Daniel’s economic rationality extended to credit cards and Air Miles. He explained about his American Express Gold Card:
I use that for my purchases because I get Air Miles on that, so all my purchases I get Air Miles and I transfer that to my various Air Miles accounts. I originally got a Gold Card because they did a special offer, had one free for a year, and so I gave up after a year. Said ‘No thank you. I don’t want to pay for a card’. Oh well, another card arrives free for a year, so I said, ‘Fine’.
Pahl, J. (2001) ‘Couples and their money: theory and practice in personal finances’, in R. Sykes, C.Bochel and N. R. Ellison, Social Policy Review 13, Policy Press Bristol.
Rosie: If I’ve got to have dealings with them for money, I like to know that it’s only a certain number of hours… I like restrictions of banking hours; I do quite like that. I’m old fashioned, completely opposite to Daniel. If he sees that something is wrong with one of the accounts, he says ring up immediately, but I kind of like stalling everything. I feel sort of secure that at least I can’t do anything about it. I have to wait until tomorrow. I think its quite good not to feel you have to deal with financial matters. You just don’t want to have to worry about it. The weekend is the end of work; you don’t want to work; you don’t go to work.
Pahl, J. (2001) ‘Couples and their money: theory and practice in personal finances’, in R. Sykes, C.Bochel and N. R. Ellison, Social Policy Review 13, Policy Press Bristol.
Money is impersonal property. It permits me to transport on my person, in my pocket, social power and social relations in general: the substance of society. Money puts social power in material form into the hands of private persons, who exercise it as individuals (Marx, 1971, p 150, cited in Pahl, 2001).
The conclusion was that those who are ‘credit rich’ tend also to be ‘work rich’, ‘information rich’ and ‘education rich’, while those who are ‘credit poor’ are likely also to be ‘work poor’, ‘information poor’ and ‘education poor’ (Pahl, 1999 and 2000, cited in Pahl 2001).
‘Financial exclusion’
defined as having few or no financial products. Being a full citizen of a Western European country increasingly depends on access to financial products and services, that is access to credit, banking facilities, mortgages, insurance and so on.
Pahl, 2001.
The responses of the children were categorised thus:
- No knowledge of interest (get or pay back same amount)
- Interest on deposits only (get back more but pay the same)
- Interest on both, but more on deposit
- Interest same on both deposits and loans
- Interest higher on loans (but reason not fully understood)
- Interest higher on loans fully understood.
Pahl, 2001.
Cultural theory and the meanings of money
Consumption does not arise from the objective need of the consumer, a final intention of the subject towards the object; rather there is social production, in a system of exchange, of a material of differences, a code of significations (Baudrillard, 1981, p 75).
Conclusions:
- Education and information about personal finances tend to be presented in terms of rational choice theory, but many people are not rational consumers, or their rationality is limited.
- In their access to financial services, many people are constrained by income, employment status, education, age, gender, ethnicity and the location in which they live.
- Policy makers will have to consider how to reduce the structural roots of inequality in access to financial services.
- As more and more financial services are accessed through the internet, there will be increasing concern about the ‘digital divide’.
Pahl, 2001.
References
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Financial Services Authority (2000) In or out? financial exclusion: a literature and research review, London: Financial Services Authority.
Ford, J. (1991) Consuming credit: debt and poverty in the UK, London: Child Poverty Action Group.
Grande, C. and Timmins, N. (2000) ‘Poor left behind as digital divide widens’, Financial Times, 11 July.
Kempson, E. and Whyley, C. (1999) Kept out or opted out: understanding and combating financial exclusion, Bristol: The Policy Press.
Levene, T. (2000) ‘Naive consumers don’t shop around’, The Guardian, 22 April.
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Pahl, J. (1995) ‘His money, her money: recent research on financial organisation in marriage’, Journal of Economic Psychology, vol 16, no 3, pp 361-76.
Pahl, J. (1999) Invisible money: family finances in the electronic economy, Bristol: The Policy Press.
Pahl, J. (2000) ‘Money, households and social polarisation’, in R. Crompton, M. Savage, F. Devine and J. Scott, Keele: Sociological Review Monograph
Pahl, J. (2001) ‘Widening the scope of social policy: families, financial services and the impact of technology’, in R. Edwards and J. Glover (ed) Risk and citizenship: key issues in welfare, London: Macmillan.
Pahl, J. (2001) ‘Couples and their money: theory and practice in personal finances’, in R. Sykes, C.Bochel and N. R. Ellison, Social Policy Review 13, Policy Press Bristol.
