Baker has been named assistant vice president for research finance and administration at the University of Maine. Baker, who has more than 18 years of financial management and administration experience in UMaine’s research enterprise, has assumed strategic leadership of financial and personnel administration in her new role. 

“Jenn’s deft ability to streamline administrative processes and handle complex budgets is invaluable. Her work has been instrumental to the fiscal administration of UMaine’s research portfolio for nearly two decades,” said Kody Varahramyan, UMaine’s vice president for research and dean of the Graduate School. “I am happy to welcome her into this new role and look forward to working together in the years to come.”

She previously served as the director of fiscal and administrative services, providing human resources support and overseeing budgets for the Office of the Vice President for Research and Dean of the Graduate School. She also led UMaine’s Technical and Administrative Services Central, where she provided financial administrative support to the principal investigators of research projects. 

A UMaine alum, Baker earned a degree in accounting and is currently pursuing a Master of Business Administration. 

“ I am honored and excited about the promotion to assistant vice president for research finance and administration,” Baker said. “This opportunity represents a significant milestone in my career, and I look forward to contributing to the University’s mission of advancing research excellence.”

• UMaine Today Magazine
• Submit news

• Affimed-stock
• News for Affimed

Promising Clinical Trials and Strategic Financial Management Affirm Buy Rating for Affimed

In a report released today, Swayampakula Ramakanth from H.C. Wainwright maintained a Buy rating on Affimed ( AFMD – Research Report ), with a price target of $10.00 .

Swayampakula Ramakanth’s rating is based on a mix of clinical progress and strategic financial moves by Affimed. The company’s drug AFM24 has shown promising objective response rates in clinical trials for patients with EGFR-wildtype NSCLC, prompting an expansion of the trial cohort. These positive results suggest potential for AFM24 to be an appealing candidate for partnerships within the pharmaceutical industry. Additionally, Affimed is expected to release more data in the upcoming quarters, which could further validate the drug’s efficacy and strengthen its position in the market. Furthermore, Ramakanth recognizes the company’s effective financial management, including a strategic restructuring to reduce operational costs, and a reverse stock split to adjust its share count. With a considerable cash reserve reported to sustain operations well into the second half of 2025, Affimed appears financially stable. These factors, combined with the potential for upcoming clinical data to drive value, contribute to the analyst’s Buy rating with a new price target of $10 per diluted share.

In another report released yesterday, Wells Fargo also maintained a Buy rating on the stock with a $25.00 price target.

TipRanks tracks over 100,000 company insiders, identifying the select few who excel in timing their transactions. By upgrading to TipRanks Premium, you will gain access to this exclusive data and discover crucial insights to guide your investment decisions. Begin your TipRanks Premium journey today.

Affimed (AFMD) Company Description:

Affimed NV engages in discovering and developing of targeted cancer immunotherapies. Its pipelines include Innate Cell Engagers and T Cell Engagers. The company was founded in 2000 and is headquartered in Heidelberg, Germany.

Read More on AFMD:

• Affimed Therapeutics’ Optimistic Clinical Outlook
• Affimed To Report Full Year 2023 Financial Results & Corporate Update on March 28, 2024
• AFMD Earnings this Week: How Will it Perform?
• Affimed NV trading halted, news pending
• Affimed Announces 1-for-10 Reverse Stock Split

Affimed News MORE

Related stocks.

• Kreyòl Ayisyen

CFPB’s Equal Employment Opportunity (EEO) program status report for fiscal year (FY) 2023

The U.S. Equal Employment Opportunity Commission’s (EEOC) Management Directive 715 (MD-715) requires federal agencies to submit an annual report that evaluates whether agencies are establishing and maintaining effective programs of equal employment opportunity under Section 717 of Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., and Section 501 of the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 791 et seq.

The below report includes CFPB’s activities undertaken pursuant to its EEO Program, a description of the internal assessments CFPB has conducted to identify and prevent barriers to employment in the workplace, a plan that sets forth steps CFPB will take in the future to correct deficiencies or further improve the equal employment opportunity program, and data capturing the race, national origin, gender, and disability status of CFPB’s workforce.

Full report

Read the full report