Toward better understanding of financial well-being: A literature review

A growing literature examines financial well-being (FWB) and the factors that influence it. However, studies employ a wide range of FWB measures. We examine and organize the literature by type of FWB measure, including composite FWB scales, objective financial outcomes, perceptions of FWB, and financial behaviors. By integrating evidence from studies using diverse measures of FWB, we identify key themes regarding individual-level factors consistently associated with this important concept. One of the main themes emerging from this literature is that differences in definition of FWB or choice of dependent variable do not substantially change the conclusions that are made about contributing factors. Across a wide range of measures, FWB is significantly related to individual competence, confidence, psychological characteristics, and preferences. However, the effects of various factors differ depending on whether measures of FWB reflect current circumstances or are future-oriented.