Exploring Financial Wellbeing in the Australian ... - CSI · The Project Steering Group was a panel of policy and academic experts in the field of financial wellbeing, financial literacy

EXPLORING FINANCIAL WELLBEING IN THE AUSTRALIAN CONTEXT Appendices to Final Report

APPENDICES September, 2017

Muir, K., Hamilton, M., Noone, J.H., Marjolin, A, Salignac, F., & Saunders, P. (2017). Exploring Financial Wellbeing in the Australian Context. Centre for Social Impact & Social Policy Research Centre – University of New South Wales Sydney, for Financial Literacy Australia

Exploring Financial Wellbeing in the Australian Context

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Table of Contents APPENDIXA:RESEARCHMETHODS...........................................................................................3

SCOPINGREVIEW...............................................................................................................................3QUALITATIVERESEARCH......................................................................................................................3QUANTITATIVERESEARCH....................................................................................................................6STAKEHOLDERCONSULTATIONS.............................................................................................................7PROJECTSTEERINGGROUP..................................................................................................................7

APPENDIXB:HOWISFINANCIALWELLBEINGMEASUREDINTHELITERATURE?.........................8

CONSUMERFINANCIALPROTECTIONBUREAUFINANCIALWELLBEINGSCALE.................................................8MOMENTUMUKINDEXOFFINANCIALWELLNESS....................................................................................8NORWEGIANSTUDYOFFINANCIALWELLBEING........................................................................................9

APPENDIXC:DIMENSIONS,SUB-DIMENSIONSANDSURVEYITEMSFORFINANCIALWELLBEING

ANDTHEPROPOSEDINFLUENCERSOFFINANCIALWELLBEING................................................10

APPENDIXD:HOWTHEMODELOFFINANCIALWELLBEINGWASDEVELOPED..........................23

PRELIMINARYMODEL........................................................................................................................23TESTINGANDREFININGTHEPRELIMINARYMODEL...................................................................................24SCORINGFORTHEFINALMODEL..........................................................................................................26

APPENDIXE:DESCRIPTIVESTATISTICS.....................................................................................27

APPENDIXF:BIVARIATECORRELATIONS..................................................................................29

APPENDIXG:REGRESSIONANALYSIS.......................................................................................30

APPENDIXH:TOWARDSAMEASUREMENTSYSTEMFORFINANCIALWELLBEING....................35

OBJECTIVITYANDSUBJECTIVITY...........................................................................................................35TIMEDIMENSION–NOWVERSUSTHEFUTURE.......................................................................................36FUTUREDIRECTIONS.........................................................................................................................36

REFERENCES............................................................................................................................38


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List of Tables Table1:Characteristicsoftheone-on-oneinterviewparticipants.............................................4Table2:Financialwellbeingdimensions..................................................................................10Table3:Sub-dimensionsandcorrespondingsurveyitemsfordimension1..............................10Table4:Sub-dimensionsandcorrespondingsurveyitemsfordimension2..............................11Table5:Sub-dimensionsandcorrespondingsurveyitemsfordimension3..............................11Table6:Influencersoffinancialwellbeing...............................................................................12Table7:Preliminaryconceptualmodeloffinancialwellbeing..................................................24Table8:Rotatedfactorloadingsforpreliminarymodel...........................................................25Table9:Factorloadingsforfinalmodel...................................................................................26Table10:Descriptivestatisticsforcontinuousvariables..........................................................27Table11:Descriptivestatisticsforcategoricalvariables..........................................................28Table12:Correlationsbetweenstudyvariables.......................................................................29Table13:Overallfinancialwellbeingregressedonthestudyvariables....................................31Table14:Feelingfinanciallysecureregressedonthestudyvariables......................................32Table15:Beingincontrolregressedonthestudyvariables.....................................................33Table16:Meetingexpensesregressedonthestudyvariables.................................................34


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APPENDIX A: RESEARCH METHODS

Scoping review

Ascopingreviewofexistingresearchandevidencerelatingtofinancialwellbeing,

financial stress and financial resilience, enabled us to critically analyse how

financialwellbeingiscurrentlydefinedandmeasured,toidentifykeyfactorsthat

influence itandto identifygaps incurrentunderstanding.Usingthereviewwe

developed a preliminary conceptual framework of financialwellbeing thatwas

subsequently tested in the qualitative and quantitative research phases.More

than 80 articles and reportswere identified in the scoping review. The review

identifiedthreemajorgapsintheliterature:

• Limited reference to the broader societal or structural factors thatinfluencefinancialwellbeing.Muchoftheexistingresearchexcludesthe

influenceofstructuralfactorssuchasglobalfinancialmarkets,government

policy,andnationaleconomyonfinancialwellbeing.Instead,theprimary

focusisontheindividual.

• Alackoffocusonfinancialwellbeingacrossthelifecourse:Whilemany

studies acknowledge that aspects of financial wellbeing can interactaccording toageand life stages, few studieshave conceptualised these

relationshipsacrossthelifecourse.Variouslifeevents,suchasmovingout

ofhome,purchasingahome,childrearingandcaringforolderparents,can

occur atdiscreet life stages. Yet all these life events arehighly likely to

influencefinancialwellbeing.Alifecourseperspectiveaccountsforboth

chronologicaltimeandlifeeventsandtheiralignment[1].

• Ambiguity in definitions: There is limited agreement on how financial

wellbeing is defined and measured [2]. For example, while one study

conceptualisesfinancialbehaviourasanintegralpartoffinancialwellbeing

[seeforexample,3],anotherconsidersitasanexternalinfluence[seefor

example,4].Thelackofclarityaroundwhetherfactorsactasantecedents,

components or outcomesof financialwellbeing, hinders the theoretical

developmentandapplicationofarobustfinancialwellbeingframework.

Qualitative research

Focusgroupsandone-on-oneinterviewswereundertakenbetweenAugustand

November2016.Apurposivesampleofparticipantswasselectedtocoverawide

demographyandrangeofsocioeconomicandpersonalcircumstances.Thesample

included 72 participants: 9 focus groups with 54 people living in Australia of

different ages, genders, and socio-economic statuses; and 18 one-on-one

interviewswithpeopleexperiencingchallengestotheirfinancialwellbeing.

The research teamused the services of a recruitment agency and our existing

ongoingrelationshipswithtargetedserviceprovidersandcommunitygroupsto


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support the recruitment of participants. This enabled the research team to

maximise numbers, improve sampling precision and decrease recruitment cost

andtime.The interviewswiththoserecruitedallowedtheteamtoexploreand

makecomparisonsbetweenexperiencesaccordingtogender,age, income,and

geographicalarea.

Toincludepeoplefromdifferenthouseholdandfamilytypes(e.g.singleparents,

people with caring responsibilities), from culturally and linguistically diverse

backgrounds, and people who have experienced challenges to their financial

wellbeing, the research teamworked with a number of recruitment partners,

including Western Legal Service (Victoria), Women’s Legal Service (Victoria),

CarersNSW,NationalCouncilofSingleMothersandtheirChildrenandMission

Australia.ThecompositionoftheinterviewsampleissetoutinTable1,below:

Table1:Characteristicsoftheone-on-oneinterviewparticipants

Socio-demographiccharacteristics Participantnumbers

Lowincome 15

Culturallyandlinguisticallydiversebackground 4

Caresforafamilymemberwithadisabilityorillness 6

Soleparent 5

Hasadisability 2

Youngunemployed/recentlyunemployed 4

Livinginaregionalorruralarea 3

Totalindividualinterviewees 18

Note:Thecategoriesarenotmutuallyexclusivesosomeparticipantsarecounted

morethanonce.

Focusgroupswereheldintwourbanandoneregionallocation.Theone-on-one

interviewsalsofollowedasemi-structureddiscussionguide(seebelow)andasked

thesamequestionsasinthefocusgroups.Mostinterviewswereface-to-facebut

in several instances participants expressed a preference for undertaking the

interviewbyphone.Threeparticipantswereinterviewedwiththesupportofan

interpreter(threedifferentcountriesoforigin).Focusgroupsandinterviewswere

transcribedandthematicanalysiswasundertakenusingNVIVOqualitativedata

managementsoftware.


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Focus group and interview questions

Whatisfinancialwellbeing?

1. Whatdoesbeinginagoodfinancialsituationmeantoyou?

2. Whatarethethingsthatcontributetoyourfinancialsituation?

3. Talkingaboutyourfinancialsituation,aresomethingsmoreimportantin

everydayliving,andotherthingsmoreimportantin‘thelongrun’?Canyou

elaborate?

4. Whatmakesyoufeelhappywithyourfinancialsituation?

Financialliteracyandwellbeing

5. Howdoyoujudgehowgoodorbadyourfinancialsituationis?

6. Doyouthinkfinancialknowledgeorinformationcanaffectyourfinancialsituation?How?

7. Whatkindsofbehavioursdoyouthinkareimportanttobeinginagood

financialsituation?

Differencesbetweengroups

8. Whichfactorsarethemostimportanttobeinghappywithyourfinancial

situation?Why?

9. Arethereanyfactorsthatyouthinkareparticularlyimportantforpeopleof

youragefeelinghappywiththeirfinancialsituation?

10. Arethereanyfactorsthatyouthinkareparticularlyimportantfor

men/womeninfeelinghappywiththeirfinancialsituation?

Influencers

11. Whatgetsinthewayofhavingagoodfinancialsituation?

12. Whatcanhelpimproveyourfinancialsituation?


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Quantitative research

Drawing on the preliminarymodel developed through the scoping review and

qualitativework,theresearchteamdesignedasurvey.Thesurveyincludeditems

that covered each dimension and sub-dimension in the preliminary model of

financialwell-being.Italsoincludeditemsforeachofthe‘influencers’offinancial

well-being that emerged as important in the literature and qualitative work.

Finally,thesurveyincludeditemstocollectdemographicinformationtosupport

theanalysis.

Thesequestionswerelargelytakenfromexistingquestionnairesincluding:

• TheHouseholdIncomeandLabourDynamicsinAustralia(HILDA)survey,

• ArecentNorwegianSurveyoffinancialwellbeing[5],

• TheFinancialResiliencesurvey[6],

• TheAustralianBureauofStatisticsCensus,

• ThePovertyandExclusioninModernAustralia(PEMA)survey[7],2012).

Thefulllistofquestions(andresponsecategories)isprovidedinAppendixC.The

survey was administered over twoweeks in early December 2016. Data were

collectedbyRoyMorganResearchandwereweightedtoberepresentativeofthe

adult population based on age, gender and location of residence. The 821

participantscamefromRoyMorgan’sOzPaneldatabase,whichisapanelsample

derivedrandomlyfromtheirSingleSourcesurveyofapproximately50,000people.

AnonlinesurveywasusedtocollectthedataovertwoweeksinearlyDecember.

Factor analysis and regression analysis techniques were used to test our

conceptual model of financial wellbeing and to identify factors that influence

financialwellbeing.YoucanreadmoreaboutthesetechniquesinAppendixD.The

statisticalanalysiswasusedtoansweranumberofresearchquestionsincluding:

What is financial wellbeing?What influences financial wellbeing? How do the

differentinfluencescombinetohaveanimpactonfinancialwellbeing?Thishelped

ustounderstand“howwell”theinfluencers(andtheircombinedeffect)explain

why some people have low financial wellbeing and others have high financial

wellbeing.

In keepingwitha life courseapproach,wealsoanalysed thedata to see if life

events (e.g. divorce, losing one’s job) might influence financial wellbeing in

differentwaysdependingontheageoftheparticipants.


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Stakeholder consultations

Telephone interviews were conducted with 11 expert stakeholders including

financial advisors, educators, counsellors and consumer representatives in

NovemberandDecember2016.Expertstakeholderswerecontactedandaskedto

participate in a telephone consultation. A sample of the stakeholders was re-

contacted in April 2016 for comment on a revised version of the conceptual

framework.

The stakeholder consultations were used to inform and refine the conceptual

framework with an emphasis on the practical implications as well as the

componentsoffinancialwellbeingandthefactorsthatcontributetoit.

Project Steering Group

TheprojectwasalsoguidedbyaSteeringGroup.TheProjectSteeringGroupwas

apanelofpolicyandacademicexpertsinthefieldoffinancialwellbeing,financial

literacy and financial inclusion across government, corporate and the not-for-

profit sectors. The Steering Groupmet four times throughout the project and

provided expert guidance in the development of the framework for financial

wellbeinganditspracticalimplications.


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APPENDIX B: HOW IS FINANCIAL WELLBEING MEASURED IN THE LITERATURE? Financial wellbeing has been measured in a variety of ways in the literature,

including differences in the type of measures used (subjective or objective

measures) and the relationships between them; the inclusion, or exclusion, of

enablers andbarriers; and the considerationof structural and systemic factors

that influence financialwellbeing.We explore below three of themost recent

studiestohighlightthevariousapproachestomeasuringfinancialwellbeing.

Consumer Financial Protection Bureau Financial Wellbeing Scale

TheConsumerFinancialProtectionBureau[8]developeda10-itemscaletoassess

anindividual’sleveloffinancialwellbeing,definedas“theextenttowhichtheir

financialsituationandthefinancialcapabilitythattheyhavedevelopedprovide

them with security and freedom of choice.” The scale includes 10 questions

aroundthefourelementsidentifiedbytheConsumerFinancialProtectionBureau

askeytofinancialwellbeing:

• Havingcontroloverday-to-day,month-to-monthexpenses;

• Havingthecapacitytoabsorbafinancialshock

• Beingontracktomeetyourfinancialgoals;and

• Havingthefinancialfreedomtomakethechoicesthatallowyoutoenjoylife

[CFPB2]

Whiletheirresearchacknowledgesthepresenceoffactorsattheindividuallevel

(such as age) and more broadly – including financial behaviours, financial

knowledge,personaltraits,thesocialandeconomicenvironment,andlifestages

– theseare, for themostpart,notconsidered in themeasurementof financial

wellbeing.

Momentum UK Index of Financial Wellness

BuildingontheworkofMomentuminSouthAfrica,theMomentumUKIndexof

FinancialWellness [9] usesmicro andmacro indicators to assess the financial

wellbeing of UK individual and households. Themicro index comprises seven

domainsassessingvariousdimensionsoffinancialwellnessattheindividuallevel

thatcontribute70%oftheoverallindexscore.Themacroindexcontributesthe

remaining30%, andencompasses “threemacro-economic indicators chosen to

provideaholisticoverviewofthenationaleconomy:theunemploymentrate,GDP

per capita and the Gini coefficient of income inequality” [9]. Each domain


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contributesamaximumoftenindexpoints,withahigherindexscoreindicatinga

higherleveloffinancialwellness.

Norwegian Study of Financial Wellbeing

TheConsumerResearchNorwaygroup (Kempson,Poppe&Finney,2017)have

recentlyundertakenanationalstudyof financialwellbeing.Aselectionof their

measures of financial behaviours were used in the quantitative phase the

research.Kempsonetal.[5]alsobuiltonexistingtheorytodevelopamodelof

pathwaysbetweenenablersandbarriers.

Intheirstudy,avarietyoflife-stage,demographicandeconomicfactorswerealso

considered at the individual level in relation to the determination of financial

wellness.Regressionanalyseswerealsoconductedtoexaminetherelationship

betweendemographicandsocio-economicfactorsandfinancialwellness.


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APPENDIX C: DIMENSIONS, SUB-DIMENSIONS AND SURVEY ITEMS FOR FINANCIAL WELLBEING AND THE PROPOSED INFLUENCERS OF FINANCIAL WELLBEING Appendix C defines the financial wellbeing dimensions (Table 2), sub-dimensions and

correspondingsurveyitems(Table3–5),andthepotentialinfluencersoffinancialwellbeing

(Table6).Table6describestheroleofeachinfluencer(e.g.,afinancialbehaviourorfinancial

knowledge),itslevel(e.g.,individual-level),thewordingforeachsurveyitemandtheresponse

categories.

Table2:Financialwellbeingdimensions

Financialwellbeingmeans…

Meetingexpensesand

havingsomemoney

leftover

Beingincontrol Beingfreeoffinancial

worries

Table3:Sub-dimensionsandcorrespondingsurveyitemsfordimension1

Dimension1 Meetingexpensesandhavingsomemoneyleftover

Definition Referstoyourfinancialcircumstances,andincludeshavingadequateincome

tomeetbasicneedsandenablechoicesinspending.Thismeanshaving

enoughtopayexpensesandpayoffdebt,andthenhavinga‘buffer’incaseof

unexpectedexpensesandsomesavingsor‘abitextra’toaffordsomeextras.

Sub-

dimensions

Abilitytomeet

expenses

Manageable

debt

Savings

buffer

Abletoafford

“littleextras”

Ableto

make

choices

regarding

spending

andlife

planning

Survey

questions

Inthelast12

months,how

difficultwasit

foryoutomeet

yournecessary

costofliving

expenseslike

housing,

electricity,

water,health

care,food,

clothingor

transport?[6]

(1)Verydifficult---(5)Veryeasy

Whatisyour

currentlevel

ofdebt?[6]

(1)morethanIcanpayback(2)justmanagingtopaybackdebt(3)payingdebtscomfortably(4)payingdebtverycomfortably

Whatis

your

current

levelof

savings?[6]

(1)Nosavings(2)<1month’sincome(3)1-2months(4)3-6months

Whenwasthe

lasttimeyou

bought

something

specialfor

yourself-

something

thatyou

wouldn’t

normallybuy?

[7](1)never/morethanayearago(2)<1year(3)<3months

Thesurveyquestionsfor‘savingsbuffer’and‘abletoaffordlittleextras’aretreatedasproxiesforbeing‘abletomakechoices’


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(5)Ihavenodebts

(5)6+months

(4)<Month(5)Thisweek


Dimension2 Beingincontrol

Definition Exercisingcontrolmeanshavingasenseofcontroloveryourfinancial

situationinthepresentandfuture

Sub-

dimensions

Havingcontroloveryourfinancial

situation

Settingandpursuinglong-termgoals

Survey

questions

Towhatextentdoyouagreeor

disagreewiththefollowing

statements(1-5scale):

“Myfinancialsituationislargely

outsideofmycontrol”?[adapted

from5]

Towhatextentdoyouagreeor

disagreewiththefollowing

statements(1-5scale):

“Isetlong-termfinancialgoalsand

strivetoachievethem”[10]


Dimension3 Feelingfinanciallysecure

Definition Beingfreeoffinancialworriesreferstoyoursubjectiveassessmentof

yourfinancialsituation,includingbeingfreeoffinancialworriesinthe

presentandfutureandhavingasenseofsatisfactionwithyour

financialsituation

Sub-

dimensions

Freedomfromfinancialworry Satisfactionwithfinancial

situation

Survey

questions

Howdoyoufeelaboutyour

currentfinancialsituation?

[adaptedfrom11]

(0)Constantlyworried---(10)Feelcomfortable

Howsatisfiedordissatisfied

areyouwithyourfinancial

situation?[10]

(0)Totallydissatisfied---(10)

Totallysatisfied


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Table6:Influencersoffinancialwellbeing

Roleinframework Surveyitem Responsecategories

Financialself-efficacy

Individual-levelinfluencer

Thefollowingstatementsare

aboutattitudesconcerning

moneyandpersonal

finances.Pleaseindicatehow

stronglyyouagreeor

disagreewitheach:

• Idoagoodjobof

balancingmyspending

andsavings

• IalwaysmakesureI

havemoneysavedup

foremergenciesor

unexpectedexpenses

1.Stronglydisagree

2.Somewhatdisagree

3.Disagree

4.Neitherdisagreenotagree

5.Agree

6.Somewhatagree

7.Stronglyagree

98.Don’tknow

Financialself-efficacy


Thesearesomethingsthat

otherpeoplehavesaidabout

managingmoney.Please

indicatehowwellthey

describeyoupersonally

• Iamveryorganised

whenitcomesto

managingmymoneyday

today

1.Fitsverywell

2.Fitsfairlywell

3.Fitsneitherwellnorbadly

4.Doesnotfitwell

5.Doesnotfitatall

(itemsreversecoded)

Futureplanningfinancial

behaviours


Whichofthefollowinghave

youdoneinlast12months?

1.Followedabudget

2.Savedregularly

3.Paidmorethanthe

minimumrepaymentrequired

bycreditcardcompanyorloan

provider

4.Paidmorethanthe

minimumhomeloan

repayment

5.Madevoluntary

contributionstowardsmy

superannuation

96.Noneofthese

98.Don’tknow


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Table6:continued


Day-to-daymoney

managementbehaviours


Whichofthefollowing

methodshaveyouusedin

thelast6monthstokeep

trackofyourmoney?

1.Ikepttrackofmymoneyin

myhead

2.Ikepttrackofmymoneyby

writingdownnotes

3.Ikeptreceipts

4.Iusedahousehold

budget/spreadsheet

5.Iusedanonlinebudgeting

toolorapp

6.Iusedanapptokeeptrack

ofmyspending

7.Icheckedmybank

statementsfor

unusual/suspiciousentries

8.Icheckedmycreditcard

statementsfor

unusual/suspiciousentries

9.Ilookedatsomeorallofmy

bank/creditcardstatements

butnotinanydetail

96.Noneoftheabove(Ididn’t

keeptrackofmyspending)

97.Other(Pleasespecify…)

98.Don'tknow

Financialbehaviour


Thesearesomethingsthat

otherpeoplehavesaidabout

managingmoney.Please

indicatehowwellthey

describeyoupersonally.

• Itendtobuythingseven

whenIcan’treallyafford

them

1.Fitsverywell

2.Fitsfairlywell

3.Fitsneitherwellnorbadly

4.Doesnotfitwell

5.Doesnotfitatall

6.Don’tknow

Financialknowledge


Howmuchunderstandingdo

youhaveaboutfinancial

servicesandproducts?

1.Idon’tunderstandthemat

all

2.Ihaveabasicunderstanding

3.Ihaveagoodunderstanding

4.Ihaveaverygood

understanding

98.Don’tknow

Financialknowledge


Howconfidentdoyoufeel

aboutusingfinancialservices

andproducts?

1.Ihavenoconfidence

2.Ihavelimitedconfidence

3.Iamreasonablyconfident

4.Iamveryconfident

98.Don’tknow


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Table6:Continued


Financialattitude


Myfinancialsituationwill

lookafteritselfandIdon’t

thinkorworryaboutit

1.Stronglydisagree

2.Somewhatdisagree

3.Disagree

4.Neitherdisagreenotagree

5.Agree

6.Somewhatagree

7.Stronglyagree

98.Don’tknow

Financialattitude


Dealingwithmoney/financial

mattersisstressful?

1.Stronglydisagree

2.Disagree

3.Neitheragreenordisagree

4.Agree

5.Stronglyagree

98.Don’tknow

Accesstofinancialproducts

andservices


Whataccesshaveyouhadto

abankaccountoverthepast

12months?

1.Ihadnoaccesstoabank

accountatall

2.Ihadaccesstoabank

accountonlythrougha

partner,relativeorfriend

3.Ihadmyownbankaccount

98.Don’tknow


andservices


Whichofthefollowingbank

accountsdoyouhaveaccess

to?

1.Everyday

banking/transactionaccount

2.TermDeposit

3.HighInterestOnlineAccount

4.BonusInterestorReward

SaverAccount

5.Someothersavingsaccount

(pleasespecify)

6.Don’tknow

7.Prefernottosay


andservices


Overthepast12months,if

youneededcredit/loans,

whichofthefollowingdid

youuseorwouldyouhave

beenabletoaccess?

1.Ihadnoaccesstoanyform

ofcredit/loans

2.Acashloanfromanon-bank

creditprovider(e.g.onlineor

storefrontlender)

3.Aloanfromapawnbroker

4.Aloanfromfriendsorfamily

5.AloanfromCentrelink

6.Aloan(includingcreditcard)

fromabankorbuildingsociety

7.Communityfinance(e.g.No

interestLoanScheme[NILS],

StepUP)

8.Amortgageoran

investmentloan

98.Don’tknow


15

Table6:Continued



andservices


Doyouneedmore

credit/loansthanyou

currentlyhave?

1.Yes,Ineedalotmore

2.Yes,Ineedalittlemore

3.Icouldusesomemore,but

Icangowithoutit

4.No,Ialreadyhaveallthe

credit/loansIneed

5.No,Idonotwanttouse

anycredit/loans

98.Don’tknow


andservices


Whathasbeenyourlevelof

insuranceoverthepast12

months?

1.Ihadnoformofinsurance

2.Ihadsomeinsurance

3.Ihadbasicinsurance

4.Ihadalotofinsurance

98.Don’tknow


andservices


Doyouneedmoreinsurance

thanyoucurrentlyhave?

1.Yes

2.No

98.Don’tknow


andservices


Whattypeofextrainsurance

doyouneed?

1.Healthinsurance

2.Motor-vehicle-insurance

3.Homebuildinginsurance

4.Homecontentsinsurance

97.Other(pleasespecify)

98.Don’tknow

Education


Whatisthehighestlevelof

educationthatyouhave

alreadycompleted?Ifyou

wereeducatedinacountry

otherthanAustralia,please

choosetheclosestoption

fromthelist.

1.Year9orbelow

2.Year10or11

3.Year12

4.Certificate(levelunknown)

5.CertificateIorII

6.CertificateIIIorIV

7.AdvancedDiplomaor

Diploma

8.Bachelor'sdegreeor

higher

99.Prefernottosay

Employmentstatus


Howmuchpaidworkareyou

currentlydoing?Please

answerconsideringallyour

jobs.

1.35hoursormoreperweek

2.Lessthan35hoursaweek

andhappywithhours

3.Lessthan35hoursaweek

butwantmorehours

4.Notworking,lookingfor

work

5.Notworking,notlooking

forwork

99.Prefernottosay

Contracttype


Areyouemployedona

casualcontract?

1.Yes

2.No


16

99.Prefernottosay

Table6:Continued


Maritalstatus


Whichbestdescribesyour

currentsituation?

1.Single

2.Married

3.Defacto/livingwitha

partner

4.Widowed

5.Divorced

6.Separated

7.Refused

8.Don’tknow

Mentalhealth


Duringthepast30days,

abouthowoftendidyoufeel:

• Nervous

• Hopeless

• Restlessorfidgety

• Sodepressedthat

nothingcouldcheeryou

up

• Thateverythingwasan

effort

• Worthless

1.Allofthetime

2.Mostofthetime

3.Someofthetime

4.Alittleofthetime

5.Noneofthetime

98.Don’tknow

Table6:Continued


Mentalhealth


Pleaseindicatetowhich

extentyouagreeordisagree

withthefollowingstatement:

Myparentsdiscussedwith

mehowtomanagefinancial

matterswhenIwasgrowing

up.

1.Stronglydisagree

2.Disagree

3.Neitheragreenordisagree

4.Agree

5.Stronglyagree

98.Don’tknow

Disabilitystatus


Doyouhaveanylong-term

healthcondition,impairment

ordisabilitythatrestrictsyou

inyoureverydayactivities,

andhaslastedorislikelyto

last,for6monthsormore?

1.Yes

2.No

98.Don’tKnow[9]

Generalhealth


Ingeneral,wouldyousay

yourhealthis:

1.Excellent

2.Verygood

3.Good

4.Fair

5.Poor


17

Table6:Continued


Housingstatus

Household-,family-,peer-

levelinfluencer

Whereareyoucurrently

living?

1.Livinginatemporaryor

insecureaccommodation,

suchasboardinghousesand

caravanparks

2.Homelessorinashelteror

refuge

3.Livinginahousing

commissionproperty,

communityhousingorpublic

housing

4.Livinginaveryshortterm

rental(e.g.noleaseoralease

oflessthan6months)

5.Livinginarentalproperty

withaprivateleaseof6

monthsormore(including

sharingaflatwithothers)

6.Livinginstudent

accommodation

7.Livingathomewithmy

parents

8.Newhomeowner,starting

topayoffamortgage

9.Establishedhomeowner

andIhavepaidoffmorethan

50%ormymortgage


Householddensity


levelinfluencer

Includingyourself,howmany

peopleaged15andoverare

livinginyourhouseholdona

usualnight?

1.One

2.Two

3.Three

4.Four

5.Five

6.Six

7.Seven

8.Eight

9.Nine

10.Tenormore

98.Prefernottosay


18

Table6:Continued.


Householddensity


levelinfluencer

Howmanypeopleaged

under15arelivinginyour

householdonausualnight?

1.One

2.Two

3.Three

4.Four

5.Fiveormore

99.Prefernottosay

Housingcost


levelinfluencer

Howmuchdoyouspendper

weekonrentormortgage

paymentswhereyouare

currentlyliving?

<Insertfreetext>

Socialcapital


levelinfluencer

Overthepast12months,

howwouldyoudescribeyour

levelofcontactwithsocial

connections?Social

connectionsreferto

connectionswithfamily,

friends,workcolleagues,

neighboursorclubs.

1.Iamisolatedoralonemost

ofthetime

2.Ihaveoccasionalcontact

3.Ihaveregularcontactwith

moredistantsocial

connections

4.Ihaveregularcontactwith

closeconnections

98.Don’tknow

Socialcapital


levelinfluencer

Howlikelyareyoutoget

financialsupportfromyour

socialconnections(family,

friends,workcolleagues,

neighboursorclubs)intimes

ofcrisis?

1.Never/Veryunlikely

2.Fairlyunlikely

3.Unsure

4.Fairlylikely

5.Always/VeryLikely

Socialcapital


levelinfluencer

Howmuchsupporthaveyou

hadfromcommunityor

governmentorganisationsto

helpwithyourfinancial

situationoverthepast12

months?

1.Ineededsupport,butIhad

noaccesstoit

2.Ireceiveemergency

supportservices(e.g.food-

banksorvouchers)

3.Ireceivespecialisedsupport

services(e.g.mealsonwheels,

financialcounselling,no

interestloan,homecare

services)

4.Iusedtheirsupport

occasionally,butIwasnot

reliantonthem

5.Ididnotneedany

communityorGovernment

support

98.Don’tknow


19

Table6:Continued


Householdincome

(equivalised)


levelinfluencer

Inordertounderstandhow

differenthouseholdsdeal

withfinancialstresswewould

appreciateanestimateof

youryearlyhousehold

income(beforetaxand

expenses).Pleasechoose

fromtherangesbelow.

1.Under$10,000peryear

(under$385perfortnight)

2.$10,000to$19,999per

year($385to$769per

fortnight)

3.$20,000to$29,999per

year($770to$1,154per

fortnight)

4.$30,000to$39,999per

year($1,155to$1,538per

fortnight)

5.$40,000to$49,999per


fortnight)

6.$50,000to$59,999per


fortnight)

7.$60,000to$69,999per


fortnight)

8.$70,000to$79,999per


fortnight)

9.$80,000to$89,999per


fortnight)

10.$90,000to$99,999per


fortnight)

11.$100,000to$109,999

peryear($3,847to$4,231

perfortnight)

12.$110,000to$119,999


perfortnight)

13.$120,000to$129,999


perfortnight)

14.$130,000to$139,999


perfortnight)

15.$140,000to$149,999


perfortnight)

16.$150,000to$199,999


perfortnight)

17.$200,000to$249,999


perfortnight)


20

18.$250,000ormoreper

year($9,616ormoreper

fortnight)

99.Prefernottosay

Financialdependents


levelinfluencer

Doyouhaveanyfinancial

dependants?Afinancial

dependantisachildunder

theageof15,orchildren15-

24yearswholivewithyou

morethanhalfofthetime,

andforwhomyouprovide

financially,orotherpersons

forwhomyouprovide

financially.

1.Yes

2.No

IFYES:

1.Howmanyunder15

2.Howmany15-24years

3.Howmany25years+

Caregiving


levelinfluencer

Inthelasttwoweeksdidyou

spendtimeprovidingunpaid

care,helporassistanceto

familymembersorothers

becauseofadisability,along

termillnessorproblems

relatedtooldage?

1.Yes

2.No


Lifeevents Foreachstatementbelow,

pleasecrosstheYesboxto

indicateiftheevent

happenedduringthepast12

months.Didanyofthese

happentoyouinthelast12

months?

a.Gotmarried

b.Separatedfromspouseor

long-termpartner

c.Pregnancy/pregnancyof

partner

d.PartnerorIgavebirthto,

oradopted,anewchild

e.Seriouspersonalinjuryor

illnesstoself

f.Deathofspouseorchild

g.Victimofphysicalviolence

(e.g.,assault)

h.Retiredfromtheworkforce

i.Firedormaderedundantby

anemployer

j.Majorimprovementin

financialsituation(e.g.,won

lottery,receivedan

inheritance)

k.Majorworseningin

financialsituation(e.g.,went

bankrupt)

l.Aweather-relateddisaster

(e.g.,flood,bushfire,cyclone)

damagedordestroyedyour

home

m.Noneofthese


21

Table6:Continued


Communitysocioeconomic

status

Remotenessindex

Community-level

Whatisyourpostcode?

4-digitpostcode


Overallfinancialwellbeing–

outcomeoffinancial

wellbeing

Allthingsconsidered,how

satisfiedareyouwithyour

life?Pickanumberbetween

0and10toindicatehow

satisfiedyouare.

1.0(totallydissatisfied)

2.1

3.2

4.3

5.4

6.5

7.6

8.7

9.8

10.9

11.10(totallysatisfied)

98.Don’tknow


22


Abilitytoraisefundsinan

emergency

Potentialmeasureof

financialwellbeingnotused

inthefinalmodel(See

AppendixD)

Inanemergency(e.g.yourcar

breaksdown,yourwashing

machineorfridgestops

working),wouldyoubeable

toget$2,000withinaweekto

dealwithit?

1.Yes

2.No

98.Don’tknow


emergency

Potentialmeasureof


inthefinalmodel(See

AppendixD)

Wherewouldyougetthis

moneyfrom?

1.Familyorfriends

2.Savings

3.Borrowingfromthebank

(e.g.aloanoroverdraft)

4.Usingacreditcard

5.Paydayloan,online

lender,pawnbroker


98.Don’tknow


emergency

Potentialmeasureof


inthefinalmodel(See

AppendixD)

Youhaveindicatedthatyou

couldget$2,000foran

emergencyfromthefollowing

sources.Pleaserankthemin

orderfromthemosttothe

leastamountofmoneyyou

wouldbeabletoget.For

example,ifyoucouldget

mostoftheamountfromyour

savingsandwouldhaveto

borrowtherestfromfamilyor

friends,ranksavingsfirstand

familyorfriendssecond.

1.Familyorfriends

2.Savings

3.Borrowingfromthebank

(e.g.aloanoroverdraft)

4.Usingacreditcard

5.Paydayloan,online

lender,pawnbroker


Financialhopeforthefuture

Potentialmeasureof


inthefinalmodel(See

AppendixD)

Thinkingaboutfouryears

fromnow(2020),whichofthe

followingbestdescribeshow

youthinkyourfinancial

circumstanceswillhave

changedbythen."Iexpectmy

financialcircumstancesto

be..."

1.Muchbetterthantheyare

now

2.Slightlybetterthanthey

arenow

3.Thesameastheyarenow

4.Slightlyworsethanthey

arenow

5.Muchworsethantheyare

now

Controloverfinancialdecisions

Potentialmeasureoffinancial

wellbeing,butwasnot

appropriateduetolow

variance(SeeAppendixD)

Whomakesthedecisionsabout

thefollowingissuesinyour

household:

• Managingday-to-day

spendingandpayingbills

• Managinglarge

householdpurchases

(e.g.carsandmajor

appliances)

• Savings,investmentand

borrowing

1.Alwaysme

2.Usuallyme

3.Sharedequallybetween

partnerandself

4.Usuallymypartner

5.Alwaysmypartner

6.Always/usuallyother

person(s)inhouse(e.g.a

parent)

7.Sharedequallyamong

householdmembers

8.Always/usuallysomeone

notlivinginhouse

9.Doesnotapply


23

APPENDIX D: HOW THE MODEL OF FINANCIAL WELLBEING WAS DEVELOPED This research used three methods for developing a model of financial

wellbeing:Ascopingreview,one-on-oneandgroupinterviews,andasurvey

of Australians aged 18 and over. The scoping review helped to develop an

understandingofwhat financialwellbeing looks like for different groupsof

people and to identify gaps in knowledge. This information, guided the

questionsposedtotheinterviewandfocusgroupparticipants.Theirresponses

helpedustodevelopapreliminarymodeltotestwiththesurveydata.Survey

questionsweredesignedtomeasure theproposedcomponentsof financial

wellbeingallowingustocriticallyexamineandmodifythepreliminarymodel.

Preliminary model

Thequalitativeresearchrevealedthreedimensionsoffinancialwellbeing:1)

Meeting expenses and having somemoney left over; 2) Feeling financially

secure; and 3) Being in control. However, the qualitative data showed

complexity around the being in control dimension. By control, participants

meantfinancialautonomy,thatis,havingasayinfinancialdecisionsthataffect

themandhavingaccesstotheirmoneyandcontroloverhowitisspent,and

financialcontrolor‘beingontopofyourfinances’,encompassedkeepingtrack

offinances,controlledspending,andcontroloverfuturefinances.Forsome,

controlledspendingwasdiscussedasacomponentoffinancialwellbeingbut

forothersitwasseenasaninfluencer.Thelatterismoreconsistentwiththe

literature[e.g.,12],buttheformerresonatedwithmanyoftheparticipants.

Therefore we put forward a preliminary model that saw the behavioural

aspectsofcontrolasacomponentoffinancialwellbeing.However,thiswas

donewiththeunderstandingthatthecontrol-relatedbehaviours(andothers)

mayberemovedfromthemodeliftheywerenotsupportedbyfactoranalysis

ofdata.


24

Thepreliminaryconceptualmodeloffinancialwellbeingwasasdevelopedas

showninTable7:

Table7:Preliminaryconceptualmodeloffinancialwellbeing

Meetingexpensesand

havingchoices

Feelingfinanciallysecure Beingincontrol

• Abilitytocoverexpenses

• Sufficientsavings

• Manageabledebt

• Havingabitleftover

• Freedomfromfinancial

worry

• Satisfactionwithyour

currentandfinancial

situation

• Financialhopeforthe

future

• Controloverfinancesin

general

• Controloverfinancial

decisionmaking;

• Controloverfinancial

behaviours;

• Controloverfuture

finances.

Testing and refining the preliminary model

Althoughthiswasanexploratoryanalysis,weexpectedthreefactorswould

emerge in themodel, as outlined above. However, factor analysis did not

supportthisfactorstructure(seeTable8below).Firstly,theitemsaccessing

controloverfinancialdecision-making(variables12-14inTable8)emergedas

theirownfactor,butwerenotcorrelatedwithanyoftheotheritems.Closer

inspectionofthedatarevealedthatveryfewpeoplereportedlimitedcontrol,

whichsuggestedthevariablehadlimitedexplanatorypower.Further,itisalso

plausiblethatsomepeoplemaynotwantcontrolovertheirfinancialdecision-

making,whichsuggestedthevariablewasnotappropriateinitscurrentform

andwouldneedfurtherdevelopment.Theseitemswerethereforeremoved

fromthefinancialwellbeingmodel.Thefinancialbehaviouritems(11,15-18)

alsoformedtheirownfactor,butawayfromthegeneralfinancialcontrolitem

andtheotherfinancialwellbeing items.Therefore,wedrewontheexisting

literature and reconceptualised the variables as influencers of financial

wellbeing (financial capability) rather than component items. We did,

however,retainoneitemongoalsetting(11)tomaintainconsistencywithour

scopingreviewandqualitativephase,whichsuggestedthatfinancialwellbeing

hadcurrentandfuturedimensions.Householdincome(6)wasremoveddue

tolowfactorloadingand,likethefinancialbehaviours,islikelytofunctionas

an influencer rather than a component of financial wellbeing. Finally, the

variablemeasuringfinancialhopeforthefuture(3)wasalsoremoveddueto

low and multiple factor loading. It is possible this variable was measuring

optimismmorebroadly, rather than financialwellbeing.Variablenumber5

wasalsoremovedduetolowvariance;veryfewpeoplecouldnotraise$2,000

inanemergency.


25

Table8:Rotatedfactorloadingsforpreliminarymodel.

Rotatedfactors

Surveyitems 1 2 3 4

1.Satisfiedwithcurrentfinancialsituation 0.805

2.Feelpositiveaboutcurrentfinancialsituation 0.781

3.InfouryearsIwillbebetteroffthannow 0.414

4.Recentlyboughtsomethingspecial 0.382

5.Abilitytoraisemoneyinanemergency 0.575

6.Equivalisedhouseholdincome 0.336 0.356

7.Whatisyourcurrentlevelofsavings(categorical)? 0.707

8.Inthelast12months,howdifficultwasitforyouto

meetyournecessarycostoflivingexpenses?

0.774

9.Whatisyourcurrentlevelofdebt? 0.667 -

0.336

10.Financialsituationwithinmycontrol 0.61

11.Isetlong-termfinancialgoalsandstrivetoachieve

them

0.449 0.529

12.Imanageday-to-dayspending 0.799

13.Imanagelargehouseholdpurchases 0.904

14. I make decisions about savings, investment and

borrowing

0.897

15.Idoagoodjobofbalancingmyspendingandsavings 0.349 0.697

16. I always make sure I have money saved up for

emergenciesorunexpectedexpenses

0.547 0.585

17.Financialbehaviour(Impulsivity) 0.5

18.Iamveryorganisedwhenitcomestomanagingmy

moneydaytoday

0.358 0.616

Thesemodifications left eight variables in theanalysis that formeda single

factorwelabelled“overallfinancialwellbeing”(Table9).Althoughthiswasan

unexpected finding, it is consistentwithwork inNorwayby Kempson et al

(2017). The assumptions of factor analysis for this model were met - the

Bartlett testofSphericity showedap-valueof<.001and theKaiser-Meyer-

OlkinMeasureofSamplingAdequacystatisticwas.881(high)1.Theitemthat

assessed when the participants had last bought something special for

themselvesdidhavearelativelylowfactorloading.However,weretaineditin

themodelbecauseitreflectsanimportantfindingfromthequalitativephase.

The extracted factor only explained 46% of the variance in the data. This

suggested that significant information would be lost by combining the

variables together despite them forming a single factor. Therefore, when

1ForanexplanationseeWilliams,B.,Onsman,A.,&Brown,T.(2010).Exploratoryfactoranalysis:Afive-stepguide

fornovices.AustralasianJournalofParamedicine,8(3).


26

examining the influencers of financial wellbeing, we considered the three

dimensions that came from the qualitative research and a single overall

measureoffinancialwellbeing.

Table9:Factorloadingsforfinalmodel

Surveyitems Factor

loadings

1.Satisfiedwithcurrentfinancialsituation 0.846

2.Feelpositiveaboutcurrentfinancialsituation 0.842

3.Financialsituationwithinmycontrol 0.615

4.Isetlong-termfinancialgoalsandstrivetoachievethem 0.526

5.Recentlyboughtsomethingspecial 0.357

6.Whatisyourcurrentlevelofsavings? 0.679

7. In the last12months,howdifficultwas it for you tomeet your

necessarycostoflivingexpenses?

0.786

8.Whatisyourcurrentlevelofdebt?Chooseoneonly. 0.639

Scoring for the final model

Weusedarelativelysimplemethodforscoringfinancialwellbeingsothatit

couldbeeasilyreplicatedandbuiltuponinfutureresearch.Firstly,response

dataforalleightitemswerescaledtohavearangeof1–4,withhigherscores

representinghigherlevelsoftheconstruct.Wethenproducedascoreforeach

dimensionbycalculatingthemeanofeachdimension’srespectiveitems:

• Variables1and2inTable9reflectthedimension“Feelingfinancially

secure”

• Variables3and4reflectthedimension“Beingincontrol”

• Variables5–8reflectthedimension“Comfortablymeetingexpenses

andhavingchoices”.

The mean of the three scores was averaged to form an overall financial

wellbeing score. This method applied no weighting to particular items or

dimensions.Insum,thefollowingvariableswerecalculated:

• Ascorefor“Feelingfinanciallysecure”(1-4scale)

• Ascorefor“Beingincontrol”(1-4scale)

• Ascorefor“Comfortablymeetingexpenses”(1-4scale)

• Anoverallfinancialwellbeingscore(anaverageofthethreescores,1-

4scale)


27

APPENDIX E: DESCRIPTIVE STATISTICS Table10:Descriptivestatisticsforcontinuousvariables

Variable Range Mean(N=821)

StandardDeviation

Overallfinancialwellbeing 1-4 2.81 0.61

Feelingfinanciallysecure 1-4 2.70 0.71

Beingincontrol 1-4 2.92 0.68

Meetingexpensesandhavingsomemoneyleftover 1-4 2.79 0.71

Financialknowledge 1-4 2.60 0.70

Financialself-efficacy2 0-6 4.41 1.27

Financialbehaviour(Impulsivity) 1-5 4.11 1.00

Sumoffinancialbehaviours 0-5 2.08 1.24

Financialattitude(doesn'tcareaboutmoney) 1-7 3.11 1.57

Financialattitude(moneyisstressful) 1-5 2.59 0.96

Accesstofinancialproductsandservices 1-4 3.26 0.51

Mentalhealth3 1-25 6.04 4.75

Generalhealth 1-5 3.24 0.96

Cumulatednumberoffinancialshocks 0-5 0.25 0.44

Numberofchildren 0-3 0.63 1.01

Numberoffinancialdependents 0-6 0.67 1.11

Mortgage/rentpayments($) 0-$4,000 289.99 393.27

Socialcapital 1-4 3.21 0.62

Equivalisedhouseholdincomequartiles 1-4 2.50 1.13

Communitysocioeconomicdisadvantage 1-10 6.56 2.70

2Financialself-efficacyreferstopeople’sself-ratedabilitytomanagetheirfinances.Thisrepresentstheirself-rated

abilitytomanagetheirday-to-dayspending,balancesavingswithspendingandtohavemoneysetasideifneeded.It

istheaveragescoreofthethreevariablespresentedinTable6,page13

3Higherscoresreflectpoorermentalhealth


28

Table11:Descriptivestatisticsforcategoricalvariables

Categories N %Age 18-19 15 1.8%

20-24 61 7.4%

25-29 58 7.1%

30-34 106 12.9%

35-39 61 7.4%

40-44 78 9.5%

45-49 77 9.4%

50-54 43 5.2%

55-59 70 8.5%

60-64 88 10.7%

65-69 78 9.5%

70+ 86 10.5%

Total 821 100.0%

Maritalstatus Marriedordefacto 525 64.3%

Single 291 35.7%

Total 816 100.0%

Highestlevelof

Education(orequivalent)

Year9orbelow 21 2.6%

Year10or11 80 9.8%

Year12 77 9.4%

Certificate(levelunknown) 15 1.8%

CertificateIorII 13 1.6%

CertificateIIIorIV 97 11.9%

AdvancedDiplomaorDiploma 138 16.9%

Bachelordegreeorhigher 377 46.1%

Total 818 100.0%

Disability Nodisabilityorlongtermhealthcondition 592 74.4%

Hasadisabilityorlongtermhealthcondition 204 25.6%

Total 796 100.0%

Homeowner NotHomeOwner 271 33.3%

HomeOwner(includingwithmortgage) 544 66.7%

Total 815 100.0%


29

APPENDIX F: BIVARIATE CORRELATIONS Table12:Correlationsbetweenstudyvariables

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24.1.Overallfinancialwellbeing 1 2.Feelingfinanciallysecure .89 1 3.Beingincontrol .82 .60 1 4.Meetingexpenses .87 .71 .56 1 5.Financialknowledge .36 .29 .41 .25 1 6.Financialself-efficacy4 .65 .56 .62 .52 .32 1 7.FinancialImpulsivity .26 .27 .22 .21 .12 .43 1 8.Sumoffinancialbehaviours .33 .27 .38 .23 .22 .31 .14 1 9.Doesn’tcareaboutmoney .28 .35 .12 .26 .07 .16 .02 -.10 1 10.Moneyisnotstressful .46 .45 .35 .39 .40 .34 .20 .14 .16 1 11.Financialinclusion .38 .35 .34 .31 .28 .27 .08 .44 .05 .20 1 12.Age .15 .19 .04 .18 .08 .18 .23 -.07 .07 .12 .05 1 13.Maritalstatus(nopartner) -.14 -.18 -.10 -.10 -.12 -.06 -.04 -.23 -.09 -.05 -.18 -.17 1 14.Education .06 .04 .05 .08 .08 .05 .00 .16 -.07 .01 .16 -.19 -.06 1 15.Disability(yes) -.17 -.16 -.19 -.11 -.09 -.06 .02 -.12 -.08 -.11 -.09 .27 .08 -.11 1 16.Mentalhealth(poor) -.55 -.54 -.43 -.47 -.28 -.38 -.17 -.19 -.20 -.43 -.27 -.26 .23 .00 0.20 1 17.Generalhealth .31 .27 .32 .24 .18 .22 .07 .24 .05 .18 .16 -.20 -.09 .15 -.49 -.33 1 18.Cum.financialshocks -.18 -.20 -.11 -.18 -.09 -.09 .03 -.05 -.09 -.08 -.14 -.08 .03 -.01 .12 .15 -.11 1 19.Numberofchildren -.11 -.09 -.04 -.16 .00 -.08 -.04 .16 -.09 -.11 .08 -.22 -.29 .13 -.11 .04 .05 .00 1 20.Num.financialdependents -.08 -.07 -.03 -.11 -.01 -.09 -.08 .11 -.04 -.08 .00 -.36 -.28 .08 -.17 .03 .12 .00 .65 1 21.Rent/mortgagepayment -.13 -.11 -.02 -.21 .03 -.11 -.10 .15 -.09 -.07 .07 -.27 -.15 .17 -.18 .02 .08 .01 .34 .23 1 22.Socialcapital .40 .34 .34 .38 .16 .22 .03 .20 .08 .23 .27 -.01 -.05 .09 -.24 -.39 .26 -.17 -.05 .00 -.01 1 23.Homeowner .27 .30 .20 .21 .15 .22 .16 .27 .08 .10 .33 .46 -.41 .02 .01 -.26 .02 -.07 .13 -.06 .04 .08 1 24.Equivalisedh.holdincome .31 .28 .27 .27 .19 .11 -.01 .37 -.01 .08 .40 -.15 -.16 .34 -.18 -.16 .13 -.09 .08 -.03 .21 .28 .20 125.CommunitySES(SEIFA) .11 .09 .09 .12 .08 .03 .02 .07 .03 .05 .05 .03 .01 .14 -.04 -.04 .04 -.07 -.01 .00 .09 .12 .02 .18

Note:Correlationsgreaterthan0.07aresignificantatP<0.05andcorrelationsgreaterthan0.1aresignificantatP<0.01.

Correlationsrangefrom-1(anegativerelationship)to1(apositiverelationship)andindicatethestrengthofanassociation.Thehighertheabsolutevalue,thestrongertherelationship.Cohen’s‘ruleofthumb’suggeststhatcorrelationsof0.1(or-0.1)canbeinterpretedassmallorweak,correlationsof0.3asmoderateandcorrelationsof0.5ofhigherasstrong[13].

4Financialself-efficacyreferstopeople’sself-ratedabilitytomanagetheirfinances.Thisrepresentstheirself-ratedabilitytomanagetheirday-to-dayspending,balancesavingswithspendingandtohavemoneysetasideifneeded.ItistheaveragescoreofthethreevariablespresentedinTable6,page13.


30

APPENDIX G: REGRESSION ANALYSIS Appendix G describes the regressionmodelling techniques used to identify

potential.

Linearregressionmodelswereperformedfortheoverall financialwellbeing

measure and the threedimensions (seeAppendixD for details). Covariates

(the “influencers”or independent variables)wereenteredusinga stepwise

approach in two blocks (financial capability items, then

individual/household/communityitems)andeachblockwascomparedusing

changeinR2todeterminewhethertheadditionalblocksignificantlyimproved

thefitofthemodel.Individualcovariateswereforced(i.e.notautomatically

excluded based on fit) as all independent variableswere specified prior to

entry.Recordswithmissingitemswereexcludedusinglistwisedeletion(i.e.

theentirerecordwasexcludedfromtheanalysis).

Allassumptionsforlinearregressionwerecheckedandeachmodelmetthe

assumptionsof linearresidualsandheteroscedasticity.Multicollinearitywas

checked using variance inflation factors (VIF) and although age, number of

children and number of financial dependents had higher scores than other

items,allwereunder4whichisgenerallyacceptedasacut-offforproblematic

multicollinearity. Some multivariate outliers were identified. However,

excludingthesefromtheregressionmodeldidnotsubstantivelychangethe

magnitude of the relationships (changes were largely at the third decimal

place).Therefore,intheinterestsofmaintainingsamplesize,thesecaseswere

retained.

Intheinterestofmodelparsimony,asmallnumberofvariableswereremoved

betweeninitialandfinalmodelswhentheywereconsistentlynotassociated

with significant changes in the coefficients. Note that some items were

retaineddespitenosignificantassociationduetobeingofprimaryresearch

interest(e.g.gender).

Toreducetherisksassociatedwithinflatedalpha,onlyrelationshipsthatwere

significantatp<.001informedthereport.

In the tables below, beta (b) represents the standardised regressioncoefficients.Althoughinferencesofcauseandeffectcannotbemade,these

can be cautiously interpreted as the potential ‘impact’ (the slope of the

regressionline)ofeachinfluenceronfinancialwellbeingaftercontrollingfor

the effects of the other influencers in the model. Beta is expressed in

standardised terms. This means you can compare the beta values across

influencersand identifywhichhavethestrongestrelationshipwithfinancial

wellbeing (controlling for all other influencers). The ‘b’ represents the

unstandardized regressioncoefficient is in interpreted ina similarway tob


31

exceptthatitisexpressedusingtheoriginalscaleofthevariables.Thismakes

itmoredifficult to interpretwhichvariableshavethestrongest relationship

with the dimensions of financial wellbeing. The standard error (SE) is a

measureoftheaccuracyoftheunstandardisedregressioncoefficient.

Table13:Overallfinancialwellbeingregressedonthestudyvariables

Model1:Financialcapability Model 2: Financial capabilityandotherinfluencers

B SE b B SE bVariables

Financialknowledge 0.063 0.024 0.073** 0.024 0.021 0.028

FinancialSelf-efficacy 0.247 0.015 0.514*** 0.203 0.013 0.421***

Financialbehaviour(Impulsivity) -0.029 0.016 -0.047 -0.01 0.015 -0.016

Sumoffinancialbehaviours 0.078 0.013 0.159*** 0.024 0.013 0.049

Doesnotcareaboutmoney 0.061 0.01 0.157*** 0.041 0.009 0.106***

Moneyisnotstressful 0.138 0.017 0.222*** 0.078 0.016 0.125***

Age -0.003 0.006 -0.014

Maritalstatus -0.04 0.033 -0.031

Education -0.004 0.006 -0.015

Disability 0.004 0.036 0.003

Mentalhealth(poorer) -0.025 0.004 -0.19***

Generalhealth 0.04 0.017 0.064*

Cumulatedfinancialshocks -0.069 0.03 -0.049*

Accesstofinancialproductsandservices 0.086 0.031 0.072**

Numberofchildren -0.045 0.018 -0.076*

Numberoffinancialdependents 0.016 0.015 0.034

Housingcost 0.00 0.00 -0.097***

Socialcapital 0.087 0.024 0.088***

Equivalisedhouseholdincome 0.083 0.014 0.153***

Homeowner 0.044 0.037 0.034

Communitysocioeconomicdisadvantage 0.009 0.005 0.042

AdjustedR2 0.56 0.67

PforchangeinadjustedR2 P<.001

*p<.05.**p<.01.***p<.001


32

Table14:Feelingfinanciallysecureregressedonthestudyvariables

Model 1: Financialcapability

Model2:Financialcapabilityandotherinfluencers


Financialknowledge 0.015 0.031 0.015 -0.037 0.028 -0.036


Financialbehaviour(Impulsivity) 0.003 0.021 0.004 0.018 0.019 0.025

Sumoffinancialbehaviours 0.074 0.016 0.13*** 0.006 0.017 0.011

Financialattitude(doesn'tcareaboutmoney) 0.103 0.013 0.228*** 0.078 0.011 0.173***

Financialattitude(moneyisnotstressful) 0.191 0.022 0.262*** 0.124 0.021 0.171***

Age 0.005 0.008 0.025

Maritalstatus -0.068 0.043 -0.046

Education -0.003 0.008 -0.009

Disability 0.015 0.046 0.009


Generalhealth 0.038 0.022 0.051

Cumulatedfinancialshocks -0.121 0.04 -0.074**

Accesstofinancialproductsandservices 0.099 0.04 0.072*

Numberofchildren -0.039 0.024 -0.057


Housingcost 0 0 -0.072**

Socialcapital 0.062 0.032 0.054*


Homeowner 0.092 0.048 0.06


AdjustedR2 .47 .59

PforchangeinAdjustedR2 P<.001

*p<.05.**p<.01.***p<.001


33

Table15:Beingincontrolregressedonthestudyvariables



Financialknowledge 0.161 0.029 0.166*** 0.137 0.029 0.141***


Financialbehaviour(Impulsivity) -0.06 0.02 -0.088** -0.037 0.02 -0.054

Sumoffinancialbehaviours 0.105 0.016 0.191*** 0.061 0.017 0.111***

Financialattitude(doesn'tcareaboutmoney) 0.012 0.012 0.028 -0.002 0.012 -0.005

Financialattitude(moneyisnotstressful) 0.063 0.021 0.09 0.02 0.022 0.028

Age -0.019 0.008 -0.09*

Maritalstatus 0.013 0.044 0.009

Education -0.021 0.008 -0.07*

Disability -0.063 0.048 -0.041



Cumulatedfinancialshocks -0.007 0.041 -0.004

Accesstofinancialproductsandservices 0.072 0.042 0.054

Numberofchildren -0.021 0.024 -0.032

Numberoffinancialdependents -0.002 0.02 -0.003

Housingcost -0.000 0.00 -0.017

Socialcapital 0.069 0.033 0.062*

Equivalisedhouseholdincome 0.038 0.02 0.062

Homeowner 0.062 0.05 0.043


AdjustedR2 .48 .52


*p<.05.**p<.01.***p<.001


34

Table16:Meetingexpensesregressedonthestudyvariables



Financialknowledge 0.013 0.033 0.013 -0.026 0.03 -0.026


Financialbehaviour(Impulsivity) -0.029 0.023 -0.042 -0.01 0.021 -0.015

Sumoffinancialbehaviours 0.054 0.018 0.095** 0.005 0.018 0.01

Financialattitude(doesn'tcareaboutmoney) 0.067 0.014 0.15*** 0.047 0.012 0.104***

Financialattitude(moneyisnotstressful) 0.161 0.024 0.223*** 0.089 0.023 0.124***

Age 0.006 0.008 0.025

Maritalstatus -0.063 0.047 -0.043

Education 0.012 0.009 0.039

Disability 0.059 0.051 0.037



Cumulatedfinancialshocks -0.078 0.043 -0.048

Accesstofinancialproductsandservices 0.086 0.044 0.062

Numberofchildren -0.074 0.026 -0.108**


Housingcost 0.00 0.00 -0.163***

Socialcapital 0.129 0.034 0.113***


Homeowner -0.02 0.053 -0.013


AdjustedR2 0.37 0.51


*p<.05.**p<.01.***p<.001


35

APPENDIX H: TOWARDS A MEASUREMENT SYSTEM FOR FINANCIAL WELLBEING Thefirststepindevelopinganymeasurementsystemistodefinetheconstruct

understudy,orinthisinstance,theoutcomesandsub-outcomes.Ourprimary

goalwas todefineandconceptualise financialwellbeing.Thiswasachieved

throughascopingreviewandqualitativeresearchtoidentifythedimensions

(outcomes) and sub-dimensions (sub-outcomes). Existing validated

assessment tools were then selected to measure the sub-outcomes. This

effectivelystartedthe journeyfordevelopingameasurementsysteminthe

Australian context. Here we describe two key principles that guided the

selectionofmeasuresandconsidersomeoftheirstrengthsandlimitations.

Objectivity and subjectivity

Ourmeasuresof financialwellbeingweresubjective innature,whichwasa

necessity given our use of an online self-reported survey. Some of these

subjectivemeasureswereusedasproxiestocaptureobjectivedimensionsof

financialwellbeing.Forinstance,participantswereaskedtheirlevelofsavings

comparedtotheir income,theextenttheywereabletomanagetheirdebt,

andtheextenttheycouldmeettheirlivingexpenses.Thesequestionscould

alsobemeasuredobjectivelyifthedata(e.g.bankingrecords)wereavailable.

Ofcourse,thisisnoteasilyachievedwithaself-reportsurveyandevenasking

fordollarvalueshasshowntobeunsuccessfulasdemonstratedbyashiftto

use of income bands rather than actual dollar values. Firstly, people are

inaccurate at reporting their income, assets and liabilities [14, 15], which

affectsthevalidityofthesemeasures.Second,itcanresultinhigherratesof

missingdata,whichdepletestheavailablesamplesizeforanalysis.However,

thecollectionofobjectivedatamaybepreferredinsomeinstances.Inone-on-

onesituations, financialcounsellorsare likelytobeabletocollectobjective

financial data. Likewise, some financial institutions are nowdeveloping the

capacitytoanalyseobjectivecustomerdataalongsidesubjectivemeasuresof

financialsatisfactionandperceivedcontroloverfinances.

Thereare two implicationshere.Firstly,our resultsdescribing thepotential

influencersoffinancialwellbeingshouldbeinterpretedwithsomecaution,as

withanycross-sectionalself-reportedsurvey.Second,thedevelopmentofa

financial wellbeing measurement system should be flexible enough to

incorporate subjective measures, objective measures or a combination of

both,dependingonthecontextthedataiscollectedin.


36

Time dimension – now versus the future

Theliteratureandourqualitativeresearchhighlightedtheimportanceofthe

time dimension in measuring financial wellbeing. This was achieved both

directlyandindirectly.Forinstance,thebeingincontroldimensionassessed

controlnowandinthefuture(e.g.bysettinggoalsforthefuture).Thefeeling

financially secure dimension assessed satisfaction with and worries over

currentfinancialcircumstances.Thecomfortablymeetingexpensesdimension

drawsonCSI’sfinancialresilienceresearch(Muiretal,2016).Itasksquestions

aboutcurrentfinancialcircumstanceswithone’sfutureresilienceinmind.

However, the measure could have been strengthened with additional

questionsassessingthebeingincontroldimension.AsnotedinAppendixA,

oneoftheoriginalsurveyitemsassessedhowmuchcontrolparticipantshad

over financialdecision-making in thehousehold.However,due to thesmall

numberofpeoplereportinglimitedcontrol(andthelackofassociationofthis

measurewiththeotherdimensionsoffinancialwellbeing),themeasurewas

notputforwardinthefinalmodel.Futureresearchneedstodrawonmeasures

thatexhibitmorevarianceandaccountforthefactthatnotallpeoplewantto

beincontroloftheirfinances.

Future directions

Thereareseveralstepsneededtofullydevelopameasurementsystemthat

falloutsidethescopeoftheresearch.Thesestepsareoutlinedbelow.

Are we measuring the same thing over time?

Test-retestreliabilityisanassessmentofameasure’sconsistencyoverashort

periodoftime.Itisusuallyundertakenbyadministeringthesurveyattwotime

intervals(ormore)andtheresultscorrelatedtotestwhetherthesameresults

areproduced.Suchinformationcanprovideinformationon,forexample,the

extentthatmoodstatemaybe influencingtheresults.Generatingthisdata

wouldbeparticularly importantfordevelopingthefeelingfinanciallysecure

dimensionas itassesseshowpeopleperceiveasituation,andthiscouldbe

potentially biased by the mood they are in at the time. Therefore, it is

recommended that future development of the financialwellbeingmeasure

includesatestre-testreliabilityassessment.

Are we measuring what we think we are measuring?

There are numerous methods for assessing the validity of a measure. For

example,criterionvalidityinvolvesbeingabletopredictsomekindoffuture

externalandobjectiveevent,usingmeasurementscores[16].Establishingan

objective and external criterion for financial wellbeing is challenging, but


37

would provide valuable evidence on the validity of themeasure. Potential

criteriacouldinclude:

• Usingameasureoffinancialwellbeingtopredictthefutureuseof

financialadviceservices

Thisassumesthatpeoplewhoscorehighon,forexample,thebeingcontrol

dimensionwouldbemorelikelytousefinancialadviceservicesinthefuture

thanpeoplewhoscoredlowonexercisingcontrol

• PredictionoffuturerelianceonsuperannuationversustheAge

Pensioninretirement.

Thisassumesthatpeoplewhoexercisecontrolandcomfortablyhaveenough

throughoutworkinglifewillbemorelikelytobeself-sufficientinretirement,

aftercontrollingforincomeandotherfactors

• Predictingoverallwellbeing

Itiswellknownthatoverallwellbeinghasmanydimensionssuchhealthand

socialparticipationaswellasfinancialwellbeing.Demonstratingthatfinancial

wellbeingplaysa role in shaping futurewellbeing ingeneralwouldprovide

supportforthevalidityofthemeasureandforunderstandingwhatrepresents

“good”financialwellbeing.

What is good financial wellbeing?

Althoughourmeasureof financialwellbeingcomprisedvalidatedmeasures,

they do not specifically tell us what represents good or poor financial

wellbeing.Oneway this couldbe achieved is through longitudinal research

comparing how financial wellbeing scores predict other outcomes such as

overall wellbeing. This information would help establish, for example, a

thresholdoffinancialwellbeingwherefutureprobablementalillnesscanbe

avoided.

Another important step is benchmarking indicators of financial wellbeing

againstthepopulation.Forinstance,ourfinancialsatisfactionmeasureisused

intheHouseholdIncomeandLabourDynamicsAustraliasurveyandthreeof

thefour“havingenough”itemshavenationaldatabehindthem.Beingableto

benchmark a target group against the population and understanding what

representsgoodfinancialwellbeingcanhelpintheestablishmentoftargets

andbenchmarksforwhatrepresentsgoodfinancialwellbeing.


38

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3. Malone, K., et al., Perceptions of financial well-being among American women indiversefamilies.JournalofFamilyandEconomicIssues,2010.31(1):p.63-81.

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Exploring Financial Wellbeing in the Australian ... - CSI · The Project Steering Group was a panel of policy and academic experts in the field of financial wellbeing, financial literacy