WHEN MONEY ISN T FUNGIBLE

Transcription

1 WHEN MONEY ISN T FUNGIBLE A Filene Center of Excellence Colloquium University of Arizona November 18, 2016 Tonya Williams Bradford, PhD, University of California Irvine

2 My Life in Financial Services Amazing Offerings YET American Consumers - Under saving - Over spending WHY?

3 Can Saving be like Retail Therapy? No immediate gratification Not tangible No praises / compliments Requires a longer term view

4 An estimated $40 trillion from Baby Boomers to Millennials

5 All Money is Not Equal Salary Bonus Windfall Gifts Inheritance

6 Types of Money are Not Equal For Consumers

7 Research Focus Understand and explain how financial assets are not fungible most often when they convey affection, belonging, and norms in a family context

8 Market Family Transfer Transfer $ $ $ $

9 How do Gifts of Assets compare to other Gifts? Like other Gifts Social exchange Communicates sentiment Creates social debt Unlike other Gifts Involves multiple parties over time Repay social debt across generations Comprised of sentimental and exchange values Focus has been on money as a medium of exchange with little consideration of money as medium for transferring social meaning!

10 Methodology Depth interviews, participantobservation, and web forums People who received, gave, or will give gifts of alienable assets Assets: money, businesses, real estate, or equities 107 people 68 families and 15 service providers White and African American Lower, middle, upper economic classes Focus on the recipient experience Theory construction

11 Emergent Themes Earmark assets for relationships Assets provide care Satisfy social debt with labor Direct consumption through gift essence

12 Earmark Money for Relationships Manage sentimental and exchange values Privilege sentimental value over exchange value Employ assets to represent relationship ties

13 Earmarking Money for Relationships I know that I am going to start a college fund for (my nephew)...get him some stocks or something, bonds...you know I will put it in his name I ve never (purchased stocks or bonds)... It really makes me feel good, because it's like you're getting a jump-start on something in the future. [TW; African American female $; 30s]... I ve taken money out of (the bond fund from my mother) but I ve paid it back. You know, it s like having a nice big savings account as far as I m concerned because I draw dividend money out of it every month I want it to be a nest egg for (my children). I probably will never use any of it. I mean, I use the interest, or the dividend money that I get, but if I never have to spend it, I m fine. [CDS; White female $$; 50s]

14 Assets Providing Care Reflects role and hierarchy of family members Asset and giver in relationship with recipient

15 Assets Provide Care the assets we ve accumulated and are able to pass on to (our children), they can think about a broader range of options in terms of what they d like to do in life. And so I think we were a little bit more motivated by the need to accumulate assets and move out of the working class into one that had more options they can think about, what do I enjoy. [CO; African American male $$$; 40s] my grandma's getting older I think she was just like you know what? I'm just going to give them each a thousand dollars I was like bawling: "Grandma, I love you." I literally opened up and started crying. I was so happy it was in there as, This is the starting off for your nest egg. [JF; White female $, 20s]

16 Satisfy Social Debt with Labor Social reproduction of sentimental value Financial reproduction of exchange value Gratitude expressed through reproduction

17 Satisfy Social Debt with Labor Now if (my children) show me they re responsible saving their money for retirement and their kids and wanting to do the same thing I want to for them, then they have more money at their disposal to do that...they won t just be getting it handed to them They re going to have to show me they re responsible then I will give them what they have coming.[dw; African American male $$, 40s] (my brother and I) always felt that it s a gift, and it s special and you earn it, and it s a blessing, and not everybody has this. So we ve always been very appreciative the same goes for assets. You know, when I was young, and even now, helping with the house or whatever, I know its Dad s blood, sweat and tears and he s giving it to me. [KM; White female $$$; 20s]

18 Direct Consumption through Gift Essence Explicit and implicit messages on use Preserving and consuming exchange value Distinction between gifted and non-gifted assets

19 Direct Consumption through Gift Essence (My father-in-law) gifts stock we have two different portfolios we have our retirement portfolio, and then we have our money market a lot of the stock that he does gift us goes into that money market because it s gift, and it s not part of our retirement funding. [CC; White female $$$; 40s] I got interested in saving and investing through my grandma (the money she gave me) was already invested I was like, ah, these [mutual] funds it was like the next level for me... [TS, African American male $; 20s]

20 Budgetary Processes Mental Budgeting Emotional Budgeting

21 Budgets & Consumer Behavior Motives Mental Budgeting Emotional Budgeting A house is housing our heritage A college fund is savings a new family custom A bond fund is investment our nest egg... Sporting event tickets are an outing a family tradition A used car transportation my relationship with Grandma A platter is a serving piece an heirloom

22 Products SERVE Needs Savings - Regular - Certificates of Deposit - Youth - Holiday Loans - Mortgage - Home Equity - Student Future Planning - IRA - Annuity - Life Insurance Business - Loans - Merchant Services

23 A Unique Position Offerings Tasks & Relationships Members & Neighbors Short & Long Term Goals Trust

24 Acting the part of Neighbor Recognize Community Members Highlight Success Stories Commercial, Academic & Volunteer Identify and create value added benefits for the Community - Teach financial management in primary and secondary schools - Participate in local road races - Host food / clothing drives

25 Your Members Have Goals Product ownership may provide insights on near term goals Birthday check-ups provide opportunities to celebrate milestones and associated mid-term goals Account changes provide opportunities for tune ups and may provide insights into longer term goals

26 Relationships have Privileges Communication channels Relevant two-way information Long term view membership provides two way engagement

27 Inventory Your Neighborhood Community Audit who do we help achieve success? Who helps us achieve success? Relationship Audit who do we know? How extensive are the relationships? What works? Product Audit who loves what in our portfolio? Why?

28 WHEN MONEY ISN T FUNGIBLE A Filene Center of Excellence Colloquium University of Arizona November 18, 2016 Tonya Williams Bradford, PhD, University of California Irvine