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

Abstract

The main objective of this study is to investigate the associations between financial knowledge, locus of control (LOC) and perceived financial wellbeing (FWB) with financial behaviour as a mediator among young adults from low-income households in Malaysia, controlling for education and income. The sample of this study consisted of 482 young adults from five different zones in Peninsular and East Malaysia, which were selected using a multi-stage sampling technique. Data were collected using a set of questionnaire-based surveys. The data were then analysed using Covariance Based Structural Equation Modelling (SEM). The study found that financial knowledge and external LOC as well as financial behaviour were significantly correlated with the perceived FWB of low-income young adults in Malaysia. The results also revealed that financial behaviour mediates the influence by financial knowledge and internal LOC on perceived FWB controlling for education and income. The findings of this study provide insights into the factors of perceived FWB of low-income young adults in Peninsular and East Malaysia. Policymakers, government and non-government organisations may utilise this study to develop new policies, financial programmes or campaigns to enhance the FWB of low-income young adults in Malaysia.

Impact of financial behaviour on financial well-being: evidence among young adults in Malaysia

“…This study discovered that financial behaviour has a significant positive influence on financial well-being ( β = 0.48, t = 3.10, p < 0.05) in the non-mediation model. This finding is consistent with recent local studies (Mahdzan et al 2019 ; Sabri et al 2022 ), which discovered that being financially healthy and happy necessitates positive financial behaviour, such as regular savings and proper credit management. Interestingly, the researchers discovered that financial literacy has no significant influence on financial well-being ( β = 0.09, t = 1.82, p > 0.05), contrary to previous research that found financial literacy to be important in determining financial well-being (Koposko 2013 ; Rahman et al 2021 ; Taft et al 2013 ).…”

Analysing the Predictors of Financial Stress and Financial Well-Being among the Bottom 40 Percent (B40) Households in Malaysia

“…Furthermore, financial knowledge may not directly influence financial stress and might need to be examined in different observations. According to Sabri, et al [93], financial well-being may be achieved by the adoption of appropriate behaviors that are influenced by an individual's unique set of values, beliefs, skills, and personal experiences. In fact, a lack of financial knowledge or financial illiteracy is one of the causes of financial stress that diminish financial well-being [94,95].…”

A Descriptive Study Of Demographic Factors And Takaful Subscription In Kota Kinabalu Sabah Based On The Theory Of Planned Behaviour

“…The financial behaviour of individuals is influenced by various factors, such as their demographic characteristics, personal values, and social norms (Kusairi et al, 2019;Muhamad et al, 2021;Sabri et al, 2022). Among these factors, the role of demographics in shaping Takaful preferences and choices is particularly relevant in the context of changing population structures and economic conditions (Yakob et al, 2019).…”

“…The changing nature of work and economic conditions requires a thorough analysis of the complex relationship between demographic factors and Takaful trends among workers (Roberts et al, 2023;Sequeira et al, 2023;Tran et al, 2020). As organisations aim to develop inclusive and effective policies (Amarnath et al, 2019), and policymakers try to create relevant financial education programs (Kusairi et al, 2019;Mahdzan & Tabiani, 2013;Muhamad et al, 2021;Sabri et al, 2022), a detailed understanding of the factors influencing Takaful choices becomes essential. This paper intends to examine the demographic characteristics of a surveyed population and investigate their Takaful Subscription patterns, based on the well-known Theory of Planned Behaviour (Yakob et al, 2019).…”