Journal of Behavioral and Experimental Finance 14 (2017) 30–38 Contents lists available at ScienceDirect Journal of Behavioral and Experimental Finance journal homepage: www.elsevier.com/locate/jbef Full length article Does self-control predict financial behavior and financial well-being? Camilla Strömbäck a , Thérèse Lind a , Kenny Skagerlund b , Daniel Västfjäll a,b,c , Gustav Tinghög a,d,⇤ a JEDILab, Division of Economics, Department of Management and Engineering, Linköping University, Sweden b Department of Behavioral Sciences and Learning, Linköping University, Sweden c Decision Research, Eugene Oregon, USA d The National Center for Priority Setting in Health Care, Department of Medical and Health Sciences, Linköping University, Sweden article info Article history: Received 10 April 2017 Accepted 28 April 2017 Available online 5 May 2017 JEL classification: D03 D12 G02 Keywords: Financial behavior Financial well-being Self-control Decision making Behavioral finance abstract To improve our understanding of how people make financial decisions, it is important to investigate what psychological characteristics influence individuals’ positive financial behavior and financial well- being. In this study, we explore the effect of individual differences in self-control and other non-cognitive factors on financial behavior and financial well-being. A survey containing measures of financial behavior, subjective financial well-being, self-control, optimism, deliberative thinking and demographic variables was sent to a representative sample (n = 2063) of the Swedish population. Our findings extend the application of the behavioral lifecycle hypothesis beyond savings behavior, to include general financial behavior. People with good self-control are more likely to save money from every pay-check, have better general financial behavior, feel less anxious about financial matters, and feel more secure in their current and future financial situation. © 2017 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). 1. Introduction People make bad financial decisions. We save too little for retirement (Lusardi, 1999), we overspend (Sotiropoulos and d’Astous, 2013), we do not pay our bills on time, and we sometimes buy things we regret (Abendroth and Diehl, 2006). However, we do not make bad financial decisions all the time and some of us are more or less inclined to make bad financial decisions. Moreover, some of us are more or less susceptible to feeling anxiety as a con- sequence of our financial behavior. This behavioral heterogeneity is a challenge to one-model-fits-all theories of economic behavior and as a consequence recent research has been concerned with un- derstanding the role of individual differences in financial behavior and financial well-being. However, previous research has mostly focused on the influence of cognitive factors such as financial lit- eracy (Fernandes et al., 2014; Lusardi and Mitchell, 2007) and nu- meric skills (Lusardi, 2012) on financial behavior. Less research has ⇤ Correspondence to: Linköping University, Department of Management and Engineering, Division of Economics, SE- 581 83 Linköping, Sweden. E-mail address: gustav.tinghog@liu.se (G. Tinghög). focused on the influence of non-cognitive factors related to self- control and other similar constructs such as deliberativeness. 1 In this study, we explore the influence of such factors on both finan- cial behavior and financial well-being in a large scale diverse sam- ple of the Swedish population, while controlling for financial liter- acy and demographic factors. 1.1. Individual differences and financial behavior Self-control is typically manifested as our ability to break bad habits, resist temptations and overcome first impulses (Baumeis- ter, 2002; Fujita et al., 2006). One way to define self-control is that it constitutes the ability of our future selves to control our current self. When self-control failure occurs, people act in a non-optimal way and they might, for example, procrastinate work even though 1 Borghans et al. (2008) pointed out that the usage of the words ‘cognitive and non-cognitive factors’ can be confusing since few abilities are devoid of cognition. Cognitive abilities are often measured using IQ or numeracy tests (Parise and Peijnenburg, 2017). In this paper cognitive factors are factors measured by some kind of knowledge or performance test, while non-cognitive factors are self-reported measures of personal preferences, personality, behavior, thoughts or feelings. http://dx.doi.org/10.1016/j.jbef.2017.04.002 2214-6350/© 2017 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4. 0/).