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

Journal of Family and Economic Issues, vol. 44, pp. 232–248

Abstract

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.

Authors 6

1. Shekinah E. Dare corresponding Aachen Department of Social Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour

   Leiden University

   Affiliation as printed

   Central Bank of Curaçao and Sint Maarten, Willemstad, Curaçao

   Department of Social, Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour, Leiden University, Leiden, The Netherlands

2. WILCO W. VAN DIJK Aachen Department of Social Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour

   Leiden University

   Affiliation as printed

   Department of Social, Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour, Leiden University, Leiden, The Netherlands

3. Eric van Dijk Aachen Department of Social Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour

   Leiden University

   Affiliation as printed

   Department of Social, Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour, Leiden University, Leiden, The Netherlands

4. Lotte Frederike van Dillen Aachen Department of Social Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour

   Leiden University

   Affiliation as printed

   Department of Social, Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour, Leiden University, Leiden, The Netherlands

5. Marcello Gallucci

   University of Milano-Bicocca

   Affiliation as printed

   Faculty of Psychology, University of Milano-Bicocca, Milan, Italy

6. Olaf Simonse Aachen Department of Social Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour

   Leiden University · Ministry of Finance

   Affiliation as printed

   Department of Social, Economic and Organisational Psychology and Knowledge Centre Psychology and Economic Behaviour, Leiden University, Leiden, The Netherlands

   Ministry of Finance, The Hague, The Netherlands