Self-control, future time perspective and savings - the keys to perceived financial well-being

A TFI research project by Leonore Riitsalu & Fred van Raaij
Posted on October 01, 2020

"Self-control, future time perspective and savings - the keys to perceived financial well-being" is one of the research projects supported by the Think Forward Initiative.

Leonore Riitsalu and Fred van Raaij investigate the financial well-being in 16 countries by focusing on two components: current money management stress and expected future financial security. They find a strong relationship with savings. "The more money people set aside, the lower the financial stress in the present and the higher the expected financial security in the future." The authors recommend financial service providers and policy makers to stimulate people to save, rather than focusing on the improvement of financial knowledge.

Read more in the summary below, or download the report!


In recent years, many researchers and policy-makers started to focus on financial well-being. Yet, it is relatively unclear, what this term stands for. For some, it is a synonym for wealth. For others, it relates to the ability to make ends meet both in the present and the future, and increasing financial resilience. We see it as the personal evaluation of the present financial situation and the expectation about one´s financial future. It is more than a particular behaviour, or a certain figure on ones´ saving account. Therefore we decided to use the approach of Netemeyer et al. (2018) who see financial well-being as a subjective matter, the perception of two components – current money management stress and expected future financial security. In our report, we compare the perceived financial well-being levels in 16 countries and analyse the factors correlating with it.

Current money management stress and expected future financial security in 16 countries

In an online survey, more than 15,000 respondents from 16 countries (Australia, Austria, Belgium, Czechia, France, Germany, Italy, Luxembourg, The Netherlands, Philippines, Poland, Romania, Spain, Turkey, USA and United Kingdom) were asked to rate how much they agree or disagree with ten statements, such as “Whenever I feel in control of my finances, something happens that sets me back” and “I am becoming financially secure”. Based on these responses we calculated the mean scores for both components, current money management stress and expected future financial security in each of the countries (see Figure 1) and for the entire sample.


Figure 1. Current money management stress and expected future financial security (mean score, max=5)

The relationship between psychological characteristics and perceived financial well-being

To study further the factors correlating with the perception of financial well-being, we asked the participants a few questions about their personal psychological characteristics. Based on responses to statements such as “I’m good at resisting temptation” and “I take each day as it comes”, we calculated their self-control and future time perspective scores. Those with more self-control are better at behaving prudently, rather than overspending on an impulse. People focussing on their future needs are more likely to plan for their long-term financial goals than those concentrating only on the present responsibilities and desires.

We were interested to see how personal characteristics correlate with financial well-being in a large sample representing various parts of the world. Although we did expect these factors to be correlated with financial well-being, we were surprised to see how high the correlation is. Self-control has a significant negative correlation with CMMS – those with more self-control have lower money management stress. Future time perspective has a substantial positive correlation with EFFS – those more oriented towards future goals perceive to have secured their financial future more. Those with higher income have less money management stress in the present and perceive their future to be more secured.

Savings are essential

Besides the individual characteristics we analysed the correlation between saving and the perceived financial well-being. We found having savings to be highly correlated with both components of perceived financial well-being in all countries. Therefore, having savings is essential for reducing current money management stress and for feeling secure about ones´ financial future. Hence, nudging individuals towards starting to set money aside and increasing their savings must be even more the focus of the policymakers, promoters of financial education and providers of financial services.

Possible correlation with economic and cultural background

Besides psychological and socio-economic characteristics, the context has an effect on financial well-being, Brüggen (et al., 2017) showed in their financial well-being framework that contextual factors such as the economic, legal, political and socio-cultural factors play a role in financial well-being. We decided to contribute to that and calculated the correlation between perceived financial well-being, a few economic and cultural indicators. As our sample included 16 countries, and in three of them the data was representative only of the online population, we can only shed some light on the matter without providing any conclusive results. However, we found an indication that income inequality has a higher correlation with financial well-being than the GDP per capita. Similar results have been found in a study conducted in five countries by Kempson (2018). This also supports the arguments of Ruggeri (2019, p. 223) on overemphasizing the role of GDP as the main predictor of well-being in previous research, he states: “equating well-being for a group or country to its economic growth is insufficient”.

A newly identified group

We developed four groups, based on the midpoints of the two perceived financial well-being components and found an interesting group of people with high current money stress but that believe they have secured their financial future. 10% of the sample belongs to this struggling but optimistic group. We presume people in this group could be founders of start-ups and some of the people working in gig economy who take their career choice as an investment into their future, at the expense of present well-being, but current data does not allow us to test that hypothesis. The only socio-economic characteristic we noted to differ in this group from other three groups is that they are in relatively young age. Interestingly, we find them to have lower self-control but to be highly future oriented, compared to the other segments.

Practical implications

They key contributions of this study are the international comparison of the two components of perceived financial well-being; showing two personal characteristics, self-control and future time perspective, to have significant correlations with perceived financial well-being . We highlight the main implications:

  • Self-control and future time perspective have high correlations with financial well-being. Innovative apps can serve as personal trainers of both self-control and future time perspective as they make vague future goals more concrete and tangible, helping to imagine what one might need to keep or reach the desired living standard in the future.
  • Savings have a significant correlation with both components of perceived financial well-being. The more money set aside, the lower the financial stress in the present and the higher the expected financial security in the future. Therefore, the providers of financial services should invest even more in persuading consumers to start saving and offering innovative tools that make the decision more attractive and entertaining. Similarly, policy-makers providing financial education should put the emphasis on pre-committing and nudging individuals towards saving, rather than focusing on the improvement of financial knowledge.


  • Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228–237.
  • Kempson, E. (2018, November 26). Financial Capability and Well-Being. An international comparison. National Research Symposium on Financial Literacy, Toronto.
  • Netemeyer, R. G., Warmath, D., Fernandes, D., Lynch, J. G., Fischer, E., & Toubia, O. (2018). How Am I Doing? Perceived Financial Well-Being, Its Potential Antecedents, and Its Relation to Overall Well-Being. Journal of Consumer Research, 45(1), 68–89.
  • Ruggeri, K. (Ed.). (2019). Behavioral Insights for Public Policy: Concepts and Cases. Routledge.