General Article Financial wellbeing – can we spot the signs of money worries?

Topic Selected: Money and Finance Book Volume: 391

What does it mean to be ‘financially well’? Is it having a large bank balance and not getting into debt? Or is it not about how much money you have but rather how comfortable you feel? The answer is not straightforward and, to a large extent, will depend on who you ask. But research in this field has huge potential and poses new challenges for firms and regulators.

By Jeroen Nieboer and Karthik Raghavan

A feeling of financial wellbeing – feeling comfortable or free from worry – is obviously a subjective feeling. But how well does it map onto objective facts about people’s financial circumstances and behaviour? Is it as simple as having more money that will bring a feeling of financial wellbeing? Or are there other factors at work and other signs that might indicate a distressed consumer?

We wanted to know whether people’s everyday financial behaviour (payments, transfers in and out of their account, mobile banking logins, credit use, and so forth) could help us predict how financial...

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