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

  • Shekinah E. Dare Shekinah E. Dare
  • Eric van Dijk Eric van Dijk
  • Lotte F. van Dillen Lotte F. van Dillen
  • Marcello Gallucci Marcello Gallucci
  • Olaf Simonse Olaf Simonse
  • Wilco van Dijk Wilco van Dijk

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.

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