Social Network, Financial Locus of Control, and Older Asian Immigrants' Financial Capability

Introduction:Financial capability (i.e., financial management and access to financial services) is key for long-term economic security. We know little about financial capability of older Asian immigrants in the United States. This study investigated the financial experiences of these individuals throughout their lifetimes to identify facilitators and barriers to financial capability. It illuminates the impacts of financial environments in the country of origin and financial experience at early stage of immigration on current financial management and financial access among low-income Asian immigrant elders.

Method: We used qualitative data from in-depth interviews with 13 low-income older Asian immigrants in a supported employment program in Los Angeles. Interviews were conducted in Cantonese, English, Korean, or Mandarin. Data were analyzed to identify emerging themes and to find patterns.

Results: Findings identify how low-income older Asian immigrants to the US have acquired financial access and financial knowledge, and what have facilitated and obstructed their access and knowledge acquirement. Analyses indicate that social network (kinship network and friendship) and financial locus of control are strongly associated with financial success. One's social network has both positive and negative aspects (“My husband co-signed his brother’s loan and we lost everything I had because he was bankrupt.”; “(My house) is still under water. It is under my name but my wife and everybody else are putting money because I cannot pay.”). Banks rarely provided information unless interviewees ask specific questions, and few reportedly did so. Many did not know what questions to ask. Few participants who sought information acquired the financial knowledge they needed. (“I learned about a down-payment assistance program on newspaper…. At the beginning, I could not understand the program at all… I went to the person in charge several times and asked questions over and over.”). Those with an internal financial locus of control tended to be confident in managing their own finances, while those indicating an external financial locus of control believed that God or someone else (partner) would take care of their finances. The former indicated that they usually seek information actively, while the latter do not. Those with internal locus of control and positive social network tend to have greater financial security (e.g., homeownership, the level of preparation for retirement) than those with external locus of control and negative social network.

Conclusions: Results call for financial institutions’ and community organizations’ active interventions to enhance older Asian immigrants’ financial capability.