Demographic characteristics influencing financial wellbeing: a multigroup analysis

Abstract

PurposeThe study attempts to understand the factors impacting the financial wellbeing of IT employees in India using confirmatory factor analysis (CFA). It utilizes well-established survey instruments to assess the impact of financial literacy, financial behaviour and financial stress on financial wellbeing. The study also attempts to understand the role of demographic factors (age, gender, monthly income, job category and work experience) in determining financial wellbeing through multigroup analysis.Design/methodology/approachStructured equation modelling (SEM) is used to study the link between the determinants. The study also attempts to understand the role of demographic factors (age, gender, monthly income, job category and work experience) in determining financial wellbeing through multigroup analysis. Data used for the analysis covers 237 employees working in the IT sector.FindingsWhile financial literacy and financial behaviour have a significant positive impact on financial wellbeing, financial stress has a significant negative impact. Financial behaviour and financial stress were found to have a mediating role in the relationship between financial literacy and financial wellbeing. The demographic variables significantly moderate the relationship between the factors leading to financial wellbeing.Originality/valueThe results show the need for financial wellbeing programs to focus on enhancing financial knowledge and improving financial planning. Further, it suggests offering customized financial wellbeing programs based on the employee's demographic characteristics rather than following a “one program, fits all” approach.

Determinants of the financial wellbeing of individuals in an emerging economy: an empirical study

“…Further, Prakash et al (2022) reveal that demographic factors, namely, gender, age, income level, and work experience, significantly influence financial wellbeing. The workers have greater financial wellbeing than the homemakers and unemployed (Garc ıa-Mata et al, 2022).…”

“…The workers have greater financial wellbeing than the homemakers and unemployed (Garc ıa-Mata et al, 2022). On financial wellbeing, some well-known studies have been done in Malaysia (Sabri et al, 2020;She et al, 2021;Anthony et al, 2022;Munisamy et al, 2022); India (Chatterjee et al, 2019;Mahendru et al, 2022;Prakash et al, 2022), USA (Anvari-Clark and Ansong, 2022), Swedish (Barrafrem et al, 2021), Greece (Philippas and Avdoulas, 2020), and West Africa (Adam et al, 2017). After observing the relevant articles, it is clear that little empirical evidence shows the determinants of individuals' financial wellbeing.…”

“…In the conceptual model of financial wellbeing, some well-known studies (e.g. Furnham and Cheng, 2017;Tahir et al, 2021;Dzogbenuku et al, 2022;Garc ıa-Mata et al, 2022;Parvathy and Kumar, 2022;Prakash et al, 2022) are already conducted. Furthermore, Parvathy and Kumar (2022) examine that financial capability contributes significantly to ensuring women's financial wellbeing in the long run.…”

“…The Reserve Bank of India (RBI) has brought many initiatives to strengthen the financial literacy level in India. It contributes to every country's economic wellbeing (Prakash et al, 2022). According to Mahendru et al (2022), India shows an example of various practices and understanding of financial wellbeing.…”

“…Several researchers demonstrate that financial behavior and its relationship with financial wellbeing are significantly and positively associated (Gutter and Copur, 2011;Mokhtar and Husniyah, 2017;She et al, 2021). Notably, Prakash et al (2022) reveal that financial literacy can considerably lower the financial stress of persons below the age of 30 years. It enhances the capability of individuals to handle financial stress and increases confidence and trusts Organization for Economic Co-operation and Development (OECD, 2020).…”