Executive Summary
From security to independence: Assessing financial well-being
Money is more than just a number in your bank account – it can evoke a range of emotions. How secure do we feel in view of the current economic climate? What financial concerns weigh most heavily on our minds, and what goals motivate us? The IU Financial Well-Being study addresses these questions and reveals how people in Germany feel about their financial security, challenges and ambitions.
Every age group, from Generation Z to the baby boomers, has its own attitude towards their financial future, security and, consequently, financial well-being. The representative study by IU International University of Applied Sciences provides a comprehensive picture of the different generations and their financial sentiments, goals and attitudes.
Looking at the general economic climate, a common sentiment emerges: one in two people in Germany is concerned about the current economic climate. When comparing generations, it is the baby boomers that stand out: 61.1% of them say they are worried about the current economic situation.
People in Germany have mixed feelings about their personal financial situation. While 30.9% of respondents say they are satisfied, 30.2% feel insecure. Among Generation Z, the positive feeling of hope is also reported more frequently (26.9%) than among other generations. In contrast, Generation Y stands out with a comparatively higher proportion of frustration (21.4%).
In Germany, financial independence is one of the most frequently cited personal financial goals (58.9%), followed by retirement provision (51.4%). Compared to other generations, Generation Z is more likely to cite freedom, fulfilling personal wishes and life goals, buying a house and covering education expenses as goals.
In addition to financial targets, there are also obstacles: For example, 16.3% of 16- to 30-year-olds agree completely or somewhat that they lack an overview of their own financial situation. Furthermore, Generation Z is twice as likely as baby boomers to be influenced by social media when making financial decisions. Further insights are provided in the focus topic “The younger generation and money matters”.
In an interview about the IU study, financial expert Prof. Dr Johannes Treu, Professor of General Business Administration and Economics at IU International University of Applied Sciences, shares his practical insights on the topic of “financial well-being” and offers tips on how to strengthen it in a targeted manner.
What does “financial well-being” mean?
Prof. Dr Johannes Treu is a financial expert and professor at IU International University of Applied Sciences. He defines the term “financial well-being” for us.
Financial well-being: Definition
Financial well-being describes the state in which an individual is able to manage their financial needs and obligations smoothly, cope with negative shocks, pursue their desires and goals, take advantage of opportunities, and feel satisfied and confident about their financial situation. Financial well-being takes into account both objective and subjective elements, and encompasses:
Future planning
This aspect encompasses the systematic accumulation of capital for clearly defined life goals (and life stages). Examples include purchasing a property, financing education expenses or building up sufficient retirement provisions for security.
Financial freedom
The feeling of having enough money to live the lifestyle you want and fulfil your wishes without having to take on excessive debt. This gives you the freedom to make changes to your career, invest in personal projects and achieve your life plans, for example.
Financial literacy
Financial literacy refers to the combination of knowledge, skills, attitudes and behaviours required to make informed decisions about personal finances, such as budgeting, investing and managing debt, in order to secure one’s own or one’s family’s long-term financial well-being.
Financial stress level
This refers to the psychological and emotional stress caused by one’s personal financial situation. It shows the extent to which uncertainty and concerns about income, expenditure, debt and future provisions are felt. A high level of financial stress has a negative effect on well-being and physical and mental health.
Prof. Dr Johannes Treu
Professor of General Business Administration and Economics at IU International University of Applied Sciences
Key Facts
Study on financial well-being: The key findings
More than half of people are concerned about the economic climate.
56.3%
of those surveyed completely agree or tend to agree with the following statement: “The current economic climate in Germany worries me.”
Primary goal: Financial independence
58.9%
of respondents cite financial independence as one of their most important financial goals.
Almost half of all respondents have their finances under control.
48.9%
completely agree or tend to agree that they have good control over their financial situation thanks to their knowledge of finance.
More than a third feel secure in their financial situation.
35.2%
of those surveyed feel very or somewhat secure in their financial situation. 37.7% say they feel partly secure.
There is a concern about poverty in old age.
49.7%
of those surveyed completely agree or tend to agree that they are concerned about not having sufficient financial security in old age.
There is room for improvement in terms of financial well-being.
53
out of a maximum of 100 points is the average score achieved by people in Germany when measuring financial well-being.
More than half of people are concerned about the economic climate.
56.3%
of those surveyed completely agree or tend to agree with the following statement: “The current economic climate in Germany worries me.”
Primary goal: Financial independence
58.9%
of respondents cite financial independence as one of their most important financial goals.
Almost half of all respondents have their finances under control.
48.9%
completely agree or tend to agree that they have good control over their financial situation thanks to their knowledge of finance.
More than a third feel secure in their financial situation.
35.2%
of those surveyed feel very or somewhat secure in their financial situation. 37.7% say they feel partly secure.
There is a concern about poverty in old age.
49.7%
of those surveyed completely agree or tend to agree that they are concerned about not having sufficient financial security in old age.
There is room for improvement in terms of financial well-being.
53
out of a maximum of 100 points is the average score achieved by people in Germany when measuring financial well-being.
There could be marginal deviations in the results due to rounding off.
Financial well-being forms the foundation for a contented, stable life. Especially in times of inflation, declining economic growth and economic uncertainty, it is more important than ever to have your finances under control and to protect yourself against risks. Those who plan ahead and recognise risks in good time not only create personal stability, but also strengthen the resilience of our entire society.”
Prof. Dr Johannes Treu
Professor of General Business Administration and Economics at IU International University of Applied Sciences
Study contents
Financial well-being: discover all the facts and figures now
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