Springer Nature is making Coronavirus research free. View research | View latest news | Sign up for updates

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

  • 254 Accesses


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.

This is a preview of subscription content, log in to check access.

Fig. 1
Fig. 2
Fig. 3


  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.


  1. Ayllón, S., & Fusco, A. (2017). Are income poverty and perceptions of financial difficulties dynamically interrelated? Journal of Economic Psychology,61, 103–114.

  2. Bailey, W. C., Woodiel, D. K., Turner, M. J., & Young, J. (1998). The relationship of financial stress to overall stress and satisfaction. Personal Finances and Worker Productivity,2(2), 198–207.

  3. Barrington-Leigh, C. P., & Helliwell, J. F. (2008). Empathy and emulation: Life satisfaction and the urban geography of comparison groups (No. w14593). National Bureau of Economic Research. Accessed 20 Sept 2017.

  4. Bonikowska, A., Helliwell, J. F., Hou, F., & Schellenberg, G. (2014). An assessment of life satisfaction responses on recent Statistics Canada surveys. Social Indicators Research,118(2), 617–643.

  5. Brown, S., & Gray, D. (2016). Household finances and well-being in Australia: An empirical analysis of comparison effects. Journal of Economic Psychology,53, 17–36.

  6. Christoph, B. (2010). The relation between life satisfaction and the material situation: A re-evaluation using alternative measures. Social Indicators Research,98(3), 475–499.

  7. D’Ambrosio, C., & Frick, J. R. (2007). Income satisfaction and relative deprivation: An empirical link. Social Indicators Research,81(3), 497–519.

  8. Danes, S. M., & Rettig, K. D. (1993). The role of perception in the intention to change the family financial situation. Journal of Family and Economic Issues,14(4), 365–389.

  9. Diener, E. (1984). Subjective well-being. Psychological Bulletin,95(3), 542–575.

  10. Diener, E., Ng, W., Harter, J., & Arora, R. (2010). Wealth and happiness across the world: Material prosperity predicts life evaluation, whereas psychosocial prosperity predicts positive feeling. Journal of Personality and Social Psychology,99(1), 52–61.

  11. Diener, E., Sandvik, E., Seidlitz, L., & Diener, M. (1993). The relationship between income and subjective well-being: Relative or absolute? Social Indicators Research,28(3), 195–223.

  12. Diener, E., Suh, E. M., Lucas, R. E., & Smith, H. (1999). Subjective well-being: Three decades of progress. Psychological Bulletin,125, 276–302.

  13. Dolan, P., Peasgood, T., & White, M. (2008). Do we really know what makes us happy? A review of the economic literature on the factors associated with subjective well-being. Journal of Economic Psychology,29(1), 94–122.

  14. Easterlin, R. A. (2006). Life cycle happiness and its sources: Intersections of psychology, economics, and demography. Journal of Economic Psychology,27(4), 463–482.

  15. Easterlin, R. A. (2015). Happiness and economic growth–the evidence. In W. Glatzer, L. Camfield, V. Møller, & M. Rojas (Eds.), Global handbook of quality of life (pp. 283–299). Dorderecht: Springer.

  16. Fusco, A. (2016). The dynamics of perceived financial difficulties. Journal of Happiness Studies,17, 1599–1614.

  17. Garðarsdóttir, R. B., & Dittmar, H. (2012). The relationship of materialism to debt and financial well-being: The case of Iceland’s perceived prosperity. Journal of Economic Psychology,33(3), 471–481.

  18. Gasiorowska, A. (2014). The relationship between objective and subjective wealth is moderated by financial control and mediated by money anxiety. Journal of Economic Psychology,43, 64–74.

  19. Grable, J. E., Cupples, S., Fernatt, F., & Anderson, N. (2013). Evaluating the link between perceived income adequacy and financial satisfaction: A resource deficit hypothesis approach. Social Indicators Research,114(3), 1109–1124.

  20. Hayes, A. F. (2012). PROCESS: A versatile computational tool for observed variable mediation, moderation, and conditional process modeling [White paper]. Retrieved from Accessed 20 Sept 2017.

  21. Hayhoe, C. R., Cho, S. H., DeVaney, S. A., Worthy, S. L., Kim, J., & Gorham, E. (2012). How do distrust and anxiety affect saving behavior? Family and Consumer Sciences Research Journal,41(1), 69–85.

  22. Heller, D., Watson, D., & Ilies, R. (2004). The role of person versus situation in life satisfaction: A critical examination. Psychological Bulletin,130(4), 574–600.

  23. Hilgert, M. A., Hogarth, J. M., & Beverly, S. G. (2003). Household financial management: The connection between knowledge and behavior. Federal Reserve Bulletin,89, 309–322.

  24. Hira, T. K., & Loibl, C. (2005). Understanding the impact of employer-provided financial education on workplace satisfaction. Journal of Consumer Affairs,39(1), 173–194.

  25. Hsieh, C. M. (2004). Income and financial satisfaction among older adults in the United States. Social Indicators Research,66(3), 249–266.

  26. Johnson, W., & Krueger, R. F. (2006). How money buys happiness: Genetic and environmental processes linking finances and life satisfaction. Journal of Personality and Social Psychology,90(4), 680–691.

  27. Joo, S. H., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of Family and Economic Issues,25(1), 25–50.

  28. Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences,107(38), 16489–16493.

  29. Keese, M. (2012). Who feels constrained by high debt burdens? Subjective vs. objective measures of household debt. Journal of Economic Psychology,33(1), 125–141.

  30. Latif, E. (2016). Happiness and comparison income: Evidence from Canada. Social Indicators Research,128(1), 161–177.

  31. Lusardi, A. (2008). Household saving behavior: The role of financial literacy, information, and financial education programs (No. w13824). National Bureau of Economic Research.

  32. Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much. London: Macmillan.

  33. Ng, W., & Diener, E. (2014). What matters to the rich and the poor? Subjective well-being, financial satisfaction, and postmaterialist needs across the world. Journal of Personality and Social Psychology,107(2), 326–338.

  34. O’Neill, B., Sorhaindo, B., Xiao, J. J., & Garman, E. T. (2005). Financially distressed consumers: Their financial practices, financial well-being, and health. Journal of Financial Counseling and Planning,16(1), 73–87.

  35. Pereira, M. C., & Coelho, F. (2013). Untangling the relationship between income and subjective well-being: The role of perceived income adequacy and borrowing constraints. Journal of Happiness Studies,14(3), 985–1005.

  36. Plagnol, A. (2011). Financial satisfaction over the life course: The influence of assets and liabilities. Journal of Economic Psychology,32(1), 45–64.

  37. Porter, N. M., & Garman, E. T. (1993). Testing a conceptual model of financial well-being. Financial Counseling and Planning,4, 135–164.

  38. Prawitz, A. D., Garman, E. T., Sorhaindo, B., O’Neill, B., Kim, J., & Drentea, P. (2006). In Charge financial distress/financial well-being scale: Development, administration, and score interpretation. Financial Counselling and Planning,17(1), 34–50.

  39. Sahi, S. K. (2017). Psychological biases of individual investors and financial satisfaction. Journal of Consumer Behaviour,16, 511–535.

  40. Schwarz, N., Strack, F., & Mai, H. P. (1991). Assimilation and contrast effects in part-whole question sequences: A conversational logic analysis. Public Opinion Quarterly,55, 3–23.

  41. Shim, S., Serido, J., & Tang, C. (2012). The ant and the grasshopper revisited: The present psychological benefits of saving and future oriented financial behaviors. Journal of Economic Psychology,33(1), 155–165.

  42. Sinclair, R., Sears, L. E., Probst, T., & Zajack, M. (2010). A multilevel model of economic stress and employee well-being. In J. Houdmont & S. Leka (Eds.), Contemporary occupational health psychology: Global perspectives on research and practice (Vol. 1, pp. 1–20). Hoboken: Wiley.

  43. Statistics Canada. (2013). An assessment of life satisfaction responses on recent statistics Canada surveys. Accessed 20 Sept 2017.

  44. Van Praag, B. M., Frijters, P., & Ferrer-i-Carbonell, A. (2003). The anatomy of subjective well-being. Journal of Economic Behavior & Organization,51(1), 29–49.

Download references


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.

Author information

Correspondence to Brenda Spotton Visano.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

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).

Download citation


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

JEL Classification

  • D12
  • G02