Credit, Saving, and Insurance Practices Influencing Satisfaction With Preparation for Financial Emergencies Among Rural Households

A family resource management framework was used to develop a model of relationships between socioeconomic variables, financial management practices, and satisfaction with preparation for financial emergencies. This study examined direct and indirect effects of socioeconomic charac teristics and mediating effects of financial management practices variables on satisfaction with preparation for financial emergencies. A sample of 297 money managers was randomly selected from two rural counties of a midwestern state. Results showed that households'monthly income was the only socioeconomic variable that had a significant direct effect on satisfaction with preparation for financial emergencies, whereas the effects of other socioeconomic variables were mediated through the effects offinancial management practices. Financial management practices such as the managerial behavior index, monthly saving, and the number of insurance types had significant positive effects on satisfaction with preparation for financial emergencies. Monthly debt payment had a significant but negative effect on satisfaction. The managerial behavior index and monthly debt payment had both direct and indirect effects on satisfaction with preparation for financial emergencies. Their indirect effects were mediated through monthly saving. Monthly saving and the number of insurance types showed only direct effects on satisfaction with preparation for financial emergencies.