The Association between Childhood Allowances and Adulthood Financial Management and Savings Behavior

Faculty Sponsor: Valerie Nazzaro, Manolis Kaparakis

Live Poster Session: Zoom Link

David Mun

Hi, I am a freshman at Wesleyan University who intends to double major in Economics and English with a minor in Data Analysis. 

Abstract: Childhood allowance fosters early financial education, shaping adept money management skills for adulthood. Effective financial management enhances life satisfaction by reducing financial stress. While much research explores spending for happiness, little examines the impact of saving behavior. This gap prompts further inquiry: What is the relationship between saving behavior, childhood allowance, and the outcome of enjoying life due to successful financial management? The sample that was drawn for this study was from The National Financial Well-Being Survey which conducted a total of 6,394 surveys were completed, comprising 5,395 responses from the general population and 999 from an oversampled group of adults aged 62 and older. The variables used in this study required responses for these three statements: “Provided me with a regular allowance”, “Putting money into savings is a habit for me”, and “I can enjoy life because of the way I’m managing my money.” Running a multiple logistic regression analysis controlling for household income, it was found that Having an Allowance (O.R. 1.35, CI 1.18 – 1.54) and Making savings a habit (O.R. 5.78, CI 4.92 – 6.81) remained significantly and positively associated (p< 0.001) with Enjoying life after holding Household Income fixed. Future research is needed to determine the role of other covariates (e.g. Household Income Growing Up, Education levels, how much allowance one received).

QAC-201-Final-Project-1-4