From Security to Freedom— The Meaning of Financial Well-being Changes with Age

• Published in: Journal of family and economic issues Vol. 45; no. 1; pp. 56 - 69
• Main Authors: Riitsalu, Leonore, Sulg, Rene, Lindal, Henri, Remmik, Marvi, Vain, Kristiina
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.03.2024; Springer Nature B.V
• Subjects: Age differences; Age groups; Family; Freedoms; Lifestyles; Literature reviews; Meaning; Middle age; Older children; Older people; Original Paper; Personality and Social Psychology; Qualitative research; Quantitative analysis; Social Policy; Social Sciences; Sociology; Well being; Youth; Financial freedom; Financial literacy; Financial well-being; FIRE; Financial security; Subjective financial knowledge
• ISSN: 1058-0476; 1573-3475
• DOI: 10.1007/s10834-023-09886-z

Financial well-being is becoming more prominent in policy, research, and the financial sector. However, there is a lack of understanding of its meaning, and the vast majority of financial well-being research employs quantitative methods whereas recent literature reviews advocate for qualitative studies into the meaning of financial well-being and its associations with age. We contribute to that by conducting exploratory qualitative research into the phenomenon of perceived financial well-being and its components. It is based on three studies each of which used in-depth semi-structured interviews ( N  = 47). The first key finding is that youth perceive financial well-being to be comprised of three components: keeping the current lifestyle and making ends meet; achieving desired lifestyle; and achieving financial freedom. In contrast, older groups distinguish only two: keeping and achieving the lifestyle in the present and in the future. The second finding is that the definition of financial freedom differs across age groups. Young people aspire to become financially independent, while middle-aged individuals prioritize supporting their children, and older people are afraid of becoming a financial burden. Third, regardless of age, many do not plan, save or invest for securing their financial well-being. We conclude by proposing implications for increasing financial well-being in different age groups, and suggesting paths for further investigation.