Financial well-being: A reality check (according to the OECD toolkit)
An average of 53 out of 100 points – that is what people in Germany score in a representative survey on financial well-being in Germany conducted by IU International University of Applied Sciences, measured using the toolkit developed by the OECD.¹
The average overall value is derived from the dimensions “Objective financial well-being” and “Subjective financial well-being”:
In comparison: 2022² measurement of financial well-being by the OECD³
¹The OECD Toolkit for Financial Literacy and Financial Inclusion is a tool developed by the OECD (Organisation for Economic Co-operation and Development) to assess and compare financial well-being in different countries.
²As part of the OECD’s data collection in 2022, 1,000 people in Germany aged between 18 and 79 were surveyed by telephone, representing a cross-section of the German population.
³ Quelle: www.oecd.org/content/dam/oecd/en/publications/reports/2023/12/oecd-infe-2023-international-survey-of-adult-financial-literacy_8ce94e2c/56003a32-en.pdf, page 49
Two important terms, explained briefly:
Objective financial well-being
This is also referred to as financial resilience or financial security and describes a person’s ability to cope with unexpected expenses. For example, in the event of job loss or illness. It is not just a question of how much money you have, but also whether you have the necessary resources to continue to meet your financial obligations in times of crisis without ending up in an emergency situation.
Subjective financial well-being
This describes a person’s own feelings about their financial situation. Unlike objective indicators such as income or assets, this value measures how satisfied, secure or stressed someone feels.
Therefore, it is not about how much money a person has, but how they feel about their money. This value is particularly important for understanding whether financial measures actually improve people’s quality of life.
With 53 out of 100 points, the financial well-being of people in Germany is significantly below the OECD average for 2022. Behind this figure lies a worrying trend: many people feel financially stretched and burdened by existential concerns. Those who can barely make ends meet at the end of the month are not only dissatisfied, but they also experience a kind of constant psychological stress. Financial knowledge alone is not enough here – what matters is having some leeway left after paying living expenses. However, rising prices for housing, energy and food are steadily eroding purchasing power. This is a warning signal that politicians and business leaders must take seriously.”
Prof. Dr Johannes Treu
Professor of General Business Administration and Economics at IU International University of Applied Sciences
