Financial literacy and financial behavior with the mediating effect of family financial socialization in the financial institutions of Lahore, Pakistan

Abstract

Purpose The main purpose of this study was to find out the relationship between financial literacy and financial behavior and to discover the mediating influence of family financial socialization on this relationship. The study also particularizes that how personal knowledge of finance of an employee and whatever they have learned through family socialization will help them to make sound decisions having a financial impact on them and their family. Design/methodology/approach Employees of financial institutions employed and residing in Lahore, Pakistan, were the target population of this report. It was a cross-sectional quantitative research study. By using a detailed questionnaire, primary data were obtained. The sample size was 330; through convenience sampling, employees employed in banks were chosen. Descriptive analysis, parametric test, reliability test, and correlational examination with the aid of SPSS 23 and the use of SmartPLS 3.0. are knowledge investigation techniques used in this examination study to infer outcomes. Results/findings The outcomes which are created from this exploration include: (1) there was no distinction in the financial conduct of representatives from various socioeconomics gatherings. Financial education has a critical positive relationship with financial behavior. (2) Family financial socialization additionally shows a huge positive relationship with financial education and financial behavior. (3) Financial education demonstrated a remarkable abnormal impact on financial behavior through family financial socialization. (4) Family financial socialization shows partial mediation between financial literacy and financial behavior. We can accomplish that formal, as well as informal, training of finance decides the financial behavior of people. Originality/value This study is the first of this kind to examine the association between financial literacy, and financial behavior using family financial socialization as a mediator and employees of financial institutions as the target population.

Self-Control, Financial Literacy, and Behavior in Organizing Money

“…Also, Kamel and Sahid (2021) confirm this fact when investigating 339 students in the universities in Malaysia. Correspondingly, Khawar and Sarwar (2021) demonstrated this proof when inspecting 330 employees working at the banks in Pakistan. Furthermore, Rohmanto and Susanti (2021) affirmed this fact once researching 276 management and accounting students in a higher school in economics in Surakarta.…”

“…Students equipped with financial literacy usually have good money-related behavior, as proven by Younas et al (2019), Komarudin et al (2020), Kamel and Sahid (2021), Khawar and Sarwar (2021), Rohmanto and Susanti (2021) and Rahayu, Ali, Aulia, and Hidayah (2022): a positive relationship exist. Unfortunately, this empirical evidence is inconsistent; for instance, the study of Khoirunnisaa and Johan (2020) and Christiany et al (2021) cannot depict this relationship.…”

Mediating Role of Psychological Maladjustment in Relation Between Dark Triad, Psychological Distress and Subjective Happiness of Pakistani Emerging Adults

“…The average age of earning for educated youth starts after 25 and may extend up to 30 years depending on the availability of jobs. However, contribution to household earnings does not necessarily mean financial independence because of the family structure in Pakistan where adults live with their parents despite being financially independent and, the eldest, usually the father, is considered the head of the family (Khawar and Sarwar, 2021). In a collectivistic society, Pakistani parents usually apply authoritarian parenting styles (i.e., harsh and bossy) and literature clearly linked the (non-authoritative) parenting styles with DT traits in parents and their offspring (Geher et al, 2020).…”

Financial Literacy and Investment Decisions: Evidence from Pakistan

“…Secondly, this research examines the effect of financial literacy on investment decisions by adopting signaling theory to discuss this relationship from a financial perspective. There are a number of existing studies that examine financial literacy in Pakistan, such as the work of Rasool and Ullah (2020); Noor, Batool & Arshad (2020); Khawar and Sarwar (2021). Some current studies investigate if financial literacy acts as a mediator affecting investment decisions and other variables including risk tolerance (Rahies, Khan, Askari, Ali, & Shoukat, 2022) and investment performance (Ahmad & Shah, 2020).…”