financial planning, financial therapy
This paper tests the relative strength of three objective measures of financial health (using the solvency, liquidity, and investment asset ratio) in predicting a household’s subjective feeling of current financial satisfaction. Using a sample of 6,923 respondents in the 2008 Health and Retirement Study this paper presents evidence of two main findings: 1) the solvency ratio is most strongly associated with financial satisfaction levels based on a cross-sectional design and 2) changes in the investment asset ratio are most strongly associated with changes in financial satisfaction over time.
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Garrett, S., & James III, R. N. (2013). Financial Ratios and Perceived Household Financial Satisfaction. Journal of Financial Therapy, 4 (1) 4. http://dx.doi.org/10.4148/jft.v4i1.1839