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Over-indebtedness and the interplay of factual and mental money management: An interview study

Author

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  • Bernadette Kamleitner
  • Bianca Hornung
  • Erich Kirchler

Abstract

Previous research has shown that money management contributes to over-indebtedness. This article sheds new light on this relation by looking at factual money management and its mental underpinnings, mental accounting. In a conceptual model we propose that fuzzy factual and mental money management practices aggravated by lack of congruency between factual and mental structures play an important role in over-indebtedness. Twenty-five in-depth interviews deliver preliminary support for this proposition. Successful financial control seems to build on efficient and inter-coordinated factual and mental money management. This reduces the willpower necessary for controlling financial behavior and helps to prevent and fight over-indebtedness.

Suggested Citation

  • Bernadette Kamleitner & Bianca Hornung & Erich Kirchler, 2010. "Over-indebtedness and the interplay of factual and mental money management: An interview study," Working Papers 34, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    • Handle: RePEc:cgs:wpaper:34
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    File URL: http://cgr.sbm.qmul.ac.uk/CGRWP34.pdf
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    References listed on IDEAS

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    Cited by:

    1. Antonides, Gerrit & Manon de Groot, I. & Fred van Raaij, W., 2011. "Mental budgeting and the management of household finance," Journal of Economic Psychology, Elsevier, vol. 32(4), pages 546-555, August.

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    More about this item

    Keywords

    debt; money management; mental accounting; self-control;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D1 - Microeconomics - - Household Behavior

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