Current and Future Financial Well-Being in 16 Countries

Abstract

Financial well-being – the evaluation of current personal finances and expectations for the financial future – has gained attention in research, practice, and policy. Yet, there is no consensus on its conceptualisation nor its operationalisation. We contribute to this by proposing its conceptual framework and reassessing a measure in data for subjective financial well-being from 16 countries. Our findings highlight methodological concerns in international marketing studies and show not only financial well-being but also its measures to be context dependent. Furthermore, many studies use unidimensional financial well-being measures while some conceptualisations show it to have at least two components, current and future element. We analyse the effects of individual and contextual factors on current and future financial well-being, and explore their possible interaction. We observe income to be a significant predictor of both components of financial well-being, while institutional settings are correlated with current and national culture with future financial well-being. We conclude that initiatives aimed at increasing financial well-being need to clearly target either its current or future component as their antecedents differ.

Construction and validation of a perceived financial well-being scale (PFWBS)

“…Therefore, as there is no consensus on the best way to assess FWB (Riitsalu and van Raaiji, 2022), and Brüggen et al. (2017) suggests that new scales of FWB should be proposed, since the concept is multidimensional.…”

“…, 2020) and contextual factors such as National Culture and Institutional Setting (Barrafrem et al. , 2020; Riitsalu and van Raaij, 2022) influence the way citizens perceive FWB, justifying the creation of a new measure.…”

“…Therefore, developing countries present significant differences when compared to others. Differences in financial markets, in the national economy, government policies, the labor market, levels of social inequality, social relationships and family dynamics (Salignac et al, 2020) and contextual factors such as National Culture and Institutional Setting (Barrafrem et al, 2020;Riitsalu and van Raaij, 2022) influence the way citizens perceive FWB, justifying the creation of a new measure.…”

Well-Being in a Global World—Future Directions for Research in International Marketing: An Editorial

“…In a cross-national study, they find cultural orientations to influence perceived financial vulnerability, which in turn leads to financial decisions that negatively impact individual well-being. Riitsalu and Van Raaij (2022) take a methodological angle to advance the operationalization of financial well-being. In their study of 16 countries, they observe income to be a significant predictor of current and future financial well-being, institutional contexts to correlate with current financial well-being, and national culture to correlate with future financial well-being.…”

How am I doing financially compared to expectations? An experimental comparison of messaging strategies in investor newsletters

“…In this paper, we focus on saving and investing. Savings have a significant positive effect on financial well-being (Riitsalu and Murakas, 2019; Riitsalu and van Raaij, 2022), while investments allow for additional returns on saved funds (Madrian and Shea, 2001). However, there is evidence from many OECD (Organization for Economic Co-operation and Development) countries, that individuals do not save or invest as much as they could and should (Demirgüç-Kunt et al.…”