The connections between financial well-being and health are many and varied. Households often make healthcare decisions based on their financial resources. At the same time, the health status of individual family members can affect the household’s financial well-being. Families are increasingly challenged by economic uncertainties that result from climate change, the realities of an unstable global marketplace, and changing domestic policies. In addition, financial capability, access to quality affordable healthcare, and inequality influence household decision-making and ultimately their health and well-being.

There is a pressing need to understand family and consumer financial and health decision-making under this economic uncertainty. Tradeoffs between the human capital of health and financial capital happen daily as households manage their resources.

The Need and Importance of the Work

The National Endowment for Financial Education (NEFE) provides leadership, research, and collaboration to advance financial well-being. While not intended as a research model, the NEFE Personal Finance Ecosystem is a research-informed framework that researchers can use to conceptualize the foundations that underlie an individual’s state of financial well-being as well as to test relationships and pathways throughout the framework (NEFE, n.d.). A visual representation of the Ecosystem is available at https://www.nefe.org/initiatives/ecosystem/ The Ecosystem includes the core concepts of foundational factors (general skills and competencies, values and beliefs, family and culture, socioeconomics and geography), financial knowledge and access (financial knowledge, financial skills, access and inclusion), and financial actions and outcomes (mindset and available choice set, decisions and actions, resulting outcomes). Financial well-being is at the center of this ecosystem. It is unique to each individual and fluctuates over time. As NEFE envisions it, financial well-being typically includes satisfactorily managing one’s current financial situation, the ability to exercise choice and feel in control of finances, and the outlook for future prospects. With its emphasis on understanding the financial and health decision-making processes of individuals and families, the proposed project can contribute to NEFE’s goal of understanding the financial ecosystem and improving it. 

The Extension Committee on Policy (ECOP), the representative leadership and governing body of the Cooperative Extension System, has identified health and well-being as an important advocacy topic (https://advocacy.extension.org/#advocacy-topics). Burton et al. (2021) point to climate change and health insurance as two examples of societal and environmental influences affecting how people live their lives and ultimately their well-being. In describing well-being, they state that well-being includes “how satisfied people are with their lives as a whole, the sense of control they have over their lives, and their sense of purpose in life….being accepted into and belonging to a community, providing and receiving support from others, and….creating equitable opportunities for people to thrive in every aspect of life and to create meaningful futures” (p. 4). To attain well-being, families and consumers are faced with complex decisions that often impact both their finances and their health. In the 2021 Extension Framework for Health and Well-being, Burton et al. distinguish between root causes of structural inequality; norms, practices, and policies; and social determinants of health. Among the roles the model tasks Cooperative Extension with is identifying health inequities existing in a given community and then promoting healthy behaviors through communication and education. Burton et al. make several recommendations that should be addressed to achieve the framework’s goals. With the emphasis on financial and health decisions and well-being, the objectives of the proposed project firmly support Recommendation 4.3, “Establish and strengthen relationships…to foster interdisciplinary and collaborative health-related research, teaching and community engagement” (p. 16).

This project builds on the work of previous projects that focused on the complex nature of saving (2008-2013), financial decision-making and information management across the lifespan (2013-2018), and the intersection of healthcare and financial decision-making across the lifespan (2018-2023). A unifying theme running through this work has been the application of a behavioral economics framework.

When a household manages its resources, there is a tradeoff between the human capital of health and the financial capital of the household. In a household economics framework, health is produced with inputs of market goods and services, and it also determines the amount of time available for market and nonmarket production (Anderson & Grossman, 2009). This project will examine factors contributing to household financial and/or health decisions and well-being and assess the role of financial capability, access to quality healthcare, and inequalities on household decision-making and well-being.

Building upon what we have learned over the past 15 years, and continuing to apply the framework of behavioral economics, this new research fills an important gap in understanding the impact of economic uncertainties on financial and health decision-making processes and outcomes. This project is also important for its continued potential contribution to the field of family and consumer economics. The research is informed by the latest advancements in behavioral economic theories and has the potential to improve the overall well-being of American households. The findings of this research are expected to inform both practice and policy making to improve household well-being.

Technical Feasibility

One of the benefits of conducting research as a multi-state team is the ability to access the resources, skills, talents, and diverse experiences of project participants toward the accomplishment of a goal that is greater than the theoretical sum of its parts. We will continue to leverage the vast amounts of expertise that project participants have in all aspects of scholarship. Project participants will also be able to leverage collaborators from their respective campuses, mainly from areas of public health and/or healthcare administration. Consistent with recommendations in Burton et al. (2021), we will also seek to establish relationships with external partners and others to share expertise and leverage limited resources.

Advantages of Doing This Work as a Multistate Effort

This team has 15 years of successful collaboration bringing different skills and expertise to the project. Project participants have identified strengths of team members which serves to focus our efforts. Over time, participants have joined the project contributing fresh perspectives and added skills. The anticipated project team includes participants from 1862 and 1890 land-grant universities and other public and private universities. Participants are from all regions of the country. They bring diverse expertise related to the three land-grant missions of teaching, research, and extension.

Likely Impacts

This project is expected to result in a greater understanding of how families make financial and health decisions under economic uncertainties. The results will provide a foundation for developing, implementing, and evaluating educational initiatives to increase financial capability, positively impact health related decisions, and inform policy making to improve household well-being.

As demonstrated in previous work, this group has a strong reputation among those in the field of family and consumer economics as a leader in innovative research methods. Participants expect to continue to explore, use, and share our discoveries of innovative and cost-effective ways to collect data.