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How Executive Functioning and Financial Self-efficacy Predict Subjective Financial Well-Being via Positive Financial Behaviors

Author

Listed:
  • Shekinah E. Dare

    (Leiden University
    Central Bank of Curaçao and Sint Maarten)

  • Wilco W. Dijk

    (Leiden University)

  • Eric Dijk

    (Leiden University)

  • Lotte F. Dillen

    (Leiden University)

  • Marcello Gallucci

    (University of Milano-Bicocca)

  • Olaf Simonse

    (Leiden University
    Ministry of Finance)

Abstract

Financial well-being is a desirable state as it benefits individuals, families, organizations, and society, and these benefits reach beyond the financial domain. We assessed financial well-being as two components (current financial stress and expected future financial security) and used data from a representative sample of adults in the United Kingdom (n = 411). Our study provides novel insights based on preregistered hypotheses, method, and analysis plan on the Open Science Framework. We hypothesized that both executive functioning and financial self-efficacy are positively related to financial well-being via positive financial behaviors. We also hypothesized that executive functioning moderated the indirect relation of financial self-efficacy with financial well-being, and that financial self-efficacy moderated the indirect relation of executive functioning with financial well-being. As predicted, results showed that financial self-efficacy was strongly positively related to financial well-being via positive financial behaviors. Our results did not show that executive functioning was related to financial well-being via positive financial behaviors, nor that executive functioning or financial self-efficacy operated as moderators. This study provides possible strategies for financial practitioners and service providers, among others, to help individuals and families better their financial behaviors and their financial well-being.

Suggested Citation

  • Shekinah E. Dare & Wilco W. Dijk & Eric Dijk & Lotte F. Dillen & Marcello Gallucci & Olaf Simonse, 2023. "How Executive Functioning and Financial Self-efficacy Predict Subjective Financial Well-Being via Positive Financial Behaviors," Journal of Family and Economic Issues, Springer, vol. 44(2), pages 232-248, June.
    • Handle: RePEc:kap:jfamec:v:44:y:2023:i:2:d:10.1007_s10834-022-09845-0
    DOI: 10.1007/s10834-022-09845-0
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    More about this item

    Keywords

    Executive functioning; Financial self-efficacy; Financial behavior; Subjective financial well-being;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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