Imagine two individuals Mr. Happy and Mr. Sad —one stressed by bills who shops impulsively, and another who, aided by a budgeting app, saves consistently and feels secure. Their financial situations may be similar, but their emotional states lead to vastly different outcomes.

The Research acknowledges the importance of financial literacy and savings in shaping financial well-being (Lusardi & Mitchell, 2014; Vanguard, 2025). Fintech is emerging as a tool to support financial behavior (Arner et al., 2016).

The Gap addressed hereby that the  limited attention has been paid to the emotional drivers—such as stress, confidence or imposter syndrome that shape financial decision-making. To analyze how emotions and behavioral factors influence financial well-being, drawing on secondary industry data.

Behavioral Biases in Consumer Finance

• People often prefer immediate rewards over future benefits, which can affect their savings and spending habits (Thaler, 1999).
• Financial Stress: Stress can affect spending and saving. For example, stress can lead people to buy things impulsively (Shapiro & Burchell, 2021).
• Financial Confidence: People who feel confident managing money are more likely to make good financial decisions (Lusardi & Mitchell, 2014).
• Impact of Financial Imposter Syndrome
• Financial Imposter Syndrome: Some people feel financially insecure even when their finances are okay. KeyBank found that half of Americans report feeling this way (KeyBank, 2025).
• Influence of Digital Financial Tools and Fintech
• Fintech apps, like budgeting tools or automated savings apps, help people manage money better and feel less anxious about finances (Arner, Barberis & Buckley, 2016).
• Role of Emergency Savings in Financial Well-Being
• Emergency Savings: Having some money set aside for emergencies can make people feel more secure. Vanguard's research shows that having at least \$2,000 in emergency savings improves financial well-being by 21% (Vanguard, 2025).
• Socio-Demographic Factors and Emotional Financial Well-Being
• Age, income, education, and gender affect how people feel about money. Younger people often feel more stressed because of debt and lower savings (Xiao, Chen & Chen, 2014).

This study looks at secondary data from:

• 1 Deloitte's Consumer Signals Report: Insights into spending and financial stress (Deloitte, 2025).
• 2 KeyBank's Financial Mobility Survey: Examines financial imposter syndrome (KeyBank, 2025).
• 3.3 Vanguard's Emergency Savings Research: Shows the link between savings and financial well-being (Vanguard, 2025).

4.1 Financial Stress and Spending Behavior

It has been studied that even when stressed, people sometimes continue to spend. Deloitte's report shows that discretionary spending has rebounded, showing a complex link between stresses and spending (Deloitte, 2025).

4.2 Importance of Emergency Savings

People with emergency savings feel more secure and show higher financial well-being (Vanguard, 2025).

4.3 Financial Imposter Syndrome

The report highlights that the many people feel insecure about money even if their finances are okay. This affects confidence in making financial decisions (KeyBank, 2025).

4.4 Role of Fintech and Behavioral Factors

Digital tools and an understanding of behavioral biases can help people save better, spend wisely and feel less financial stress (Arner, Barberis & Buckley, 2016; Thaler, 1999).

Recommendations

• Addressing Financial Imposter Syndrome: Personalized advice can help people feel more confident and make better financial decisions.
• Emergency Savings Initiatives: Encourage saving for emergencies to improve financial security
• Financial Education: Teach people about money management to reduce stress and build confidence.
• Limitations of the Study
• The study relies solely on secondary data, which may not fully capture individual emotional responses to financial situations.
• Emotional and psychological aspects are inferred indirectly rather than measured directly.
• Data sources from industry reports may have limitations in terms of sample size, demographic representation, or regional focus.
• The study may not account for personal differences in financial behavior and emotional reactions.

Emotions play a key role in how people manage money. Understanding and addressing these emotional factors can help people make better financial decisions and improve overall financial well-being.

1. Shapiro, G. K., & Burchell, B. J. (2021). Financial stress and consumer behavior: Evidence from large-scale surveys. Journal of Behavioral Finance, 22(2), 123–138.
2. Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44.
3. Arner, D. W., Barberis, J., & Buckley, R. P. (2016). Fintech and regtech: Impact on regulators and banks. Journal of Banking Regulation, 17(3-4), 1–14.
4. Thaler, R. H. (1999). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206.
5. Xiao, J. J., Chen, C., & Chen, F. (2014). Consumer financial capability and well-being: Evidence from U.S. households. International Journal of Consumer Studies, 38(6), 593–601.
6. (2025). Emergency savings may hold key to financial well-being. Retrieved from [https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/emergency-savings-may-hold-key-financial-well-being.html](https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/emergency-savings-may-hold-key-financial-well-being.html)
7. (2025). Financial Imposter Syndrome: Navigating Perception vs. Reality in 2025. Retrieved from [https://www.key.com/content/dam/kco/documents/personal/2025\_financial\_mobility\_survey.pdf](https://www.key.com/content/dam/kco/documents/personal/2025_financial_mobility_survey.pdf)
8. (2025). ConsumerSignals: Consumer spending behavior. Retrieved from [https://www.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker.html](https://www.deloitte.com/us/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker.html)