Publication Date



Social Policy Institute at Washington University in St. Louis


A growing body of research demonstrates that U.S. households experience a high degree of volatility in their finances. This volatility can take the form of large swings in month-to-month income, spells of unemployment, and incurring unexpected expenses.1 Beyond being difficult to predict, these income and expense shocks are costly as well, with one survey finding that the most expensive shock experienced by the median U.S. household cost roughly half of one month’s income.2This financial volatility disproportionately affects low- to moderate-income (LMI) households;3 a population that often lacks the resources to manage this volatility. For example, research from the Survey of Household Economics and Decisionmaking finds that roughly two-thirds of LMI households could not manage a modest $400 expense without taking out a loan they could not pay off immediately.4 This lack of a buffer against financial volatility is to some degree unsurprising, as the budgets of LMI households are largely taken up by essential expenses.5Yet even as households experience high degrees of financial volatility and often lack sufficient buffers against this volatility, there is an open question about the impact this volatility has on households’ sense of well-being. U.S. households report finances as their primary source of stress,6 but they also commonly report that they lead comfortable financial lives.7 These results would seem to indicate something of a disconnect between common measures of subjective and objective financial well-being and speak to the need for more research to understand the drivers of household perceptions of financial well-being.To that end, the Social Policy Institute at Washington University in St. Louis is publishing a series of briefs on financial well-being in LMI households. Our measure of financial well-being comes from the Bureau of Consumer Financial Protection’s (BCFP, formerly the Consumer Financial Protection Bureau) recently-developed financial well-being scale. The BCFP defines financial well-being as representing “financial security and financial freedom of choice, in the present and in the future.”8 This definition of financial well-being directly informed the development of the BCFP’s Financial Well-Being Scale, which provides a reliable and valid measure of subjective financial well-being.9The first brief in this series explored how financial well-being differed between LMI households and the general population. This brief, the second in the series, examines how financial well-being changes over time in a sample of LMI respondents. Using longitudinal survey data matched with administrative tax data, this brief addresses the following questions:

• How stable is financial well-being in LMI households over a six-month time period?

• Do household characteristics predict stability of financial well-being over a six-month period?

• What are the key predictors of financial well-being six months after tax filing in LMI households?

Document Type

Research Brief

Original Citation

Sun, S., Roll, S. P., Kondratjeva, O., Bufe, S., & Grinstein-Weiss, M. (2019, March). Assessing the short-term stability of financial well-being in low- and moderate-income households. (SPI Research Brief No. 19-01). St. Louis, MO: Washington University, Social Policy Institute.


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