Longitudinal Assessment of Financial Well-Being Across Europe Confirms the Multidimensionality of the Construct

Research on financial well-being (FWB) is experiencing rapid growth despite a lack of internationally validated measures. Most of the literature relies on unidimensional FWB scores calculated as the sum of responses to statements in cross-sectional data from individual countries. We conducted the first Europe-wide longitudinal assessment of two dimensions of FWB and evaluated their measurement invariance. The data were collected in turbulent times (at the time of the COVID-19 pandemic, the beginning of the economic downturn, and the war in Europe) in 12 European countries. Our analysis confirms the FWB’s multidimensionality and its measures’ longitudinal invariance, allowing for cross-wave comparison, while the evidence for cross-country invariance is mixed. We also find that a sense of control and subjective financial knowledge are notable correlates of FWB. However, subjective knowledge is more strongly related to expected future financial security, while the sense of control is related to both dimensions of FWB to different degrees. Our results emphasize the need to distinguish between the components of FWB in appropriate analyses and interventions and to take into account the potentially different structures of FWB in different countries.