The Role of Financial Behavior, Financial Stress, and Financial Well-Being in Explaining Islamic Financial Literacy among University Students

Abstract

Objective – The objectives of the study are to assess the level of students’ knowledge of Islamic finance and examine their financial behavior (FB), financial stress (FS), and financial well-being (FWB). Methodology – The study applies a quantitative research method with primary data collection using a non-probability convenience sampling technique. The questionnaires were distributed to 155 students, including undergraduate and postgraduate students. Findings and Novelty –The study concludes that only the financial well-being hypothesis was supported, meaning that financial well-being influences the level of Islamic financial literacy (IFL). The study contributes to the various stakeholders. For the government authority, this study can be a reliable benchmark for the level of Islamic financial literacy among university students. For the university authority, this study helps the university assess students’ Islamic financial literacy level. For the Islamic financial industry, it tells what needs to be improved by the community members. Moreover, this study contributes to the existing literature on Islamic financial literacy. The study also recommends future research to study other variables related to Islamic financial literacy and include a wider sample from different universities. Type of Paper: Empirical JEL Classification: I22, M29, O16 Keywords: Islamic financial literacy; financial behaviors; financial stress; financial well-being Reference to this paper should be made as follows: Doloh, A; Redzuan, N.H. (2023). The Role of Financial Behavior, Financial Stress, and Financial Well-Being in Explaining Islamic Financial Literacy among University Students, J. Fin. Bank. Review, 8(1), 43 – 57. https://doi.org/10.35609/jfbr.2023.8.1(2)

Muslim young adults’ financial strain and financial stress during the COVID-19 pandemic: The moderating role of religiosity

“…, 21; 12] referred financial stress as an individual's feeling about his current financial situation, whereas financial strain referred to the degree at which an individual experience financial difficulty. Specifically, financial stress can be defined as the overwhelming pressure and complexity of managing general financial obligations due to lack of financial resources [ 2 ]. On the other hand, according to Ettman et al (2023) [ 3 ] financial strain refers to “the ability of people to cover their expenses with assets available, whether measured as the perception of strain or reactions to their inability to pay for needs.” According to Caplan and Schooler (2007) [ 4 ], financial strain ( i.e.…”