Determinants of Financial Worry

Abstract

Financial worry is a major issue for many people in developed economies, and the increasing frequency and intensity of financial worry is associated with lower psychological well-being and impaired cognitive functioning. The existing literature currently lacks theory-based studies of financial worry. Grounded in a theoretical model of worry, the present study sought to advance the conceptual and empirical understanding of financial worry. We positioned objective subjective financial stress (OFS), subjective financial stress (SFS), and financial and personal resources as key variables in understanding the psychological mechanisms of financial worry. The cross-sectional data consisted of responses from a representative sample of 19,040 adults, aged 18 and older, drawn from a large U.S. survey. Hierarchical regression results revealed that SFS and financial and personal resources are all key determinants of financial worry. The results also revealed that SFS fully mediated the effects of OFS on financial worry and accounted for the greatest percentage of variance in financial worry (22%, p < 0.001). Furthermore, the results revealed an adverse effect of SFS on financial worry; however, this effect is moderated by financial resources. The implications of our findings for future research, employers, practitioners, and policymakers are discussed.