Psychological beliefs and financial well-being among working adults: the mediating role of financial behaviour

Abstract

PurposeThis study aimed to assess the impact of psychological beliefs (subjective financial knowledge, financial attitude and locus of control) on financial well-being, as well as the mediating role of financial behaviour in the relationship between psychological beliefs and financial well-being among working adults in Malaysia.Design/methodology/approachA survey-based questionnaire was used to elicit information from a total of 500 working adults from Malaysia. Partial least squares structural equation modelling (PLS-SEM) was used to assess the measurement model and the proposed mediation model.FindingsThe results showed that subjective financial knowledge, financial attitude and locus of control have a positive impact on both financial behaviour and financial well-being. The results also showed that financial behaviour mediates the relationships between financial attitude and financial well-being, as well as between locus of control and financial well-being.Originality/valueGiven the anticipated global economic recession, a better understanding of how individuals manage their finances becomes ever more crucial. The findings from this research inform policymakers, practitioners and academics on the importance of psychological factors and financial management practices on financial well-being, addressing an identified gap in the current literature.

Mediating Effect of Financial Behaviour on the Relationship Between Perceived Financial Wellbeing and Its Factors Among Low-Income Young Adults in Malaysia

“…A full mediation is the result since the direct effect of internal LOC on perceived financial wellbeing is not significant (Estimate = 0.099; p -value = 0.139). This mediation result by financial behaviour is consistent with scarce past studies ( Iramani and Lutfi, 2021 ; She et al, 2022 ). This finding explains that the internal LOC of low-income young adults in Malaysia was indirectly associated with their perceived FWB through its influence on financial behaviour.…”

“…The present study contributes to the literature by incorporating financial behaviour as a mediator between LOC and perceived FWB, which is scant in the literature. Past studies have usually examined the direct relationship between LOC and financial behaviour (e.g., Britt et al, 2013 ; Arifin et al, 2018 ; Parmitasari et al, 2020 ; Adiputra, 2021 ; Triono, 2021 ), the direct relationship between LOC and FWB, wellness or satisfaction ( Prawitz and Cohart, 2016 ; Adiputra, 2021 ) or the mediating effect of LOC on the relationship between certain antecedents and FWB or financial outcomes (e.g., Grable et al, 2015 ; Bulmash, 2016 ; Furnham and Cheng, 2017 ; Ullah and Yusheng, 2020 ; Peetz et al, 2021 ), which is in line with the study by She et al (2022) . However, the present study differs from She et al (2022) by including two important socio-demographic variables into the model, i.e., income and education.…”

“…Past studies have usually examined the direct relationship between LOC and financial behaviour (e.g., Britt et al, 2013 ; Arifin et al, 2018 ; Parmitasari et al, 2020 ; Adiputra, 2021 ; Triono, 2021 ), the direct relationship between LOC and FWB, wellness or satisfaction ( Prawitz and Cohart, 2016 ; Adiputra, 2021 ) or the mediating effect of LOC on the relationship between certain antecedents and FWB or financial outcomes (e.g., Grable et al, 2015 ; Bulmash, 2016 ; Furnham and Cheng, 2017 ; Ullah and Yusheng, 2020 ; Peetz et al, 2021 ), which is in line with the study by She et al (2022) . However, the present study differs from She et al (2022) by including two important socio-demographic variables into the model, i.e., income and education. The incorporation of these variables is aligned to the proposition of the Family Resource Management Model suggesting that idiosyncratic socio-demographic characteristics influences personal financial management behaviour.…”

“…Meanwhile, studies that use financial behaviour as a mediator between locus of control and financial outcomes are present but relatively scant. One recent study was conducted by She et al (2022) who examined the mediating role of financial behaviour in the relationship between locus of control and FWB, and found a partial mediating effect of financial behaviour on the aforesaid relationship. The researchers explain that FWB is attained by applying the right behaviour, which are shaped based on the individual’s personal beliefs, value, knowledge and experience.…”

Chinese Consumers' E-Learning Satisfaction and Continuance Purchase Intention on Paid Online Python Course

“…Self-efficacy can be defined as the confidence in one's ability to perform certain learning tasks in the long term of the e-learning process or to complete tasks in the right time frame (Li et al, 2012 ; Haq et al, 2022 ; Muliati et al, 2022 ). It has been more concerned with e-learning and continuance intention (Chang et al, 2020 ; She et al, 2021a , b , 2022 ; Calaguas and Consunji, 2022 ; Sulaymani et al, 2022 ).…”