Content area
Full Text
This article describes development of the InCharge Financial Distress/Financial Well-Being Scale, designed to measure a latent construct representing responses to one's financial state on a continuum ranging from overwhelming financial distress/lowest level of financial well-being to no financial distress/highest level of financial well-being. It describes a formative Delphi study, validity criteria and testing, factor analysis, Cronbach's alpha coefficients, administration instructions, norming of the data and score interpretation, and implications for use.
Key Words: economic stress, financial distress, financial stress, financial well-being, personal finance
Introduction
An important part of overall psychological well-being is satisfaction with various aspects of life (Campbell, 1981; Campbell, Converse, & Rogers, 1976; Olsen et al., 1989). One of those domains is one's financial situation. Researchers over the past 30 years have examined both objective and subjective measures in an attempt to describe the financial condition of individuals and families. However, although all of these measures have been useful in contributing to the body of knowledge about individuals' economic situations, there has been little agreement as to the best way to measure the construct, or even which construct was being measured. Is it most helpful for financial educators and practitioners to know about the complications of a family's financial situation, particularly in counseling sessions? Perhaps even more helpful would be knowing an individual's judgments about and emotional responses to his or her financial condition. Note that objective indicators such as household income, for example, measure facets of the financial condition itself rather than one's feeling about the situation. Whereas objective indicators have been used to predict one's perceptions about the financial condition (e. g., Walson & Fitzsimmons, 1993), such indicators do not measure the depth of one's feelings about or reaction to it. Researchers have found that specific subjective measures also can be used to predict individuals' judgments about their financial condition. For example, Walson and Fitzsimmons (1993) found that subjective judgments such as satisfaction with resources and with level of living were important predictors of perceived economic well-being. More recently, Joo and Grable (2004) observed that subjective measures, such as reported levels of financial stress and risk tolerance, were related to financial satisfaction.
Campbell and colleagues (1976) presented value-laden indicators of objective variables to provide useful insights into the domains of...