August 22, 2018

Columbus, OH, August 22, 2018: The Association for Financial Counseling and Planning Education® (AFCPE®) recently released results from a study examining the relationship between personal attitudes and asset allocations. Published in the Journal of Financial Counseling and Planning (JFCP) as part of our special issue on health and finances, the study revealed links between individuals’ future orientation – the degree to which they consider future consequences when making decisions – and the percentage of financial assets held in cash.

“The Journal of Financial Counseling and Planning (JFCP) was designed to connect financial educators, counselors, coaches, and planners to important scholarly research to enhance their knowledge and inform their practice,” said Rebecca Wiggins, AFCPE Executive Director. “Financial education is not one-size-fits all. Dr. Ammerman’s and Dr. MacDonald’s research underscores the need for a goal-oriented approach with qualified professionals that better help clients develop financial resilience and lasting financial well-being.”

This latest study takes an international perspective, examining 304 households participating in the 2012 wave of De Nederlandsche Bank (DNB) Household Survey (DHS). The DHS is designed to be nationally representative of the Dutch-speaking population in the Netherlands. The results of the study suggest that the more consideration individuals gave to future consequences, the less cash they held in their portfolio.

“While most people find finance to be a complex issue, many can grasp the concept that inflation eats away at purchasing power over time” said Allen Ammerman, Ph.D., Assistant Professor of Finance at West Texas A&M University. “When a future-oriented person is considering how best to allocate their financial assets, they’re going to think about inflation risk in addition to asset price volatility. Cash may be the least volatile asset, but it could be quite risky in terms of long-term purchasing power.”

The study used fractional logit regression to model the proportion of financial assets held in cash. The results showed a negative and statistically significant relationship between individual future orientation and the fraction of financial asset portfolio held in cash.

According to Ammerman, “the results of this study help us better understand why some individuals may find it so difficult to hold cash in their checking or savings accounts. What this means for practice is that we need to move beyond simple rules-of-thumb for how much cash to hold, and instead help clients develop a specially-tailored strategy that works for them and meets their needs.”

Ammerman, D. A., & MacDonald, M. (2018).  Future orientation and household financial asset liquidity. Journal of Financial Counseling and Planning, 29(1)


AFCPE ensures the highest integrity of the financial counseling profession by certifying, connecting and supporting diverse professionals. Our comprehensive certification programs represent the gold standard for financial counseling, coaching and education, including the AFC® (Accredited Financial Counselor®) certification which is accredited by NCCA and nationally recognized by CFPB and Department of Defense.

About the Journal of Financial Counseling and Planning
AFCPE’s Journal of Financial Counseling and Planning (JFCP) connects financial educators, counselors, coaches and planners to important scholarly research related to the financial decision making of individuals and families. The JFCP provides evidence-based ideas and information that enhance the skills of financial professionals to positively impact the financial well-being of individuals and families worldwide.

Media Contact:
​Rachael DeLeon

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