Validating Financial Well-Being Scales Across Cultures: Evidence from Eastern Cultural Contexts

Abstract

Although financial well-being plays an important role in well-being, little is understood about its context-dependence (e.g., individualistic vs. collectivistic). Most existing financial well-being scales have been developed in the context of Western cultures, especially in English-speaking nations, without assessment of the scale in other contexts. It is important to consider whether Western-developed scales are valid in Eastern cultures by exploring cross-cultural robustness and consistency. Using secondary cross-cultural data, we examine the validity, reliability, and measurement invariance of a widely used financial well-being measure originally developed by Netemeyer et al. in the context of South Korea and Taiwan. This scale reflects the hypothesized two dimensions of financial well-being: current money management stress and expected future financial security. We found that participants from the Eastern cultures (i.e., Taiwan and South Korea) interpreted the current money management stress and expected future financial security items differently compared to their Western counterparts (i.e., the US). These findings suggest that while this financial well-being scale shows promise in its ability to reflect financial well-being in an Eastern context, there is still work to be done. This study adds to existing research on financial well-being scales across cultural contexts by considering the Netemeyer et al. scale.