How Am I Doing? Perceived Financial Well-Being, Its Potential Antecedents, and Its Relation to Overall Well-Being

67 Pages Posted: 25 Nov 2019

See all articles by Richard G. Netemeyer

Richard G. Netemeyer

University of Virginia - McIntire School of Commerce

Dee Warmath

University of Georgia

Daniel Fernandes

Catholic University of Portugal

John G. Lynch

University of Colorado-Boulder, Leeds School of Business - Center for Research on Consumer Financial Decision Making

Date Written: October 24, 2017

Abstract

Though perceived financial well-being is viewed as an important topic of consumer research, the literature contains no accepted definition of this construct. Further, there has been little systematic examination of how perceived financial well-being may affect overall well-being. Using consumer financial narratives, several large-scale surveys, and two experiments, perceived financial well-being is conceptualized as two related, but separate constructs: 1) stress related to the management of money today (current money management stress); and 2) a sense of security in one’s financial future (expected future financial security). We develop and validate measures of these constructs (web appendix A) and then demonstrate their relationship to overall well-being, controlling for other life domains and objective measures of the financial domain. Our findings demonstrate that perceived financial well-being is a key predictor of overall well-being and comparable in magnitude to the combined effect of other life domains (job satisfaction, physical health assessment, and relationship support satisfaction). Further, the relative importance of current money management stress to overall well-being varies by income groups and that current money management stress and expected future financial security have differing antecedents. Implications for financial well-being and education efforts are offered.

Keywords: perceived financial well-being, scale development, well-being

JEL Classification: I31

Suggested Citation

Netemeyer, Richard G. and Warmath, Dee and Fernandes, Daniel and Lynch, John G., How Am I Doing? Perceived Financial Well-Being, Its Potential Antecedents, and Its Relation to Overall Well-Being (October 24, 2017). Available at SSRN: https://ssrn.com/abstract=3485990 or http://dx.doi.org/10.2139/ssrn.3485990

Richard G. Netemeyer (Contact Author)

University of Virginia - McIntire School of Commerce ( email )

P.O. Box 400173
Charlottesville, VA 22904-4173
United States

Dee Warmath

University of Georgia ( email )

Athens, GA 30602-6254
United States
262-312-0606 (Phone)

Daniel Fernandes

Catholic University of Portugal ( email )

Palma de Cima
Lisboa, 1649-023
Portugal

John G. Lynch

University of Colorado-Boulder, Leeds School of Business - Center for Research on Consumer Financial Decision Making ( email )

Leeds School of Business
Boulder, CO 80309-0419
United States
919-971-5201 (Phone)

HOME PAGE: http://https://www.colorado.edu/business/john-g-lynch-jr

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