title: How your bank balance buys happiness: The importance of "cash on hand" to life satisfaction.
abstract: Could liquid wealth, or "cash on hand"-the balance of one's checking and savings accounts-be a better predictor of life satisfaction than income? In a field study using 585 U.K. bank customers, we paired individual Satisfaction With Life Scale responses with anonymized account data held by the bank, including the full account balances for each respondent. Individuals with higher liquid wealth were found to have more positive perceptions of their financial well-being, which, in turn, predicted higher life satisfaction, suggesting that liquid wealth is indirectly associated with life satisfaction. This effect persisted after accounting for multiple controls, including investments, total spending, and indebtedness (which predicted financial well-being) and demographics (which predicted life satisfaction). Our results suggest that having readily accessible sources of cash is of unique importance to life satisfaction, above and beyond raw earnings, investments, or indebtedness. Therefore, to improve the well-being of citizens, policymakers should focus not just on boosting incomes but also on increasing people's immediate access to money. (PsycINFO Database Record
authors.affiliation: Department of Psychology, University of California, Riverside.
authors.forename: Peter M
authors.identifier: 0000-0002-4918-4563
authors.initials: PM
authors.lastname: Ruberton
authors.affiliation: Judge Business School, University of Cambridge.
authors.forename: Joe
authors.initials: J
authors.lastname: Gladstone
authors.affiliation: Department of Psychology, University of California, Riverside.
authors.forename: Sonja
authors.initials: S
authors.lastname: Lyubomirsky
mesh_terms: D000293:Adolescent; D000328:Adult; D000368:Aged; D006240:Happiness; D006801:Humans; D007182:Income; D008297:Male; D008875:Middle Aged; D010549:Personal Satisfaction; D011788:Quality of Life; D006113:United Kingdom; D055815:Young Adult