Save Today for a Happier Tomorrow: Associations Between Happiness and Financial Preparation in Japan

Although earlier studies suggest improvement in relative income affects subjective well-being, literature about how savings and investing relate to happiness is limited. As Japan matures as a society, focusing on happiness among people is important from a public policy perspective. The data for this non-experimental study (n = 1,833) was a subsample of male and female adults from the 2018 and 2019 Keio Household Panel Survey, a nationally representative sample of adults in Japan. Using hierarchical regression models, this study assessed the association between household financial preparations (savings and investments) in 2018 and happiness level in 2019, as well as the association between the happiness level in 2018 and financial preparations in 2019, among adults in Japan. While the prior year’s savings were not associated with a higher happiness level a year later, a higher happiness level was associated with higher savings and investment a year later. Other variables associated with the happiness level and financial preparations include household income and educational attainment. Age had a curvilinear relationship with both happiness and investment. In sum, the findings suggest the bidirectional association between money and emotions; thus, the focus on happiness requires a multi-dimensional approach, including a supportive environment fostering individuals and families to prepare for a financially secure future. The findings have implications for financial services professionals and public policy.