FINANCIAL IMPACT ON THE EUDAIMONIC PSYCHOLOGICAL WELL-BEING

Author: Jaša Selinšek Robič

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Date of publication: 17/1/2022

In a general belief that money is relatively irrelevant in creating happiness, many people

continue to direct their behaviour toward increasing income and wealth. Therefore, the article talks about my final thesis which was focused on research examining the Eudaimonic model of well-being in relation to money.

Psychological well-being is a central construct of positive psychology, encompassing a

state of happiness and satisfaction, with low levels of distress and overall good physical and mental health and prospects for a good quality of life (APA, 2021). In general, there are two models of psychological well-being. These include the hedonic model, which focuses on subjective emotional well-being, and the eudaimonic model, which emphasises psychological well-being. The latter has also been extensively addressed by Carol Ryff (2014), whose research has identified six essential characteristics or dimensions of eudaimonic well-being. These are self-acceptance, positive relationships with others, autonomy, environmental mastery, meaning in life and personal growth (C. Ryff&Singer, 2006).

Seifert (2005), following Carol Ryff's model, described all six dimensions of eudaimonic well-being. The model describes self-acceptance as a reflection of one's attitude towards oneself. Environmental mastery is related to an individual who manages the environment effectively, exploits opportunities and has a sense of mastery in managing environmental factors and activities, including managing day-to-day affairs and creating win-win situations. Positive relationships with others are manifested as an individual's involvement in meaningful relationships with others that involve mutual empathy, intimacy and affection. An individual grows personally if he or she continues to evolve, is oriented towards new experiences and recognises improvements in behaviour and self over time. Purpose in life focuses on a firm sense of purpose and the individual belief that life has meaning. Autonomy is manifested as the autonomy of the individual to regulate his or her behaviour independently of social pressures.

Swift (2007) notes that people generally believe that meaning in life and happiness are essential elements of a good life, while money is relatively unimportant. Despite the common belief that money is relatively unimportant in creating happiness, many people continue to focus their behaviour on increasing their income and wealth. This idea presents itself in the classic conflict between the folk wisdom that money cannot buy happiness, on the one hand, and the constant focus of many on achieving material success, on the other.

While an abundance of research focuses on the hedonic model of psychological well-being in relation to money, there is a rarity of research that has established a link between the eudaimonic model and money, despite money, being an important means to achieve higher standards of living (N. Parker & Ivtzan, 2019). Ryan & Deci (2001) however, argue that while the hedonic view would have little reason to view money as a non-problematic goal, the eudaimonic view questions money and wealth as life goals.

Therefore, the aim of the review was to find research that examines the eudaimonic model of well-being in relation to money and to determine whether an individual's finances have any impact on their eudaimonic psychological health or well-being.

Flow diagram of the PRISMA literature search and collection process (Moher et al. , 2009)

The results of the studies show that autonomy is the most important characteristic of individuals with a fixed income, while materialism and individual wealth are associated with lower individual autonomy. Individuals are better able to cope with the environment if they have a higher income and socio-economic status. Wealth, a higher socioeconomic status, and a stable income are the conditions for personal growth, self-acceptance, easier and more intimate and positive contacts with others, as well as the ability to find meaning or purpose in life and to set and achieve goals.

The review found that there is a paucity of research focusing on this topic. It was found that an individual's finances has an impact on their eudaimonic psychological health or well-being across all characteristics. Unexpected inflows also have a lasting positive impact on psychological well-being.

At the same time, the PWB scale (Ryff & Keyes, 1995) is the only instrument that has been used in studies as a method to determine eudaimonic well-being.

SUGGESTIONS FOR ALL THE RESEARCHERS

1. If researchers had used an experimental study, in the way Pătras et al. (2019), it would be interesting to compare the impact of real money to proxy money.

2. The area of environmental governance and the impact of finance on this construct could also be better explored. It would be interesting to find out if a person's financial situation is also reflected in other psychological constructs, such as tolerance, greed and jealousy.

3. However, I would urge all those interested in psychological well-being to undertake research on the topic and its possible impact, as there are few studies on the subject to date.

THE SUM UP

The aim of the review of previous research on the impact of finances on eudaimonic well-being was to identify the impact of money on individual autonomy, environmental stewardship, personal growth, life purpose, self-acceptance and positive relationships. Based on the literature, it was found that research in this area is scarce. There is also a lack of diversity in the instrumentation used. However, many people are not yet familiar with this area, so the research topic can be classified as unexplored and promising for research, as it opens up the possibility of new findings and possible changes in practices. In this thesis, it was found that an individual's finances have an impact on their eudaimonic psychological health or well-being across all characteristics. Unexpected inflows also have a lasting positive impact on psychological well-being. The research results showed that an individual's finances have an impact on one’s eudaimonic psychological health or well-being on all characteristics (autonomy, environmental mastery, personal growth, purpose of life, self-acceptance and positive relations).

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