The Role of Financial Fragility and Financial Control for Well-Being

Financial fragility is recognized as a substantial issue for individual well-being. Various estimates show that between 46 and 59% of American adults are financially fragile and thus vulnerable in terms of their well-being. We argue that the role of financial control in shaping well-being outcomes—despite being less recognized in the literature than the role of financial fragility—is equally or even more important. Our study is a longitudinal cohort study that made use of observational data. Two waves of the Well-Being Survey data from 1448 U.S. adults were used in the analysis. Impacts of financial fragility and financial control on 17 well-being outcomes were examined, including emotional well-being (nine outcomes), physical well-being (four outcomes), social well-being (two outcomes), in addition to an unhealthy days summary measure and the flourishing index. Financial fragility was shown to be on average less influential for the well-being outcomes than financial control. Our results suggest that financial control plays a protective role for complete well-being. Less evidence in support of a harmful role of financial fragility for well-being is provided. Tests for moderation effects revealed no interaction between financial control and financial fragility within our sample, indicating that financial control did not modify the relationship between financial fragility and well-being.