Career & Finance
Financial stability and career development are key components of long-term well-being and personal satisfaction. The Financial/Career Measure in the Giji Index evaluates respondents' financial habits, savings capacity, and career progression to determine their level of financial health and professional growth.
This measure uses scientifically supported indicators such as the ability to save after covering essential expenses, income relative to expenditure, and changes in job roles or promotions. By providing an objective assessment of respondents' financial management and career trajectory, the Financial/Career Measure highlights opportunities for improvement and growth in these critical life areas.
Savings
Savings not only ensure the ability to meet basic needs during periods of unemployment or financial difficulty, but they also promote emotional well-being by providing peace of mind. During periods of social turmoil, the personal saving rate invariably skyrockets, as it did during the pandemic. While not great for the economy as a whole, it does enable individual households to be more resilient to negative economic shocks.
Research consistently shows that those who have an emergency fund experience less anxiety and greater life satisfaction, as they feel more in control of their financial future. The Federal Reserve Report on Economic Wellbeing of US Households recommends a 3-month buffer.
Debt-to-income ratio
Managing debt effectively is a key component of financial health. A lower debt-to-income ratio reduces financial stress and allows more flexibility in meeting both needs and wants, which is linked to higher life satisfaction. While there is no hard-and-fast rule, the Consumer Financial Protection Bureau has taken steps to prevent qualified mortgages to households with a debt-to-income of greater than 43%. Research by the University of Arizona has found that debt is negatively associated with life satisfaction.
Impulse Spending
Along with other seemingly-illogical consumer spending habits, the rise and recognition of impulse spending greatly influenced the gradual dethroning of the rational actor model of economics. Research by marketing agency DAC Group in 2019 estimated that Americans make up to 156 impulse purchases every year, spending up to $5400 annually, and contributing a combined $17.78 billion to the national economy. Although great for the economy, impulse spending is inhibitive of well-planned personal finances.
By far the most common theoretical framework for understanding impulse spending is Mehrabian and Russell's 1974 Stimulus-Organism-Response theory. S.O.R. theory envisions external sensory inputs from the commercial setting as the stimulus, the customer's disposition as the organism, and the decision to purchase the response.
When presented this way, a person has three basic methods of intervening to minimize impulse spending:
Limiting exposure to adverse stimuli.
Developing awareness of their emotional state when shopping.
Exercising executive control over purchase decisions.
Based on this research, this indicator measures subjective self-control across related fields.
Financial Stress
Engaging in stress-related financial behaviors, such as delaying payments or borrowing, is a clear indicator of financial instability. Regularly relying on such behaviors is linked to higher stress levels and reduced life satisfaction. Chronic financial stress not only impacts individual health but also affects interpersonal relationships and productivity.
Taylor and Lobel (1992) found that financial strain can lead to strained personal relationships and decreased work performance, further exacerbating feelings of dissatisfaction and instability. Conversely, adopting effective financial habits—such as budgeting, saving regularly, and making timely payments—can enhance financial security, reduce stress, and improve overall quality of life. Implementing proactive financial management strategies is essential for mitigating stress.
Financial Habits
Engaging in stress-related financial behaviors, such as delaying payments, frequently borrowing, or accruing high levels of debt, serves as a clear indicator of financial instability. These behaviors are often self-inflicted to a significant degree from inadequate financial planning, unexpected expenses, or insufficient income to meet financial obligations. However, this also means that a person generally has the power to improve their financial situation by at least some margin almost immediately.
The hazards of poor financial management are intrinsically self-reinforcing: a detrimental cycle of debt accumulation, increased financial stress, and diminished financial security. Research has demonstrated that persistent financial instability is strongly associated with elevated stress levels, which can adversely affect both mental and physical health. According to the American Psychological Association, financial stress is one of the leading sources of stress for adults, contributing to anxiety, depression, and other mental health issues. Moreover, the Consumer Financial Protection Bureau (CFPB, 2015) highlights that individuals who struggle with managing their finances are more likely to experience reduced life satisfaction and overall well-being.
At minimum, a person with excellent financial hygiene has insulated themselves against one of the most common sources of life dissatisfaction.
Career
For many people the work environment occupies the bulk of their productive output, energy expenditure, learning environment, socialising, and even emotional energy. Although not ideal for the human ideal, the degree to which an individual's career contributes or strains their quality of life is an important aspect to capture in a holistic index.
Career Development
Career development, encompassing promotions, skill enhancement, and increased responsibilities, is strongly associated with higher job satisfaction and personal fulfilment. the American Psychological Association (2021) reports that an absence of career development causes stress and dissatisfaction among employees, and simultaneously that upper-level employees are more likely to be engaged and satisfied in their work. This indicator measures this influence.
Overtime
The link between excessive work (relative to either allotted hours or to market standard) and lower quality of life is so strong as to be uncontroversial. For example, working longer than 55 hours per week is associated with a 17% increase in ischemic heart disease. A report by the World Health Organization in 2021 found that applying this research to global populations reveals around 745,000 excess deaths in 2016 were directly attributable to excessive work.
Workplace Social Life
Having strong professional relationships at work is linked to higher job satisfaction and emotional well-being. Social support at work enhances collaboration, reduces stress, and improves overall life satisfaction. Research suggests that the optimal number of friends at work follows an inverted U-shaped curve. One study has found that having around 9 to 10 close friends at work is associated with the highest levels of social support and well-being. However, beyond this point, the benefits of workplace friendships begin to decline, and social support decreases as the number of friends grows too large.
Workplace Burnout
Stress and burnout are major contributors to absenteeism and reduced job satisfaction. Regular time off due to stress negatively impacts well-being and life satisfaction, highlighting the importance of managing work-related stress.
This indicator takes an approach modeled on Feldt and colleagues' 2014 paper proposing a tripartite division of burnout factors into exhaustion, cynicism, and inadequacy.
Commute Time
Long commutes are associated with lower job satisfaction, higher stress, and reduced life satisfaction. Lengthy commutes also directly contribute to burnout. In certain cases, reducing commute time can improve mental well-being and overall quality of life.
Despite its drawbacks, the daily commute offers certain benefits by serving as both a catalyst and a buffer that distinguishes work life from home life. Commuting can function as a routine that enables us to mentally separate our personal lives from our professional responsibilities—allowing us to disconnect from personal matters in the morning and release work-related stress in the evening. Extensive research conducted over the past forty years indicates that this psychological separation significantly enhances overall well-being.
So how to quantify this? In general there does not appear to be a consistent positive or negative effect on people (beyond mere dissatisfaction) until a commute takes 30-minutes each way, 5 days per week. For full points on this indicator your commute should fall within this this parameter.
