Exploring cultural finance: A phenomenological approach to comparative cultural perceptions of money in Mexico

Economists who support conventional economic theory assume that individuals are fully rational; however, several studies indicated that financial practitioners make the same mistakes repeatedly. Behavioral finance researchers have suggested that people make financial mistakes because decisions are based on perceptions and beliefs that depart from rational behaviors. Perceptions and beliefs are related to culture. Thus, in the current study a cultural finance paradigm was introduced to examine the potential link between culture, money, and financial behavior. A qualitative phenomenological study was performed to understand how culture plays a role in the perception of money. A comparative analysis was conducted between two different cultural groups in North Mexico; Hispanic Mexicans and North American Mennonites. The purpose was to determine how their respective cultures influence their perception of money and their financial decisions. The use of a modified Seidman's interview method was utilized to conduct in-depth unstructured interviews to ten participants from each cultural group; data obtained was analyzed using Moustakas phenomenological approach. Findings concluded that each cultural group experienced and perceived money differently. Each group utilized a distinctive frame of reference to guide financial decisions. Evaluation of results revealed that cultural principles were followed unconsciously and guided group behavior. A theory of cultural anchors was advanced to explain this phenomenon. The key findings of the research were that financial decisions of Hispanic Mexicans were guided by the idea or cultural anchor, that money is a means for self-gratification. The financial decisions of North American Mennonites were guided by a different idea, or cultural anchor, that money ought to be used for production. Based on the qualitative evidence in this study, it was concluded that cultural issues play a role in financial behavior because of their respective upbringing. The recommendations for future research include testing the cultural anchors theory using quantitative methods.