The Role of Economizing and Financial Strain in Australian University Students’ Psychological Well-Being


University students have reported that they engage increasingly in more financial economizing behaviors to cope with limited resources, often to the detriment of their well-being. The objectives of this study were to investigate the mediating role of perceived financial strain between economizing behaviors and depressed mood and life satisfaction, and to compare this mediator model to the prevailing direct effects model currently reflected in the literature. Using structural equation modelling, latent-variable mediation analysis supported the notion that economizing behaviors significantly, but indirectly, predict greater depressed mood and lower life satisfaction through perceived financial strain. When examined using non-hierarchical model comparison indices, the mediation model was a superior fit to the data, compared to the direct effects model.

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  1. 1.

    In Australia, a tertiary student is any individual enrolled in a post-secondary diploma or degree program at an educational institution, such as a university or technical college.

  2. 2.

    Model fit statistics did not differ significantly when fitting the model using a sample with postgraduate students removed (χ 2 (40, N = 576) = 87.77, p < .001, χ 2/df = 2.19, CFI = .97, RMSEA = .05 (90 % CI .03–.06), AIC = 139.77, BIC = 253.02). Further, pathways coefficients did not differ significantly between the models. Consequently, postgraduate students were retained in the sample.


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The research project was approved by the Murdoch University Human Research Ethics Committee (Permit Number: 2008/019) and conforms to the provisions of the Declaration of Helsinki.

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None of the authors have a conflict of interest regarding the submission of the manuscript for publication in the Journal of Family and Economic Issues.

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Correspondence to Stuart J. Watson.

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Watson, S.J., Barber, B.L. & Dziurawiec, S. The Role of Economizing and Financial Strain in Australian University Students’ Psychological Well-Being. J Fam Econ Iss 36, 421–433 (2015).

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  • Economizing
  • Financial strain
  • Stress appraisal
  • University students
  • Well-being