Financial well-being for a sustainable society: a road less travelled

Abstract

PurposeMeasurement of financial well-being has remained a challenge for the governments for a long time. This paper responds to this challenge by taking an integrative approach, whereby the previous conceptualizations of financial well-being are examined. Further, we propose a new conceptualization of financial well-being using the parameters of objective and subjective well-being.Design/methodology/approachWe conduct a widespread review of the literature with regard to the linkage between financial literacy and financial capability.FindingsNumerous studies report the pertinent role of behavioural economics in rational decision making. This paper understands the role of behavioural economics in regard to financial well-being.Research limitations/implicationsEmpirical investigation in measuring the linkage between financial literacy and financial capability needs to be developed to achieve the goal of financial well-being.Originality/valueThis paper makes a noble contribution to the literature by proposing a new conceptualization of financial well-being spread over financial literacy, financial capability and psychological factors.