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“Havin’ Money’s Not Everything, Not Havin’ It Is”: The Importance of Financial Satisfaction for Life Satisfaction in Financially Stressed Households

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Abstract

This paper explores the importance of financial satisfaction for overall life satisfaction in households whose principal source of subjective stress is financial. Using data drawn from 2 waves (2005, 2010) of the nationally representative General Social Survey in Canada, we find that for financially stressed Canadian households, their stress-affected sense of financial well-being overwhelmingly conditions their overall sense of life satisfaction. We consider as well the potential for financial stress to moderate the relationship between income and life satisfaction but find only a modest effect and then only for high income households in 2005.

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Notes

  1. 1.

    In the official version of the “Good Life,” the relevant line reads “Having' money's the everything that having' it is.” Lyrics © EMI Music Publishing, Sony/ATV Music Publishing LLC, Warner/Chappell Music, Inc, Universal Music Publishing Group. Songwriters: Kanye West, Aldrin Davis, James Ingram, Quincy Jones, Michael Dean, John Stephens, Faheem Najm.

  2. 2.

    Confounding the disputed conceptual relationship is the considerable ambiguity in the meanings of the constructs being measured. This may be due in part to the challenge presented by the multi-disciplinary nature of this research where researchers in one discipline adopt vocabulary that bumps up against discipline-specific conventions in another. For example, where economists would make a clear and consistent distinction between income (as revenue per period of time that excludes debt) and wealth (as the stock of assets net of liabilities which can generate income but is valued independently of time and accounts for debt), psychologists may not.

  3. 3.

    It is worth recalling here that respondents reporting high non-financial stress as their primary source of stress may be experiencing financial stress as well.

  4. 4.

    The income information included in the 2005 and 2010 surveys is rudimentary; we have access to nominal household income brackets only and so opt to employ dummy variables in our analysis. Since we are not working with a continuous variable, we cannot use a price index to simply deflate 2010 nominal values into constant 2005 dollars, e.g., to obtain a single, consistent, continuous income variable. Choosing income bracket mid-points as a proxy for a continuous income variable is complicated by the fact that we are using 2 years of data, 5 years apart. As such, the middle of an income bracket in 1 year of data will not equal the middle of the same nominal income bracket in the second year of data. Instead, for each survey year we create dummy variables that indicate if a household nominal income falls below twenty thousand dollars or above one hundred thousand dollars.

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Acknowledgements

We thank Michael Beenstock and Jennifer Robson for helpful discussions. We thank Fouad H. Beseiso, Talita Greyling and Stephanie Rossouw for encouraging comments. An anonymous reviewer provided helpful remarks and suggestions that improved the clarity of the exposition. The usual caveat applies.

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Correspondence to Brenda Spotton Visano.

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Brzozowski, M., Spotton Visano, B. “Havin’ Money’s Not Everything, Not Havin’ It Is”: The Importance of Financial Satisfaction for Life Satisfaction in Financially Stressed Households. J Happiness Stud 21, 573–591 (2020). https://doi.org/10.1007/s10902-019-00091-0

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Keywords

  • Subjective financial stress
  • Financial satisfaction
  • Life satisfaction
  • General Social Survey

JEL Classification

  • D12
  • G02