The Relationship Between Financial Well-Being and Short Term vs Long Term Financial Behavior


Live Poster Session: Zoom Link


Devin Prettyman

Devin is from Pittsburgh, PA and is currently a sophomore at Wesleyan majoring in economics and government. On campus, he is a member of the men’s lacrosse team and the Wesleyan Investment Group. Devin also enjoys learning about new ski equipment and reading about market news. 


Abstract:

This study looks at an individual’s financial well-being and investigates how it relates to their short term vs long term financial behaviors using data from the 2017 National Financial Well-Being Survey. Prior research differentiated financial behavior into short term vs long term (Wagner & Walstad, 2019) and determined a significantly positive relationship between financial well-being and short term financial behavior as well as a significantly negative relationship between financial well-being and long term financial behavior (Fan & Henager, 2021). This study uses Pearson correlation tests and linear regressions analyze the association between one’s FWB score, short term, and long term financial behavior. Contrary to previous studies, they find that both day to day and long term financial behaviors are significantly positive indicators of overall financial well-being, with day to day behavior having a comparatively stronger effect on the overall score. Other literature fails to recognize the role that age plays in these relationships. A multivariate linear regression finds that while age is not a significant indicator of overall financial well-being, it moderates the relationships between both short term and long term financial behaviors with respect to financial well-being. Future research should look to extrapolate this relationship to overall well-being