role of mental budgeting in healthy financial behavior: a survey among self-employed entrepreneurs

dc.contributor.authorde Groot, I. Manon
dc.contributor.authorvan Raaij, W. Fred
dc.date.accessioned2021-06-28T11:15:52Z
dc.date.available2021-06-28T11:15:52Z
dc.date.issued2016-08-01
dc.description.abstractSelf-employed entrepreneurs (without personnel) manage their business and household finances at the same time. Both domains tend to interact with each other. In this study, it is studied whether and how self-employed entrepreneurs manage their finances. More specifically, the role of mental budgeting and time orientation in healthy financial behavior is studied. Mental budgeting is a way to manage expenses. It entails setting budgets, making reservations on budgets, compensating after too much spending on a budget, and non-fungibility (treating money as earmarked and categorized). It can be expected that self-employed entrepreneurs using mental budgeting strategies behave in a more healthy financial manner. Survey data were collected among self-employed people without personnel in The Netherlands. The survey contained, among others, questions about the company, time orientation, financial management, tax attitude, reported tax compliance, and concern or worry about the future. Questions were factor analyzed using principal component analyses. The resulting scales were used for further analyses. Regression analyses were performed to predict concern or worry about finances, financially restricting to and exceeding budgets, and reporting tax compliance. In this paper, two components of time orientation are distinguished: awareness of consequences and carelessness about the future. From these components, four orientation types of self-employed people were obtained. The orientation type focusing on long-term consequences shows more healthy financial behavior, whereas the orientation type focusing on the present and less on consequences shows less healthy financial behavior. Responsible and healthy financial behavior of self-employed entrepreneurs is related to focusing on long-term consequences, using mental budgeting, and keeping one’s budgets. Aspects of mental budgeting are predicting worry about business finances. Differential effects of mental budgeting were found on restricting one’s budgets, and exceeding budgets, respectively. Of two measures of future circumstances (work disability, pension), only pension measures were predicting worrying about finances. Mental budgeting was not related to tax compliance, except for fungibility. Past tax behavior is predictive of other (past) tax behaviors. Fiscal history measures prove to be correlated with present measures.en
dc.formatapplication/pdf
dc.identifier.citationApplied Studies in Agribusiness and Commerce, Vol. 10 No. 2-3 (2016) , 15-25
dc.identifier.doihttps://doi.org/10.19041/APSTRACT/2016/2-3/2
dc.identifier.eissn1789-7874
dc.identifier.issn1789-221X
dc.identifier.issue2-3
dc.identifier.jatitleAPSTRACT
dc.identifier.jtitleApplied Studies in Agribusiness and Commerce
dc.identifier.urihttps://hdl.handle.net/2437/317771en
dc.identifier.volume10
dc.languageen
dc.relationhttps://ojs.lib.unideb.hu/apstract/article/view/6853
dc.rights.accessOpen Access
dc.rights.ownerUniversity of Debrecen, Faculty of Economics and Business, Hungary
dc.subjectself-employeden
dc.subjectentrepreneursen
dc.subjectmental budgetingen
dc.titlerole of mental budgeting in healthy financial behavior: a survey among self-employed entrepreneursen
dc.typefolyóiratcikkhu
dc.typearticleen
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