Cultural theory and the meanings of money :: Business and Management Studies

Cultural theory and the meanings of money Couples and their money: theory and practice in personal finances Four perspectives draw on: * Economics and rational choice theory * Social structural approaches * Psychological approaches * Cultural theory and the meanings of money. According to classical economic theory money has four main functions: †¢it is a medium of exchange, †¢a store of value, †¢a unit of account, †¢a standard of deferred payment. Perspectives within economic theory relevant to personal finances: †¢fungibility This notion is standard in classical economic theory and means that money is considered to be neutral and interchangeable, so that any unit of wealth is substitutable for any other (McCloskey, 1987). †¢rational choice theory This assumes that people make reasoned choices in order to maximise their overall welfare or utility. Rational choice theory lays stress on the importance of information in facilitating the efficient working of markets and of consumer choice. Daniel: I have a high interest account with First Direct as well. And then I have another savings account which is slightly lower interest. The high interest savings account has a penalty on withdrawals, so I keep a sum of money in there stable which I don’t draw on. If I have extra spending, or I need to top up my current account in case I’m going overdrawn, that comes from the third, lower interest account which I keep for small amounts. When I have a surplus at the end of the month in my current account I transfer across to the high interest account as much as I can. 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