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Judgment and Decision Making, Vol. 4, No. 1, February 2009, pp. 102–112
“Am I going to be happy and financially stable?”: How American
women feel when they think about financial security
Talya Miron-Shatz∗
Princeton University
Abstract
Before the recent recession evoked general dismay and uncertainty, this study examined the relative contribution of
income and the concern over financial security to life satisfaction. The degree to which such concerns permeate people’s
daily lives could be part of the broader concept of wealth, often measured through income and debt, and could help
evaluate fiscal instruments promoting financial security. Study 1 (N= 267) used econometric methods to demonstrate
that the consideration of financial security was as important to participants’ life satisfaction as their monetary assets.
Further, outlook on financial security adds to the prediction of life satisfaction above the contribution of income. Content
analysis revealed that nearly half the participants (N= 651, Study 2) mentioned financial concerns — retirement, college
tuition, making ends meet, etc. — when asked to think about “the future” in an open-ended manner. These participants
reported lower life satisfaction compared with women who did not raise such concerns. The link between concerns over
financial security and life satisfaction, which cannot be fully accounted for by income alone, could guide policy decisions
on whether to directly allocate resources toward increasing income or to focus on creating a social and financial safety
net.
Keywords: financial security, income, life satisfaction, well-being.
1 Introduction
This study aimed to assess the degree to which women’s
concerns over financial security permeate their daily
lives. The notion of financial security, I claim, is a valid
and meaningful factor in the construct of wealth, yet is
glaringly missing from economic discussions, as well as
from examinations of the association between wealth and
life satisfaction. Assessing the depths of financial se-
curity concerns could serve to evaluate fiscal tools pro-
moting such security. In addition, expanding the concept
of wealth should inspire well-being researchers and pol-
icy makers to inquire participants about financial security
alongside questions about income.
Researchers have often failed to prove the widespread
belief that income accounts for a substantial portion of
life satisfaction (Diener & Lucas, 1999; Helliwell, 2003;
Myers, 2000). Easterlin (1974, 2001, 2005) referred to
the puzzling dissociation between money and satisfac-
tion as the “illusion of growth and happiness,” (2005, p.
∗The author thanks Steve Hoch, Daniel Kahneman, Mark
Schlesinger, Hans Yoachim Voth, two anonymous reviewers and Jon
Baron for comments on earlier versions of this paper, and Mary Him-
melstein and Janie Qi for excellent assistance. The author acknowl-
edges support for this study from the Center for Health and Wellbeing,
Princeton University. Address: 327 Wallace Hall, Center for Health
and Wellbeing, Princeton University, Princeton, NJ, 08544. Email: tm-
iron@princeton.edu.
429) and this disparity has been dubbed “The Easterlin
Paradox.” One of the proposed explanations was the sat-
isfaction treadmill, (Kahneman, 1999, 2000) according
to which an improved financial state raises aspirations so
that the person now wishes for greater financial gains or
other achievements, thus preventing satisfaction from in-
creasing. The satisfaction treadmill implies that in order
to fully understand the association between financial sta-
tus and life satisfaction, we need to go beyond measures
of income and material possessions to examine people’s
evaluations.
Recent research (Deaton, 2008, Stevenson & Wolfers,
2008) has all but resolved the Easterlin paradox by using
log income, rather than raw income, to predict life satis-
faction. The logarithmic transformation allows reflection
of the non-linear utility of income. As income increases,
finding ways to increase well-being through consumption
becomes more difficult, yet still possible. The transfor-
mation results in strong association between economic
and well-being measures. Furthermore, Deaton (2008)
has used it to show that no satiation point exists beyond
which increments in log income no longer contribute to
an increase in life satisfaction. However, some questions
remain unanswered. One of them, which the satisfaction
treadmill touches upon, asks what encompasses people’s
mental representation of wealth. Another question raised
by Stevenson and Wolfers (2009) asks why measures of
102
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
103
subjective well-being show that women’s happiness has
declined both absolutely and relative to men despite indi-
cations of major improvements for women in economic
wealth and work force participation over recent decades.
The researchers term this “the paradox of declining fe-
male happiness.”
1.1 Domains of life satisfaction
Although most research on life satisfaction has tended to
utilize measures of global satisfaction (e.g., Andrews &
Withey, 1976; Diener, Emmons, Larsen & Griffin, 1985),
it has often been argued that satisfaction is better mea-
sured with specific life domains (Campbell, Converse,
& Rodgers, 1976; Cummins, 1996; Hsieh, 2003, 2004,
2008). In Cummins’ (1996) taxonomy, the domain of
material well-being, which incorporates the domains of
“finances,” “economic situation,” “material possessions,”
and “standard of living,” among others, accounted for
the second largest variance in life satisfaction ratings,
after the intimacy domain. Similarly, this study exam-
ined the degree to which one’s evaluation of financial se-
curity helps expand the concept of wealth and perhaps
increase the fraction of life satisfaction previously ex-
plained merely by income.
1.2 Study overview
In past research, women have appeared to experience
more negative emotion than men regarding financial mat-
ters; women worry more about financial services, in-
vestments, and financial risk (Ricciardi, 2008). Steven-
son and Wolfers (2009) offer several explanations for
women’s declining life satisfaction, among which is
Hochschild’s argument (1999, with Munchung) that
women maintain the emotional responsibility for home
and family. Another explanation points to increasing in-
equality, which raises concerns about increasing income
volatility, and a more general concern about households
bearing more health and retirement risk (Hacker, 2006).
These findings show that women have ample reasons for
worry and also point to their being inclined to agonize
over various matters. Yet psychological writing seldom
considers feelings of financial security. For example,
Diener and Biswas-Diener (2008) discuss the benefits
of having money, among which the researchers list so-
cial status, pleasure in shopping, and personal control.
Personal control, such as being able to pay for repairs
when one’s car is involved in a hit and run accident, can
translate as a practical demonstration of financial secu-
rity, but the anxiety over security may be sorely present
even where no predicament arises. Therefore, the present
study examined the role that thoughts on financial issues
play in women’s lives. This inquiry was premised on
the assumption that people do not think to please them-
selves. Indeed, women often dwell on thoughts about
life domains that are predominantly unpleasant (Nolen-
Hoeksema, Larson, & Grayson, 1999).
The goal of this study is to expand upon the existing lit-
erature on women’s concerns regarding financial security
and their association with life satisfaction in two ways:
1. Demonstrating the importance of financial security
by showing that women’s feelings on financial se-
curity contribute to their life satisfaction even when
measures of assets and income have already been
considered.
2. Documenting the extent to which women contem-
plate financial issues. In Study 2, women were asked
to think about “the future” without being prompted
to focus on finances or other specific content. Such
a procedure allows for concerns about financial is-
sues to emerge naturally, as well as for participants
to express their emotions about the topics that con-
stitute ”the future” for them. This inquiry tests the
legitimacy and the merits of the budding focus on
psychological measures in the financial domain as
determinants of well-being.
2 Study 1
Study 1 involved a close-ended examination of a sub-
jective measure of the financial domain: women’s feel-
ings about their own financial security. The main hy-
pothesis was that the frequency with which women think
about financial security and their experience when having
such thoughts would add significantly to the prediction of
life satisfaction that was made using the log of women’s
household income.
2.1 Method
2.1.1 Participants
A survey company recruited 267 women from a Midwest-
ern city in the United States with a demographic com-
position closely resembling that of the country in gen-
eral (Mage = 43.70 years, SD = 10.51). All participants
spoke English at home and worked either part or full time.
Most of the participants (71%) were married or cohabit-
ing. The median household income of the sample was
between $60,001 and $70,000, and the modal household
income (of 19.5% of the participants) was over $100,001.
2.1.2 Materials and Procedure
The participants arrived at a conference center, where
each of them followed the Event Reconstruction Method
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
104
protocol developed by Kahneman, Schkade, Schwartz,
and Miron-Shatz (2006) and completed the question-
naires individually. They first listed their life satisfac-
tion on the Satisfaction with Life Scale (Diener et al.,
1985). Then they were prompted to think of the most re-
cent episodes in which they engaged in 10 specific activ-
ities, such as exercising, shopping, or resting. Three sets
of 10 activities were selected from a set of 20, leaving
some overlap between versions. Participants were ran-
domly assigned to complete one of the sets. The 20 activ-
ities were the following: working, exercising, shopping,
having an extended conversation, doing housework, tak-
ing care of your children, reading, lovemaking, prepar-
ing food, having lunch, grooming, commuting, playing,
praying, walking, listening to music, watching television,
relaxing, having dinner. The participants noted the loca-
tion, starting and ending times, partners, and actions for
each episode. They rated the extent to which they ex-
perienced various emotions, from 0 (not at all) to 6 (very
much). The emotions were the following: happy, friendly,
calm, interested, competent, angry, tense, depressed, im-
patient for it to end, tired. Participants also completed an
abbreviated version of the Big Five personality inventory
(Donnellan, Oswald, Baird, & Lucas, 2006).
In the final portion of the study, participants reported
how they felt while engaged in “personal thoughts”
from specific thought domains, and how often they had
these thoughts. They rated their emotions concerning
these thoughts using the same scale they used for rat-
ing episodes. For example, a participant might be asked,
“When you think about love and relationships in your life,
what do you feel?” There were 18 thought domains di-
vided into three versions, and each participant was ran-
domly assigned a version. Version 1: love and relation-
ships; respect you get from others; your house and home;
getting older; current events, news politics; and spiritual
aspects of your life; Version 2: your weight; your chil-
dren (if any); your hobbies; your future; your work; med-
ical insurance; Version 3: your family; financial security;
your looks; your health; your faith and religion; your
marriage (if married). The data reported here are from
the 267 participants in Version 3.
2.1.3 Measures
Difmax. To capture the emotional valence of a thought,
we used a measure termed difmax (for difference of max-
imums), which is calculated as the rating of “happy” mi-
nus the maximal ratings of “angry,” “tense,” and “de-
pressed” as rated for a specific thought. Difmax was de-
signed to capture the principle that “bad is stronger than
good,” (Baumeister, Bratslavsky, Finkenauer, & Vohs,
2001), so that negative emotions will outweigh positive
emotions of similar intensity. For instance, Miron-Shatz
(2009) found that experiences which participants defined
as “peaks” had far less impact on their overall evalua-
tion of a day than “lows” (see also Miron-Shatz, Stone &
Kahneman, 2009, for findings regarding how experienced
negative affect, but not positive affect, is consistently em-
phasized in memory). Finally, the intercorrelation of neg-
ative emotions was r= .55, whereas that of positive emo-
tions was r=.67. This suggested that in order to pick up
on any negative emotion, we needed to include more than
one of them in the equation. Difmax correlated .95 with
an affect balance measure, composed by subtracting the
average of the three negative emotions from the average
of “happy,” “friendly,” and “calm” (Kahneman, Krueger,
Schkade, Schwarz, & Stone, 2004a).
Frequency. Each participant reported the frequency
with which she had thoughts about financial security on
the following 4-point scale: 1 (never), 2 (rarely), 3 (at
least once on most days), or 4 (many times each day).
Life satisfaction. Participants responded to the Satis-
faction with Life Scale (Diener et al., 1985). They stated
the degree to which they agreed with each statement, such
as “If I could live my life over, I would change almost
nothing,” on a scale of 1 (strongly disagree) to 7 (strongly
agree).
Personality. Personality was measured using an abbre-
viated version of the Big Five personality inventory (Mini
IPIP, Donnellan, Oswald, Baird, & Lucas, 2006). The av-
eraged ratings for the items that measured each person-
ality trait were averaged to form ratings for neuroticism,
extraversion, agreeableness, consciousness, and intellec-
tualism.
Demographics. Participants were also asked a num-
ber of demographic questions. These included age (in
years), household income, and home ownership status.
Annual household income was measured on an 11-point
scale with each point corresponding to a specific income
range (0 = $10,000 or less; 1 = $10,001 — $20,000; 2 =
$20,001 — $30,000; . . . 9 = $90,001 — $100,000; 10
= more than $100,000). Finally, home ownership status
was rated on a simple 3-point scale: 1 = renting or oth-
erwise living in a home that is owned by someone else;
2 = owns a home with a mortgage; and 3 = owns a home
free-and-clear.
2.2 Results
As Table 1 indicates, the women often had thoughts of
financial security. Only a small proportion of the par-
ticipants (18.7%) rarely thought about financial security,
and very few participants reported never thinking about it
(0.4%).
The frequency of thinking about financial security and
financial security difmax were negatively correlated (r=
−.504, p= .000), suggesting that frequent thoughts about
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
105
Table 1: Study 1: The difmax of thoughts related to financial security by their frequency
Rarely At least once on most days Many times each day
Proportion in the sample 18.7% 46.1% 35.2%
Difmax of thoughts related to
financial security (SD)
1.88 (2.75) −.54 (2.48) −2.26 (2.32)
B as predictor of life satisfac-
tion
.163, p < .01 .158, p < .01 .220, p < .001
financial security were associated with unpleasant emo-
tions, though the direction of causality cannot be deter-
mined by the data. Table 2 lists the correlations among
all the major variables.
As Table 2 indicates, log household income is nega-
tively correlated with the frequency of thoughts about fi-
nancial security (r=−.13, p< .05) and positively corre-
lated with financial security difmax (r= .36, p< .001).
To test the hypothesis that thoughts on financial secu-
rity add to the prediction of life satisfaction as made by
income, a hierarchical regression was conducted, first en-
tering age and the Big Five personality factors as predic-
tors. This model yielded an adjusted R2of .166. In the
second step, the log of household income, home own-
ership status, and the frequency and difmax of thoughts
about financial security were added to the model. The ad-
dition of these four factors explained significantly more
variance in life satisfaction (Adjusted R2= .33, F(10,
253) = 14.10, p< .001). Moreover, three of the factors
had significant effects (in descending order): log income
(B= 2.62, SE = .70, β= .228), financial security thought
difmax (B= .661, SE = .157, β= .270) and thought fre-
quency (B=−1.283, SE = .576, β=−.133). Home own-
ership did not have a significant effect in this model (B=
−.106, SE = .492, β= .013, ns).
Partial correlation coefficients were as follows where
“satisfaction” indicates the Satisfaction with Life Scale,
“income” indicates log household income, “frequency”
indicates frequency of thoughts about financial security,
and “difmax” indicates the difmax of thoughts on finan-
cial security:
satisfaction and income, controlling difmax: .218
satisfaction and income, controlling frequency: .296
satisfaction and difmax, controlling income: .381
satisfaction and frequency, controlling income: −.304
Importantly, the last two correlations are not much lower
than the corresponding raw correlations in Table 2 (.46
and −.35, respectively). Thus, women’s feelings about
financial security seem to contribute to their life satisfac-
tion as much as income does, and, roughly, in a way that
is somewhat independent of income.
To further test Hypothesis 1, life satisfaction was pre-
dicted using the mean values and Bvalues (from the gen-
eral regression equation) of age, home ownership, the Big
Five personality factors, and — when the group-specific
values were not entered — annual pre-tax household in-
come and financial security difmax. The predicted score
on the Satisfaction with Life Scale for people in the 25th
income percentile (between $30,001 and $40,000) was
22.32, and for people in the 75th income percentile (be-
tween $80,001 and $90,000) it was 24.77. The gap be-
tween these values (2.45) translates to an increase of 7%
in life satisfaction. The predicted life satisfaction score
for people in the 25th percentile of financial security dif-
max (−3) was 21.96, and for people in the 75th percentile
(1) it was 25.10. The gap between these values (3.14)
translates to an increase of 8.9% in life satisfaction.
These results support the main hypothesis and indicate
that the affect and frequency of thoughts about financial
security are not only capable of predicting life satisfac-
tion almost to the same degree as household income, but
also add to the prediction of life satisfaction as made
through household income. Thus, the predictive ability
of thoughts on financial security is unlikely to be a mere
artifact of the methodological similarity in the way dif-
max and the Satisfaction with Life Scale are measured.
2.3 Discussion
The results of Study 1 illustrate the importance of the
thoughts on financial security to women’s well-being.
The results further suggest that it is the emotionality of
these thoughts, rather than their mere presence, as indi-
cated by frequency, that drives the association between
these thoughts and life satisfaction. Thus, in order to fully
explain life satisfaction using the construct of “wealth,”
this construct needs to be expanded beyond the aspects
of financial wealth that enable consumption to include
the notion of financial security. Extra care has been taken
in demonstrating that the importance of financial security
to life satisfaction prediction does not result merely from
the methodological similarity between the two variables.
This was done by including personality variables in the
regression model, which are assumed to be the underly-
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
106
Table 2: Study 1: Correlations between frequency and difmax of thoughts about financial security and major variables
1 2 3 4 5 6 7 8 9
1. Thought Frequency
2. Thought Difmax −.50
3. Life Satisfaction −.35 .46
4. Log Income −.13∗.35 .36
5. Extraversion −.04a.08a.17 .07∗
6. Agreeableness .00a
−.09a.11∗∗ .05a.26
7. Conscientiousness −.08a.17∗∗ .14 .09∗∗ .02a.12
8. Neuroticism .37 −.42 −.42 −.20 −.11∗∗
−.01a
−.17
9. Intellect −.01a
−.04a.08∗.04a.28 .27a.03a
−.09∗
10. Home ownership −.08a.14* .17 −.52 −.05a.00a .05a
−.08∗.00a
1 2 3 4 5 6 7 8 9
Note. All ps < .001 unless indicated otherwise. *p < .05. **p < .01.
ing mechanisms for rating tendencies. However cautious
the analysis has been, it could not completely exclude
the possibility that rating tendencies existed. On another
vein, making the claim that women’s assessment of fi-
nancial security expands the concept of wealth seems de-
ficient without knowing what financial concerns women
are thinking of. What topics do they find distressing, and
do they brood over them without being prompted to do
so? In Study 2, a more qualitative approach was applied
to answer these very questions.
3 Study 2
Study 2 was designed to establish the relative prevalence
of thoughts about financial matters by having participants
evaluate thoughts about “the future” and then asking them
what these thoughts involved. The proportion of women
who mentioned financial concerns in response to this
question showed the relative importance of finances to
the women in our study. Additionally, for the women who
reported thinking about finances, I sought to replicate the
finding from Study 1 that women’s feelings on finances
have a large effect on their reported life satisfaction. Key
to Study 2 was the research question of what proportion
of women would be preoccupied with finances with re-
gards to their future. Hypothesis 1 was that women who
are financially preoccupied will report lower life satisfac-
tion compared with women who do not mention financial
concerns in their future. Hypothesis 2 was that whether
women are financially concerned would be predicted by
financial measures. Finally, content analysis would reveal
what particular forms of financial concerns women have.
3.1 Method
3.1.1 Participants
A survey company recruited 615 women from a South-
western city in the United States. The demographic com-
position of the sample resembles the overall demographic
composition of women in the United States (Mage =
42.00 years, SD = 10.46). Most of the women (56.4%)
were married or cohabiting, and 92.4% had a paying
job, either full or part time. The median household in-
come was $50,001–$60,000 and the modal income was
between $40,001 and $50,000 (this group comprised 18%
of the sample). Of the participants, 14% were in the upper
income bracket (above $100,000).
3.1.2 Materials and procedure
The participants arrived at a conference center, where
each of them followed the Day Reconstruction Method
protocol (Kahneman et al., 2004a, 2004b). Participants
first completed the Satisfaction with Life Scale (Diener
et al., 1985). Then they reported what they did during
the previous day, dividing the day into episodes and rat-
ing how they felt during each episode, using the same
emotions and the same scale of 0 (not at all) to 6 (very
much) as in Study 1. Participants then completed the Mini
IPIP (Donnellan et al., 2006) and reported how they felt
when they thought of various life domains, using the 0
to 6 scale. The domains were the following: your finan-
cial status, your health, your children (if any), and the
future. Finally, the participants answered the open-ended
question, “When you just answered about ‘the future’ —
what were you thinking about?”
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
107
3.1.3 Measures
Difmax, frequency and life satisfaction were measured in
the same manner as in Study 1. Personality was also mea-
sured with the same scale used in Study 1, yielding sep-
arate values for extraversion, neuroticism, conscientious-
ness, agreeableness, and intellectualism.
Domains of future thoughts. Responses to the open-
ended question about the content of participants’ thoughts
on the future were classified according to Cummins’
(1993, 1996) taxonomy of the 7 domains of life satisfac-
tion: financial well-being, intimacy, productivity, health,
emotional well-being, safety, and place in community.
Two independent raters coded each response about the fu-
ture. Reliability (Cronbach’s Alpha for un-standardized
ratings) ranged from α= .75 to α= .94, Mα= .88 (SD =
.07). Since the responses were open-ended, women could
elaborate on more than one domain. As such, the sum of
the percentages reported below exceeds 100%.
A response was coded as referring to financial well-
being (hereon: financially concerned) if it included any
of the following: a direct reference to money, debts, ex-
penses (such as college tuition), bills, material posses-
sions, work as a necessity rather than as a means for self
fulfillment, or concerns about supporting oneself through
retirement. A woman who mentioned “work,” “retire-
ment,” or other issues such as “kids in college” was
coded as financially concerned only if she explicitly re-
ferred to the financial aspect of this domain. Thus, 60
women who mentioned “retirement” without making ex-
plicit reference to money were not classified as finan-
cially concerned, even though some of them might have
meant to indicate they worried about supporting them-
selves through old age.
Wealth measures. In addition to annual household in-
come and home ownership status, participants in Study
2 reported how much they (and their spouses, where rel-
evant) owed in regular debt (i.e., loans, mortgage) and
in credit card debt (these were two separate questions).
Participants also indicated their employment status (full-
time, part-time, unemployed, student, retired, etc.).
3.2 Results
The domain classifications of the open-ended responses
are displayed in Table 3, along with example responses.
A substantial proportion of the participants (42%, t(619)
= 21.21, p< .0001, CI = 38% to 46%) were classified
as raising financial concerns based on their responses to
the open-ended question about their thoughts on the fu-
ture. References to the financial domain were second
only to the domain of intimacy (50%), replicating Cum-
mins’ (1996) findings (see also Campbell et al., 1976;
Easterlin, 2006).
Some of the participants (16%) spoke of the future in
terms that did not correspond with any of the 7 domains.
This corresponds with Cummins’ finding that 20% of the
domains used in the studies that he reviewed did not fit
into his taxonomy.
In support of Hypothesis 1, that women who are finan-
cially preoccupied will report lower life satisfaction com-
pared with women who do not mention financial concerns
in their future, financially concerned women had signifi-
cantly lower difmax scores on thoughts about the future
and lower life satisfaction ratings (M= .53, SD = 2.83 and
M= 22.06, SD = 7.05) than did the non-financially con-
cerned women (M= 1.44, SD = 2.64, and M= 23.79,
SD = 6.04), t(594) = −4.06, and t(601) = −3.27, p=
.001, respectively, p< .001 for both. Financially con-
cerned women thought about the future more frequently
(M= 3.25, SD = .64) than did non-financially concerned
women (M= 3.09, SD = .72), t(612) = 2.83, p< .01.
To test for Hypothesis 2, that financially concern would
be predicted by financial measures, a regression was con-
ducted using both personality traits and financial indi-
cators as predictors. If these predictors would explain
a large proportion of the variance, one could claim that
there is no need for a query of one’s subjective interpre-
tation of her financial status. The model yielded an ad-
justed R2= .043. The strongest predictor of being finan-
cially concerned was the total amount of money that a
woman (and her spouse, where relevant) owed in loans,
including mortgages (standardized regression coefficient
β= .107, p= .03, and the confidence interval = be-
tween .003 and .043). The only other significant predictor
was conscientiousness (β=−.102, p< .02, confidence
interval = between - .028 and - .003). Intellectualism
was a marginally significant predictor (β=−.082, p<
.06, confidence interval = between −.025 and 0). Log
household income, home ownership, employment status,
amount owed in credit card debt, age, and the person-
ality traits neuroticism, extraversion, and agreeableness
were not significant predictors of financial concern. In-
deed, the household incomes of financially concerned
and non-concerned women were roughly the same, with
both groups averaging an income of between $50,001 and
$60,000, t(603) = .29, ns. These results provide partial
support for hypothesis 2, as they indicate that some, but
not all of the economic measures are associated with be-
ing financially concerned.
3.2.1 Content analysis of financial concerns in
thoughts of the future
By and large, referring to money in one’s image of the fu-
ture was associated with concerns about maintaining the
existing financial situation or achieving some form of fi-
nancial security. A very small proportion of the women
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
108
Table 3: Study 2: Examples of the Domains of Life Satisfaction and Financial Sub- Domains
Domain of life satisfaction Percent of
responses
Examples
Intimacy 50% “My aging parents, my children, the possibility of a partner.”
Material well-being 42% “Will I always have to struggle with finances?”
Productive activity 26% “My future career goals,” “Excelling in my new job,” “My busi-
ness and keeping it going.”
Emotional well-being 15% “Want to be healthy physically and mentally as well,” “Travel
plans. . . ”
Health 14% “What life will be in the future with RA &diabetes.”
Safety 4% “Society-prejudices, war — being attacked again. ..“ “War, des-
titution.”
Community 1% “Peace for mankind”
No specific domain 16% “What my life will be like in ten years,”
“What’s going to happen when I get old.”
Sub-domain of material
well-being
Percent of mate-
rial thoughts
Examples
Finances 45% “Having enough income in my family not to have to worry about
money everyday!”
Retirement 35% “. . . where I will spend my retirement years and will I have
enough health and money to live a decent life.”
Stability and income 13% “What job I will be at. ..Am I going to be happy and financially
stable?”
Buying or renovating
home
11% “. . . losing my house because of finances.,” “Buying a house.”
Supporting children 10% “Children’s college expenses,” “Leaving an inheritance for my
children.”
Paying bills 6% “Getting out of debt,” “. . . paying mortgage off.”
Health and health insur-
ance
2% “Financial stress, aging and the health problems that will most
likely cause.”
Note. A given response could be classified as touching on multiple domains. Thus, the example sentence
given for “Retirement” as a sub-domain of “Material Well-Being” was also coded for the domain of “Health.”
Thus, the percentages both in the domains and in the financial sub-domains add up to over a 100%."
referred to their financial situation in an explicitly pos-
itive manner. One such participant expressed “thinking
about the appreciation I have for my parents who left me
an inheritance which gives me some financial stability.”
Finer analysis of the open-ended responses indicated
that the most prevalent sub-topic was finances in gen-
eral (45%; see Table 3), with responses such as “Hav-
ing enough income in my family not to have to worry
about money every day!” The second most common topic
within the domain of material well-being concerned re-
tirement (35%). This too was characterized by distress,
such as “I think about where I will spend my retirement
years and will I have enough health and money to live a
decent life.”
Some women portrayed a bleak financial future, often
coupled with the lack of a support network, where retire-
ment seemed like a fantasy: “I am nearly 50. My husband
decimated my life savings in two short years. I doubt I
will ever have a life partner and I am going to work till
I die. I have no children. This is not the life I wanted.”
A small proportion of the financially concerned women
(13%) were so classified because they referred to work
in terms of stability and income. One woman, for exam-
ple, wondered “What job I will be at, if I am going to be
working paycheck to paycheck. Am I going to be happy
and financially stable?”
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
109
Additional worries of the financially concerned in-
cluded buying or renovating a home (11%), supporting
children and paying tuition (10%), paying bills (6%), and
health or health insurance (2%). Only one person referred
to the economic status of the country.
3.3 Discussion
The results of this study point to the centrality of thoughts
about financial security and other financial issues in
women’s images of the future. Many women were con-
cerned with these thoughts, which were associated with
lower affective ratings than thoughts regarding other top-
ics. Furthermore, most financial circumstances, such as
household income, home ownership status, and credit
card debt did not predict whether or not a woman in our
sample would include financial matters in her image of
the future. Finally, financial issues were mentioned by
women more often than other domains that were pre-
viously found to be strongly important to life satisfac-
tion, such as health and emotional well-being (Cummins,
1996). This demonstrates that women are often con-
cerned with financial issues and that these preoccupations
merit examination and inclusion in the greater concept of
wealth, as they do not merely reflect monetary circum-
stances.
4 General discussion
Speaking of her future, one of the participants asked,
“Will I be happy and financially stable?” The findings
suggest that happiness and the sense of financial stability
are not independent and that the latter might be driving
the former, at least to some degree. This study demon-
strated that financial issues are of great concern to women
and that perceived financial security is closely associated
with life satisfaction, almost to the degree of actual in-
come. The findings resonate with research indicating that
the feelings associated with thoughts of various life do-
mains are better predictors of life satisfaction than a de-
mographic index composed of circumstances such as in-
come, marital status, and health (Miron-Shatz, Saphire-
Bernstein, & Diener, 2009).
Despite growing discontent with the use of income and
material success as indicators of subjective well-being
(Dolan & White, 2007; Frank, 1999), current economic
and policy thinking, for the most part, does not use emo-
tional measures in evaluations of financial and social pol-
icy. The direct measurement of the emotions associated
with the financial domain is made all the more important
by the fact that these emotions are not well predicted by
a person’s income, assets, or financial obligations.
Nearly half of the participants in Study 2 sponta-
neously mentioned financial concerns when asked what
their thoughts on the future entailed. These concerns
often dampened potentially joyful events, as with the
woman who said, “First child on the way so thinking
about providing for the baby.” Some women worried
about having to work even when they reached retirement
age, while others worried about making ends meet. In-
corporating financial issues in one’s image of the future
was associated with lower satisfaction regarding thoughts
about the future, and with lower life satisfaction, relative
to those who did not think about money. Household debt
(including loans and mortgages) predicted who would in-
clude money in their thoughts about the future, but fac-
tors such as income, home ownership and age did not.
This suggests that, whereas the term “financial security”
may only signify existential danger to a few people, the
concern over financial security appears to be important
to the person who experiences it, and that, perhaps con-
trary to conventional wisdom, it is not only the poor or
those in debt who fret over financial matters. Researchers
have been finding that adaptation to changes in life cir-
cumstances, such as marital status, is less than complete,
so that happiness levels may not bounce back after such
events. Researchers attribute this to personality differ-
ences, or to the fact that some events, such as unemploy-
ment, result in a new and lower set-point of happiness
(Lucas, Clark, Georegellis, & Diener, 2003, 2004, re-
spectively). It would be interesting to examine if the fac-
tor underlying reduced life satisfaction, particularly fol-
lowing unemployment, is a lingering want of a sense of
financial security.
The studies presented here involved women only,
which may not fully reflect the effect of thoughts about
finances for the population as a whole. Nonetheless, pre-
vious studies have found that women tend to ruminate
more than men, a finding that has been linked to gender
differences in depressive symptoms (Nolen-Hoeksema et
al., 1999). Likewise, women tend to worry about finan-
cial issues more than men (Ricciardi, 2008). Steven-
son and Wolfers (2009) suggest that, on average, women
in the United Stated and Europe report declining hap-
piness relative to men over recent decades. The find-
ing, they claim, “is difficult to reconcile with changes
in objective circumstances” (p. 4). The present findings
suggest that financial security, which broadens the con-
cept of wealth beyond financial circumstances as they ap-
pear through bankbooks or consumption, may partially
account for women’s diminishing life satisfaction. Fur-
thermore, monetary wealth was measured in a somewhat
noisy manner, given that, say, a yearly income of $60,000
creates a very different level of wealth for a single woman
as opposed to the case of a single mother with four chil-
dren. In contrast, thoughts about financial issues are more
Judgment and Decision Making, Vol. 4, No. 1, February 2009 Thinking about financial security
110
Figure 1: “I’m Desperate.” Wearing selected random
passer-bys and asked them to write their thoughts on a
piece of paper (© Gillian Wearing, courtesy Maureen Pa-
ley/ Interim Art, London, and the Tate Museum).
adept at self correcting for such variables. In order to
address the claim that thoughts of financial security pre-
dict life satisfaction due only to shared method variance, I
measured the presence of such thoughts in an open-ended
inquiry and not just their affective value, which is most
influenced by rating tendencies.
Future research should expand the scope of this inves-
tigation by examining men’s thoughts to see whether they
include concerns about financial matters in their image of
the future, and whether their feelings on financial secu-
rity also predict their life satisfaction to the same degree
as their income. Figure 1 presents Gillian Wearing’s pho-
tograph from the series, “Signs that Say What You Want
Them to Say and Not Signs that Say What Someone Else
Wants You to Say”. The photograph helps illustrate men’s
feelings on financial security and that such feelings can-
not necessarily be deduced through mere observation.
Future research should also establish whether think-
ing about money in one’s future is characterized by ru-
mination or worry. Worry typically involves a need for
understanding, while rumination involves an avoidance
of the worrisome topic (Watkins, 2004). If preoccupa-
tion with financial security is a form of worry, it might
be associated with being committed to a goal (Martin &
Tesser, 1989). In this case, experiencing more unpleas-
ant emotions while thinking of the future might be off-
set by taking action toward achieving increased financial
security. Limitations notwithstanding, this study has an-
swered Rozin’s call (2007) to begin mapping the holes
in current psychological knowledge regarding pivotal as-
pects of everyday life. The study also adheres to Baz-
erman’s (2001) suggestion that consumer research focus
on consumers’ real-world needs and concerns, enabling
consumers to make better choices.
However, not all manifestations of financial insecurity
can be resolved by individual choices. Amir et al. (2005)
advocate policy changes that would utilize behavioral
insights for overcoming individual shortcomings. The
widespread preoccupation of women with financial secu-
rity echoes Hacker’s (2006) argument that the dwindling
support net and the increasing privatization of wealth
add uncertainty to the lives of lower and middle-income
women as pension benefits, medical insurance, and many
other forms of social support depend on the good will of
employers. This study highlights the emotional costs of
financial insecurity across income levels.
Diener and Seligman (2004) presented a case for the
creation of a national well-being index to guide pol-
icy decisions. Along the same lines, Dolan and White
(2007) proposed that measures of subjective well-being
can and should be incorporated into the assessment and
planning of economic policies and interventions. Sub-
jective well-being, the researchers claim, is not benefi-
cial solely for providing an account of mental states. It
can also be used to monitor the utility of accounts that
are more focal to economic thinking: those of objective
lists and life conditions (Sen, 1999) and of desire fulfill-
ment (Harsanyi, 1982). Results from the present study
suggest that women’s feelings on financial security and
the frequency of these thoughts could effectively link the
broader psychological concept of wealth with objective
and subjective economic criteria and policy outcomes.
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