Poverty is most often assessed using objective measures such as absolute and relative income levels. However, different individuals may experience different levels of financial stress at the same income level. Studies have found that the perception of income is only moderately correlated with actual income level and that it is the perception itself that relates to increased rates of unhappiness and poor mental health.1  Therefore, to understand financial stress, it is critical to have measures that accurately capture these subjective experiences.

The Personal Financial Wellness Scale™ (PFW Scale™) is the preeminent tool that reliably captures the more subjective and behavior influencing components of poverty. It was developed in 2006 by Tom Garman to measure an individual’s perceived level of financial stress and wellbeing.2  Lower scores on the scale indicate lower levels of financial well-being and higher levels of financial stress. Different PFW scores have been associated with different financial behaviors. For example, research has shown that employees with high levels of financial stress are significantly less productive than employees with lower financial stress.3

The PFW Scale™ effectively measures subjective financial stress through a dependable self-reporting survey of eight questions. Over 500 major research organizations in 21 countries have used the PFW Scale™ for various significant studies. In a recent multinational study on poverty and personal wellness the Personal Financial Wellness (PFW) scale™ was used across six European countries (Germany, Italy, the Netherlands,

Slovenia, Spain, and the UK) and the US, and six languages (German, Italian, Dutch, Slovenian, Spanish, and English). The scale showed excellent reliability, convergence, and discriminant validity.4

Financial stress is a global issue with clear negative consequences for both mental health and wellbeing. It is crucial to have measuring tools that accurately identify, capture, and quantify individuals’ experiences of financial stress and the PFW Scale™ is the leading measuring tool of its kind.

For more information regarding the PFW Scale™ go to PFEEF.org or contact John Hoffmire at hoffmire@wisc.edu.

1 Sommet, N., Morselli, D., & Spini, D. (2018). Income inequality affects the psychological
health of only the people facing scarcity. Psychological Science, 29 (12), 1911–1921.
2 Prawitz, A. D., Garman, E. T., Sorhaindo, B., O’Neill, B., Kim, J., & Drentea, P. (2006).
3 Mohamad Fazli Sabri & Eugene Cheng-Xi Aw (2020) Untangling financial stress and workplace productivity: A
serial mediation model, Journal of Workplace Behavioral Health, 35:4, 211-
231, DOI: 10.1080/15555240.2020.1833737
4 Buabang, E., Ashcroft-Jones, S., (2022) Validation and Measurement Invariance of the Personal Financial Wellness
Scale: A Multinational Study in 7 Countries