Struggling to make ends meet: can consumer financial behaviors improve?

Abstract

PurposeThe purpose of the study is to examine the following two research objectives. The first was to examine the predictive relationships that consumer characteristics of financial literacy, thinking styles and self-control have with a consumer's financial behaviors. The second goal was to ascertain financial management products' ability to aid those consumers who need it the most by weakening the predictive effects of consumer traits on financial behaviors.Design/methodology/approachThe study employed a web-based survey to gather information. The measurement and structural models were analyzed using generalized structured component analysis (GSCA), a component-based structural equation model. The mediation effect of self-control is assessed using the GSCA. The conditional mediation of demographic variables and use of personal financial management products are evaluated using multi-group analysis (MGA) in GSCA.FindingsAntecedents, financial literacy, thinking styles and self-control consumer characteristics are predictors of financial behaviors. However, self-control plays a more prominent role as a mediator between the other variables, strengthening the overall relationship. Also, financial products can have a beneficial moderation effect assisting those consumers who need them the most.Practical implicationsThese insights help in creating target specific financial literacy strategies to influence consumers' financial behaviors. Also, there is a need to develop mechanisms to influence a consumer's self-control and thinking styles to improve financial behavior. In conjunction with other initiatives, the impact of financial literacy has a greater effect on financial behaviors. Further, the insights assist financial institutions and financial technology firms in offering and creating products to help customers make better financial decisions and improve their financial behaviors.Social implicationsThe research addressed a significant global issue – consumer financial health. The Great Recession and the COVID-19 recession highlight the need to focus on the consumer and efforts to improve their financial health.Originality/valueThis research highlighted the mediating role of self-control and suggested that existing and future financial products can positively influence consumer behavior drivers.

Financial Well-being and Its Psychological Determinants— An Emerging Country Perspective

“…Gamified apps for personal financial management can provide the opportunity to learn and experience similar financial situations through ‘learning by doing’ and enhancing one’s confidence through that experience. This is in line with several recent research findings (Bitrián et al, 2021; Meneau & Moorthy, 2021). The study results also find applications in promoting financial and social well-being among Indians.…”

“…Based on existing academic literature, this section constructs a theoretical framework in the form of a nomological network and hypothesizes the relationships among the constructs. We employ a building-block approach (Meneau & Moorthy, 2021) to explain how each construct relates to the other constructs in the model. The endogenous construct, FWB, is hypothesized to be influenced by the exogenous constructs—the five psychological traits: financial self-efficacy, risk tolerance, a propensity to plan, materialism and the tendency for social comparison.…”

Students' Saving Behaviour: What Are the Motives That Influence Them to Save?

“…Self-control is essential in determining the level of financial literacy efforts in influencing consumer financial behavior (Meneau & Moorthy, 2021). Typically, self-control is demonstrated by our capacity to break undesirable habits, resist temptations, and suppress our initial instincts (Baumeister, 2002;Fujita, Trope, Liberman, & Levin-Sagi, 2006).…”

Integrating Financial Management and Gamification

“…Furthermore, the exploration of psychological factors can contribute to a better understanding of financial behavior [29], [44], particularly in relation to the five personality traits: extraversion, agreeableness, conscientiousness, neuroticism, and openness [36], [50]. Additionally, it is important to objectively measure subjective factors such as financial wellness [84], [85] and financial satisfaction [1], [30], [86], [87]. Lastly, investigating the consequences of financial behavior warrants further attention [1], [30].…”

“…Additionally, it is important to objectively measure subjective factors such as financial wellness [84], [85] and financial satisfaction [1], [30], [86], [87]. Lastly, investigating the consequences of financial behavior warrants further attention [1], [30].…”