Examining Financial Anxiety Focusing on Interactions between Financial Knowledge and Financial Self-efficacy (original) (raw)

This study examined whether the association between financial knowledge and financial anxiety depends on an individual's financial self-efficacy by incorporating an interaction term between financial self-efficacy and financial knowledge. The self-efficacy component of the social cognitive theory of self-regulation has been tested using the 2018 National Financial Capability Study dataset. Households with higher financial knowledge and financial selfefficacy had lower levels of financial anxiety. After adding interaction terms of financial knowledge and financial self-efficacy in the model, the relationship between financial knowledge and financial anxiety depended on the levels of financial self-efficacy. Among those with anything less than high financial self-efficacy, the association between financial knowledge and financial anxiety weakens. The study found that financial knowledge and financial self-efficacy were significant in explaining financial anxiety and suggested implications for researchers, educators, and practitioners.