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The Impact of Finance on the Eudaimonic Psychological Well-Being

Updated: Nov 20, 2023

It’s a general belief that money is relatively irrelevant in creating happiness. Still, people continue to direct their behaviour toward increasing income and wealth. Therefore, this article examines the Eudaimonic model of well-being in relation to money.

Psychological well-being

Psychological well-being is a central construct of positive psychology. It encompasses a state of happiness and satisfaction. In general, there are two models of psychological well-being. The hedonic model focuses on subjective emotional well-being. Meanwhile, the eudaimonic model emphasizes psychological well-being.


Dimensions of eudaimonic well-being

Carol Ryff identifies six dimensions of eudaimonic well-being. Seifer further defines these dimensions. Firstly, self-acceptance is the reflection of one’s attitude towards oneself. Secondly, environmental mastery relates to effective management of the environment. Also, positive relationships with others involve mutual empathy, intimacy, and affection. Fourthly, personal growth occurs when someone orients towards new experiences and recognizes improvement. Additionally, purpose in life focuses on a sense of purpose and individual belief. Finally, autonomy is the regulation of their behavior.

Classic conflict

Swift notes that people generally believe that meaning in life and happiness are essential elements of a good life. On the contrary, money is relatively unimportant. Despite this belief, many people still work to increase their income and wealth. This idea presents the classic conflict. Folk wisdom finds that money cannot buy happiness. On the other hand, there is a constant focus on achieving material success.

The eudaimonic model and money

There is a lot of research on the relationship between psychological well-being and money. However, there is little research on the link between the eudaimonic model and money. This is despite money helping achieve higher standards of living. But, Ryan and Deci argue that the eudaimonic view questions money and wealth as life goals.

flow diagram PRISMA literature search and collection





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











Studies on eudaimonic well-being and finance

Study results

Autonomy was found to be the most important characteristic of individuals with a fixed income. Meanwhile, materialism and individual wealth are associated with lower autonomy. Moreover, higher-income individuals are able to better cope with the environment. Wealth and a stable income are conditions for personal growth and self-acceptance. Additionally, there is better contact with others and the meaning or purpose of life is easier found.


The reliability of the studies

Despite the results, there is scarce research on the relation between eudaimonic well-being and finances. Also, research has only been conducted by using the PWB scale from Ryff and Keyes. So, future research could use different tools like an experimental study. Still, not many people are familiar with the eudaimonic dimensions. Therefore, the research topic can be classified as unexplored and promising for research.


Conclusion

This article aimed to research the impact of finances on eudaimonic well-being. Specifically, on autonomy, environmental mastery, personal growth, life purpose, self-acceptance, and positive relationships. According to studies, an individual’s finances do impact one’s eudaimonic psychological health on all characteristics. Additionally, unexpected inflows have a lasting positive impact on psychological well-being.











 

Reference list




Jaša Selinšek Robič author of article Financial impact on the eudaimonic psychological well-being

Author: Jaša Selinšek Robič




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