Direct and indirect effects of self-control and future time perspective on financial well-being

Financial well-being is getting more attention in research and consumer policy, but there is limited understanding of its determinants. In this study, the effects of two psychological factors (self-control and future time perspective) are studied on two components of financial well-being (current money management stress and expected future financial security). Using structural equation modelling in data from 16 countries (n = 15,773), we find that self-control and future time perspective have both direct and indirect effects on the components of financial well-being. The indirect effects are mediated by past and present financial behaviour and have smaller effect sizes than the direct effects. Self-control is the main determinant of current money management stress, while future time perspective is the main determinant of expected future financial security. Our results emphasize that financial well-being should not be treated as a one-dimensional construct. Instead, the interventions for improving financial well-being should clearly target either its present or future component and consider psychological characteristics in their design.