Measuring financial well-being over the lifecourse

Abstract

Financial well-being is a relatively new construct that attempts to measure subjective financial status and perceived future financial trajectory. Using a large public cross-sectional dataset, we find that a standardized financial well-being score generally tracks income, wealth, and participation in investment markets, as well as markers of positive and negative financial behavior. However, financial well-being measures attributes that are distinct from general subjective well-being and financial literacy measures, especially over the life course. Financial well-being can be a useful construct to include in new surveys but can also be proxied in existing public datasets, as we demonstrate using separate survey data.