Conceptualizing Financial Wellbeing: An Ecological Life-Course Approach

Around the world, the financial landscape is becoming increasingly complex. In response to this, an array of initiatives seeks to address financial participation, education, and inclusion for the broad as well as the vulnerable population. There is an increased expectation that these programs will improve the financial wellbeing of individuals and households. But financial wellbeing is inadequately conceptualized and inconsistently defined, making it difficult to understand and improve financial outcomes. Existing conceptualizations, do not adequately account for the dynamic interplay between a person’s environment and their financial wellbeing as well as how aspects of financial wellbeing can interact according to age and life stages. This paper aims to address this gap by redefining and re-conceptualizing financial wellbeing and understanding its components and the relationships between them. To do so, nine focus groups with 54 people living in Australia of different ages, genders, and socio-economic statuses; and 18 one-on-one interviews with people experiencing challenges to their financial wellbeing, are conducted. Using an ecological life-course approach, this paper proposes a definition of financial wellbeing and puts forward a conceptual model allowing us to better understand how financial wellbeing may change over time, and how it is achieved, maintained, or challenged. Policy makers, regulators and organizations may use this model to consider where they might focus their efforts.