Need depriving effects of financial insecurity: Implications for well-being and financial behaviors

Weinstein, Netta ORCID: https://orcid.org/0000-0003-2200-6617 and Stone, Dan N. 2018. Need depriving effects of financial insecurity: Implications for well-being and financial behaviors. Journal of Experimental Psychology: General 147 (10) , pp. 1503-1520. 10.1037/xge0000436

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Abstract

Evidence suggests that experiencing financial insecurity lowers well-being and increases problematic financial behaviors. The present article employs a self-determination theory (SDT; R. M. Ryan & Deci, 2000a) perspective to understand the mechanisms by which experiencing financial insecurity contributes to these detrimental outcomes. Informed by SDT, we expected that the basic psychological needs for autonomy, competence, and relatedness would drive these effects. Studies were concerned with individuals’ general experiences of financial insecurity (using community samples; Studies 1 and 2), and employed manipulations involving self-reflection (Study 3) and hypothetical scenarios (Study 4). Findings demonstrated that financially insecure conditions undermined basic psychological needs and lowered well-being (measured in terms of self-esteem, depression, and anxiety). In addition, lower satisfaction of basic psychological needs linked financial insecurity to a greater likelihood of engaging in financial cheating (Studies 2 and 3) and risky financial decisions (Study 4). Importantly, this pattern of effects remained in evidence across socioeconomically diverse samples and income levels. We discuss implications for future interventions to improve the wellness of individuals in financially insecure circumstances.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Psychology
Publisher:	American Psychological Association
ISSN:	0096-3445
Date of First Compliant Deposit:	12 March 2018
Date of Acceptance:	5 March 2018
Last Modified:	05 Dec 2024 11:00
URI:	https://orca.cardiff.ac.uk/id/eprint/109811

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