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A Structural Determinants Framework for Financial Well-Being

Author

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  • Lu Fan

    (University of Missouri)

  • Robin Henager

    (Whitworth School of Business)

Abstract

This study develops a conceptual framework that provides a broad understanding of financial well-being. Using the 2018 National Financial Capability Study and structural equation modeling methods, this study provides empirical evidence for the proposed framework by identifying significant direct and indirect determinants of financial well-being. Previous personal financial wellness and financial satisfaction-related research provides a theoretical rationale for the construction of the conceptual framework in the current study. The results reported the relationships among these determinants, including financial perceptions and knowledge factors, financial stress, short- and long-term positive financial behavior, and financial satisfaction. The findings indicate that financial satisfaction, short-term financial behavior, perceived financial capability showed positive and direct associations with financial well-being, whereas financial stress and long-term financial behavior were negatively and directly associated with financial well-being. Financial perception and knowledge factors, financial stress, and short-term financial behavior also showed significant indirect relationships with financial well-being. The findings of this study contribute to the literature on financial well-being and provide significant policy and practical implications. Implications for financial practitioners and policy makers are discussed.

Suggested Citation

  • Lu Fan & Robin Henager, 2022. "A Structural Determinants Framework for Financial Well-Being," Journal of Family and Economic Issues, Springer, vol. 43(2), pages 415-428, June.
    • Handle: RePEc:kap:jfamec:v:43:y:2022:i:2:d:10.1007_s10834-021-09798-w
    DOI: 10.1007/s10834-021-09798-w
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    References listed on IDEAS

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    3. Blain Pearson & Donald Lacombe & Nasima Khatun, 2024. "Likert Scale Variables in Personal Finance Research: The Neutral Category Problem," Econometrics, MDPI, vol. 12(4), pages 1-11, November.
    4. Leonore Riitsalu & Rene Sulg & Henri Lindal & Marvi Remmik & Kristiina Vain, 2024. "From Security to Freedom— The Meaning of Financial Well-being Changes with Age," Journal of Family and Economic Issues, Springer, vol. 45(1), pages 56-69, March.
    5. Julie Birkenmaier & David Rothwell & Jodi Jacobson Frey & Darla Spence Coffey, 2022. "Introduction to the Special Issue on “Financial Capability and Asset Building for Family Financial Wellbeing”," Journal of Family and Economic Issues, Springer, vol. 43(4), pages 647-653, December.
    6. Angela Sorgente & Michela Zambelli & Margherita Lanz, 2023. "Are Financial Well-Being and Financial Stress the Same Construct? Insights from an Intensive Longitudinal Study," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 169(1), pages 553-573, September.
    7. Choung, Youngjoo & Chatterjee, Swarn & Pak, Tae-Young, 2023. "Digital financial literacy and financial well-being," Finance Research Letters, Elsevier, vol. 58(PB).
    8. Bilbao-Goyoaga, Eugenia, 2023. "Perceptions Matter: Quasi-Experimental Evidence on the Effects of Minimum Income on Objective and Subjective Financial Wellbeing in Spain," SocArXiv wv7xt, Center for Open Science.
    9. Fred van Raaij, W. & Riitsalu, Leonore & Põder, Kaire, 2023. "Direct and indirect effects of self-control and future time perspective on financial well-being," Journal of Economic Psychology, Elsevier, vol. 99(C).

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