Study On The Urban Households’ Irrational Behaviors Of Family Financial Management In Hengyang

With the rapid development of Chinese economy, people’s living standards are improving,and household financial assets are increasing, thus financial management has become anincreasingly important issue. Because of the special economic background, the immaturity offamily financial market and the lack of experience, there are many problems in the process ofrapid development of family financial industry, and family financial industry does not form awell-regulated market. At the same time, people’s investment psychology and philosophyhave not yet formed a mature style. As important participants in family financial industry,financial investors engaged in investment activities healthily and rationally, largely determinewhether family financial market can run healthily, stably and continuously. Therefore,in-depth analysis of the investment behavior, psychological characteristics and behaviorpatterns in investing activities is not only an important means of researching family financialmarket, but also an important condition for the protection of investors’ interests. In China, theirrational behaviors of family financial markets are prevalent, and external factors ultimatelyaffect people’s investment behaviors through inner psychological factors. Therefore, thispaper analyses irrational behavior from the perspective of behavioral finance, and usesbehavioral finance theories to guide family financial managers who invest, which haveimportant practical significance to improve the income level of the family and promote thestable development of the domestic financial market.Firstly, the paper defines the concept of family financial management and irrationalbehavior and describes the theoretical basis of this article, prospect theory, portfolio theory,the theory of cognitive biases and behavioral deviation theory. Then, we analyze the forms ofirrational behavior of urban households in Hengyang City by the use of data thatquestionnaires collected. Finally, the influence of education level, risk preferences, householddisposable income on irrational behaviors is discussed by means of statistical softwareSPSS17.0. Results show that: Hengyang family financial behaviors of urban residents haveirrational characteristics, annual disposable income of households have nothing with irrational behavior of their family finances. Education level of urban residents has negative impact onfamily financial irrational behavior; risk preferences of urban residents have a significantpositive effect on family financial irrational behaviors. According to the research results,residents should be rationally with their own family financial condition when finance,financial institutions should optimize the product structure and improve service quality, thegovernment should improve relevant laws and regulations to create a favorable financialenvironment for residents.