Relationship Between Financial Wellbeing and Subjective Wellbeing | Laboratory Report

Running head: Laboratory Report
“RELATIONSHIP BETWEEN FINANCIAL WELLBEING AND SUBJECTIVE
WELLBEING”
LABORATORY REPORT
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Abstract
The satisfaction from financial domain influences the outcomes of various other domains. This
study aims to explore the association between financial wellness to the subjective wellness
index. The study uses web based questionnaire as research method with random sampling. Data
is collected from 20 participants at the university which involve under graduate students, post
graduate students and the parents of students. Web based questionnaire was used to collect data
where the link was sent to individual participants and the filled forms were retrieved. The results
show significant number of negative responses when compared to positive. The study involved
students as major participant groups. Hence, there is direct association of financial well being
with the subjective well being of the participants which is also influenced by academic
performance and social well being.

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Introduction
Financial Well Being may be termed as one’s perception to sustain his current and expected
living standards along with financial freedom (Bruggen, Hogreve, Holmlund, Kabadayi &
Lofgren, 2017). The individuals can only assess their own financial well being and cannot be
estimated by others. It is a personal attribute and depends on multiple factors like age, gender,
family structure, education and marital status. The people may perceive high or low financial
well being and it does not depend on their objective financial position.
The Subjective Well being may be termed as one’s cognitive and affective evaluation of his life
(Cummins, 2016). It involves extensive factors related to quality of life (QOL) such as inborn
temperament, cognitive judgments, social interactions, ability to meet basic needs, society in
which they live and emotional reactions. These factors reflect the overall satisfaction from his
life. For the students, the subjective well being also involves the academic satisfaction and life
satisfaction.
College graduates aged 20-35 years of age spend 18% of their income in loan payments in US
which reduces their consumption and retirement savings (Bruggen et al., 2017). Average savings
of people in US are just 4% of current salaries. However, they need to save 15-20% annually to
sustain similar living standards after retirement. For 85% of the working people, retirement is not
one of the main priority for savings. Consequently, 69% of the working people are worried about
getting out of money during retirement while 66% are worried about maintain adequate money
for the everyday expenses at old age (Bruggen et al., 2017). This condition reflects that the
financial well being is most important aspect for everyone throughout the world. A balance of
healthy saving and spending is necessary to maintain long term personal and financial well
being. The people who remain indebted most of the age, are at highest risk of depression. Lack
of financial well being leads to personal stress which adversely affects the people, families and
society.

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In wake of extensive need of research on this topic, this study provides evidence based research
on association between financial well being and subjective well being in youth of Australia.
Financial Issues are one of the biggest stressors in the lives of Australian adults (Australian
Psychological Society, 2015). The financial stress gives rise to broad range of adverse outcomes
like reduced QOL (Bruggens et al., 2017). Having adequate resources to satisfy the needs may
act as buffer to the activities which threaten the subjective well being. Financial well being is
associated to happiness through mediating variables. For example, if someone is effectively
handling the financial resources, it may influence his satisfaction and quality of life. The
subjective well being may be assessed in terms of whether my life is close to my ideal in most
ways, the conditions of life are very favorable, high level of satisfaction with life, achievement of
important goals in life and the need to change the condition.
Experiences of financial imbalances (due to foreclosure) are associated with poor behavioral and
psychological indicators like declining health, violent behavior and anxiety. The research
highlights the different factors responsible for financial well being such as contextual factors,
personal factors, traits, skills, attitude and socio demographic factors as identified in the analysis
of collected data.
Research Question & Hypotheses
What is the relationship between financial wellbeing and subjective wellbeing?
The study proposes the following hypothesis: “Positive financial behaviors/ well being is
associated with positive subjective well being”. For testing the hypothesis, co relational analysis
was conducted to identify the available relationship between the two variables.
Rationale