Financial Wellbeing and Subjective Wellbeing

Running head: FINANCIAL WELLBEING AND SUBJECTIVE WELLBEING
Relationship between Financial Wellbeing and Subjective Wellbeing
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FINANCIAL WELLBEING AND SUBJECTIVE WELLBEING 2
Abstract
The scientific novelty of the study is to find out association between financial wellbeing
and subjective wellbeing in Australian context. It aims to explore and find out the relationship of
attitude to money with other psychological phenomena - satisfaction with life and happiness. an
interpretation of the concepts of “subjective quality of life” and “subjective economic well-
being” from the perspective of the concept of social representations is proposed, thus, another
perspective for the development of a socio-psychological concept of the quality of life of an
individual (group) is outlined. A set of components of subjective financial well-being and
subjective well-being is presented, thereby enriching the idea of the structure of the quality of
life

FINANCIAL WELLBEING AND SUBJECTIVE WELLBEING 3
Introduction
At this stage in the development of psychological science, there has been an increase in
the number of publications and scientific articles devoted to the study of well-being, subjective
well-being, and life satisfaction (Luhmann, Hawkley, Eid and Cacioppo 2012). Interest in this
issue has always existed, but now there is a particularly clear tendency towards the priority of
studying the association between financial wellbeing and subjective wellbeing. This is because
modern Australians are obsessed with their financial wellbeing so much that they rank it among
their best source of subjective wellbeing. That is why according to study conducted by Australia
Psychology Society (2015), it was found that 49 percent of Australians consider personal finance
as the top cause of stress. Another study conducted by Pennington (2018) reveals that
Australians have formed an organization called Financial Independence, Retire Early (FIRE)
whose goal is to promote financial independence. The article noted that modern Australian
consider financial independence as their ultimate goal in life. Those who are pursuing the
financial independence consider financial wellbeing as a source of security. The funny thing
about these Australians is that they engage in a host of thrifty habits, including cycling to work,
buying second hand clothing, foraging for wild foodstuffs and spending just $100 a week on
groceries. However, Chalmers (2018) paint a bleak picture in regard to debt. These sources
clearly suggest that the quest for financial wellness is not going to end soon. It also makes us to
ponder whether financial wellness alone is a guarantee of subjective wellness. Ability to answer
this question will help us in coming up with recommendations for Australians. The findings may
be of us to millions of Australians who are immersed in the journey of financial independence
hoping that financial wellbeing will assure them subjective wellbeing. The results of an empirical
study can be applied in areas such as psychological counseling, medicine, social policy. A

FINANCIAL WELLBEING AND SUBJECTIVE WELLBEING 4
competent social policy is based on monitoring various aspects of the life of social groups, which
requires the development of a system of social indicators - common, objectively measurable
attributes that are consistent with fundamental social tasks. Studies of the structure of the quality
of life of an individual or social group are designed to help in the search for adequate social
indicators.
Goals and objectives
Despite a fairly large number of studies, their analysis shows that at present there is no
single point of view regarding the content of the concept of subjective wellbeing and its key and
underlying components. So, in socio-psychological works devoted to the problem of studying the
features of a person’s assessment of his whole life, along with the term “life satisfaction”, the
concepts of “wellbeing” and “subjective wellbeing” are used. Therefore, there is a need to
disclose the components, correlate and differentiate these concepts. Financial component is
highly overrated. However, it is not clear whether financial wellbeing guarantee subjective
wellbeing. Thus, the purpose of this study is to determine whether financial wellbeing guarantee
subjective wellbeing. To achieve this goal, it is necessary to solve the following tasks:
 To reveal the elements and components of subjective well-being
 To determine whether there is association between financial wellbeing and subjective
wellbeing
Hypothesis
The study is guided by the following null hypotheses.
 There is no significant relationship between financial wellness and psychological stability
 There is no significant relationship between financial wellbeing and decent social status