Factors Affecting Subjective Financial Well-Being of Emerging Adults in Malaysia

Abstract

Many emerging adults experience financial stress which causes a low subjective financial well-being, especially in Malaysia. Many uncertainties make emerging adults feel worried about their financial conditions, especially during the Covid-19 pandemic period. This phenomenon has attracted the authors' attention to learn the determinants of the subjective financial well-being of this group in Malaysia. In terms of data collection, questionnaires were distributed to emerging adults in Klang Valley. Then, the SPSS software is used for data analysis. The results showed that the subjective financial well-being of Malaysian emerging adults could be influenced by psychological factors such as financial stress and internal locus of control, own's attitude towards finance as well as financial knowledge. Gender has been added as a moderating variable to examine its impact on financial knowledge and SFWB and it showed a significant result too. This research could serve as a reference for the government and stakeholders for enhancing financial well-being at the stage of emerging adulthood.

Understanding Financial Behavior in Generation Z

“…Conceptually, the thinking above is in line with financial well-being which is defined as individuals or households who are sustainable in achieving their living needs comfortably, while having sufficient income and savings (Loo et al, 2023). Financial well-being is a person's belief or commitment to achieving financial security so that they do not feel any obstacles or constraints in meeting their financial needs.…”

“…In line with this concept, it is hoped that it will occur in Generation Z where in the process of achieving these expectations, various factors such as financial stress, financial attitude, self-control and financial knowledge are influenced. Studies in Malaysia have proven that these factors affect subjective financial well-being (Loo et al, 2023). In fact, mechanisms through financial knowledge can bridge the limitations of financial stress, financial attitude, and self-control in promoting financial well-being.…”