Learning is all about asking questions, and no one asks questions better than children. Boise State is home to more than 1,400 faculty members and researchers who are eager to answer these amazing questions.
Today, Distinguished Professor of Psychology Eric Landrum answers a child’s question, “Why do adults care so much about money?”
Landrum has been teaching students for more than 30 years about psychology, and how to successfully conduct psychological research. He has authored numerous books, chapters and publications while mentoring students in research, writing and more.
Question: Why do adults care so much about money?
Basically, money allows for the possibility of good things happening, said Landrum. Having some money allows for safety, security, food, health care and so much more.
In psychology, a concept known as financial strain refers to the difficulty of making ends meet or struggling to meet basic needs. Researchers indicate that financial strain is linked to health, housing and food insecurity.
Adults sacrifice money to avoid unequal outcomes, which is called inequity aversion. That is, it is about fairness. People will work hard to avoid receiving less than others, and they are more accepting when they receive more than others. Adults are willing to pay for fairness.
From a kid’s perspective, financial independence is important for many reasons. For example, having money signals a transition from childhood to adulthood.
Currently, young people are becoming financially independent at older ages than in recent history.
According to a study conducted by the Pew Research Center, “In 2021, the most recent year with available data, 39% of 21-year-olds were working full time, compared with 64% in 1980. And only a quarter of people this age in 2021 were financially independent of their parents – meaning that their income was at least 150% of the poverty line – compared with 42% in 1980.”
As it turns out, financial satisfaction is linked to one’s well-being. Financial satisfaction is about one’s income, status, living standards and money management.
In the musical “Cabaret,” there is a song with the title and lyric of “money makes the world go round.” For most adults, that sounds about right.
Did you know?
Games are a great way to learn about handling money, and the Public Broadcasting Service made a game to help kids explore the concept of financial well-being, learn about financial behaviors and how to make sound financial decisions.
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