Abstract
Although earlier studies suggest improvement in relative income affects subjective well-being, literature about how savings and investing relate to happiness is limited. As Japan matures as a society, focusing on happiness among people is important from a public policy perspective. The data for this non-experimental study (n = 1,833) was a subsample of male and female adults from the 2018 and 2019 Keio Household Panel Survey, a nationally representative sample of adults in Japan. Using hierarchical regression models, this study assessed the association between household financial preparations (savings and investments) in 2018 and happiness level in 2019, as well as the association between the happiness level in 2018 and financial preparations in 2019, among adults in Japan. While the prior year’s savings were not associated with a higher happiness level a year later, a higher happiness level was associated with higher savings and investment a year later. Other variables associated with the happiness level and financial preparations include household income and educational attainment. Age had a curvilinear relationship with both happiness and investment. In sum, the findings suggest the bidirectional association between money and emotions; thus, the focus on happiness requires a multi-dimensional approach, including a supportive environment fostering individuals and families to prepare for a financially secure future. The findings have implications for financial services professionals and public policy.
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Notes
The poverty rate the OECD uses is the percentage of population below the relative poverty line, defined as half of the median household income of the population in each country. The countries with higher total (all age groups) relative poverty rates than Japan were Costa Rica, the United States, Romania, Israel, Korea, Bulgaria, Chile, Estonia, Latvia, and Mexico, respectively (OECD, 2021).
The other set of similar and possibly interesting hypotheses are: An increase in the household savings and investment is followed by an increase in the individual happiness level among adults in Japan. An increase in the individual happiness level is followed by an increase in the household savings and investment among adults in Japan. However, none of the key variables were significant when these hypotheses were tested; therefore, this paper focuses on the hypotheses presented in the main manuscript body.
The exchange rate shifts daily, and over time, it fluctuates greatly. For a reference, in April 2022, a U.S. dollar ($) was equivalent to 124.31 Japanese yen (Board of Governors of the Federal Reserve System, April 11, 2022), which makes 10,000 Japanese yen roughly equivalent to $80. The U.S. dollar equivalency used in this manuscript is based on this rate.
Approximately $81,168 in savings and $22,320 in financial investments in U.S. dollars.
Approximately $54,789 in U.S. dollars.
The models where the response variables were the changes in happiness, savings, and investment showed barely any associations between key variables. Thus, this paper reports only the results of the models with the 2019 values as the response variables.
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Acknowledgements
This study was supported by the California State University Northridge’s Research, Scholarship, and Creative Activity grant and the National Institute of General Medical Sciences (NIGMS) Building Infrastructure Leading to Diversity (BUILD) Initiative, grant number RL5GM118975. I am solely responsible for the contents; it does not represent the official views of the National Institutes of Health. I have no conflict of interest to disclose. Finally, I declare having no financial interests.
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Mimura, Y. Save Today for a Happier Tomorrow: Associations Between Happiness and Financial Preparation in Japan. J Happiness Stud 24, 1261–1281 (2023). https://doi.org/10.1007/s10902-023-00639-1
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DOI: https://doi.org/10.1007/s10902-023-00639-1