Examining Financial Anxiety Focusing on Interactions between Financial Knowledge and Financial Self-efficacy (original) (raw)
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Journal of Financial Therapy, 2023
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.
European Online Journal of Natural and Social Sciences, 2016
This study finds the impact of money attitudes on the personal financial management behavior and check the moderating effect of financial knowledge and financial self-efficacy on their relationship. The sample for this research was young adults (University students) who were also employed. From five universities where two universities were from the public sector and three were from private sector 500 respondents were selected through purposive sampling. Hierarchal Regression and factor analysis were employed to derive the results. The following are the results which are generated from this research study. Money attitudes and Financial Knowledge have a significant positive impact on the personal financial management behavior of young adults, and financial knowledge has a positive moderating impact on the relationship of money attitudes & personal financial management behavior. It was found that 20.9% Personal Financial Management Behavior is explained by money attitudes at significa...
The Economics and Finance Letters, 2019
A comprehensive financial literacy questionnaire surveyed prospective psychological constructs as antecedents (financial literacy, economic perception, financial selfconfidence, financial behavior, and personal financial performance) of applying financial self-efficacy in a large sample of working students in the hospitality and tourism industry. It is expected that financial literacy and economic perception are key antecedents of financial self-efficacy, which in turns may influence financial behaviors and personal financial performance in shaping a working student"s future skills for designing effective financial plans. For this purpose, the structural equations model was empirically tested. Moreover, the mediating indirect effects of financial self-efficacy in the relationships between financial literacy and economic environment on financial behavior and financial performance were tested through a two-phase methodological analysis. This study contributes to the literature by investigating the effects of financial self-efficacy, financial literacy and economic perception on personal financial behavior. The significance of the contribution is to propose and examine empirically a theorybased model of financial self-efficacy and financial behavior-performance in a service context among Generation Yers. Contribution/Originality: The financial efficacy model presented is applicable to different contexts, while the significant power of economic perception and financial knowledge shapes the formation of an adequate financial behavior and performance. This research not only tests the direct relationship of the constructs but also test the mediating power of financial self-efficacy. 1. INTRODUCTION Negligence to administer personal finances may generate dramatic unfavorable outcomes in personal finance among young adults (Generation Y). Financial institutions such as banks and credit unions indicate that the elevated frequency of personal economic failures, credit score issues, weak saving rates, and emotional purchasing behaviors are the main consequences of an absence of financial literacy, financial self-efficacy (FSE), and a realistic economic perception on the buyers" side (Joseph et al., 2017). Fernandes et al. (2014) state that this absence of literacy and comprehension is due to the fact that several bases of the financial world are complicated and distant to
Journal of Asian Finance, Economics and Business, 2021
This study examines the relationship between financial behavior, financial literacy, self-efficacy, and self-coping among emerging adults. The study population is 790 respondents from 11 Credit Counselling and Debt Management (CCDM). Statistical Package for Social Science (SPSS) was used to analyze Pearson Correlation and Multiple regression. It was used to determine the relationships and recognize determinants of emerging adults' financial behavior respectively. In this study, financial literacy, self-efficacy, self-coping, and financial behavior variables were entered into the regression. A total of 790 respondents aged 40 and below were selected. An independent sample t-test was administered to compare the financial behavior scores for females and males. The results reveal that there was significant difference in the mean of financial behavior scores for females (M = 87.20, SD = 18.00) and males (M = 89.70, SD = 16.80; t (765) = 2.010, p = 0.045, two-tailed). The multiple regression results indicate that the model explained 13.4% of the variance in financial behavior, which is predicted significantly by the model (F = 38.361, p = 0.000). This study will be beneficial to policymakers to improve living conditions and to promote good financial behavior, financial literacy, self-efficacy as well as self-coping especially for emerging adults in Malaysia.
Beyond Financial Literacy: The Psychological Dimensions of Financial Capability
Think Forward Initiative, 2017
Financial capability behavior (FCB) is affected by more than just financial knowledge or attitudes towards spending, it is also affected by human psychology. In this study, the relative influence of various financial and psychological variables on FCB were tested using a cross-sectional, online survey of 800 respondents in the Netherlands. Our analysis showed that while age, gender, education, financial literacy, and money attitudes explained some of the variance in FCB (adj. R2 = 0.15), the addition of the psychological constructs of optimism, non-impulsiveness, goal orientation, financial locus of control, and susceptibility to peer influences explained twice as much variance (adj. R2 = 0.29). As hypothesized we also found that higher levels of optimism (adjR2 = 0.16, B(se) = 0.17(0.02), p < 0.01), non-impulsiveness (adjR2 = 0.10, B(se) = 0.12(0.03), p < 0.01), approach goal orientation (adjR2 = 0.18, B(se) = 0.34(0.03), p < 0.01), and internal financial locus of control (adjR2 = 0.15, B(se) = 0.18(0.02), p = 0.00) were each associated with higher FCB. Inversely, avoidance goal orientation (adjR2 = 0.11, B(se) = -0.16(0.03), p < 0.01) and external financial locus of control (adjR2 = 0.11, B(se) = -0.11(0.02), p < 0.01) were associated with lower FCB. However, we found no evidence for a curvilinear relationship between optimism and FCB nor did we find any evidence for an interaction between susceptibility to peer influence and comparison with peers with FCB. Exploratory analysis did not find any substantive moderation effects for age or gender but our exploratory analysis did find that domain-specific (financial) versions of psychological constructs explained more variance in FCB than generic psychological constructs in the case of optimism, nonimpulsiveness, and goal orientation. Future research should explore the role of these psychological constructs on financial capability behavior. We also recommend that current and future interventions designed to increase financial capability behavior should consider integrating psychosocial interventions alongside any traditional knowledge-based financial literacy program.
Journal of Family and Economic Issues
We studied the association of individual differences in objective financial knowledge (i.e. competence), subjective financial knowledge (i.e. confidence), numeric ability, and cognitive reflection on a broad set of financial behaviors and feelings towards financial matters. We used a large diverse sample (N = 2063) of the adult Swedish population. We found that both objective and subjective financial knowledge predicted frequent engagement in sound financial practices, while numeric ability and cognitive reflection could not be linked to the considered financial behaviors when controlling for other relevant cognitive abilities. In addition, both objective and subjective financial knowledge served as a buffer against financial anxiety, while we did not detect similar buffering effects of numeric ability and cognitive reflection. Subjective financial knowledge was found to be a stronger predictor of sound financial behavior and subjective wellbeing than objective financial knowledge. Women reported a lower level of subjective financial wellbeing even though they reported a more prudent financial behavior than men, when controlling for sociodemographics and cognitive abilities. Our findings help to understand heterogeneity in people's propensity to engage in sound financial behaviors and have implications for important policy issues related to financial education.
European Online Journal of Natural and Social Sciences, 2014
Global competition, technology, value changes and population along with expense increase and lack of awareness about features and functions of these advantages caused countries to take into account the importance of financial planning training. Thus, individuals' financial awareness, financial well-being, and financial worry have become the matter of interest of investigators and some studies have been conducted in this area. In this regard, the current study investigated the relationship between financial literacy, financial well-being, and financial worry in the professors of Yazd Islamic Azad University. For this purpose, a questionnaire was designed; then, using random sampling, it was distributed among selected individuals. The data was analyzed using statistical analyses such as correlation and binomial. Results showed the strategy of "reducing expenses and the cost of living" is agreed on by most groups, except the group "having both financial literacy and financial well-being". In addition, none of the groups use specialized consulting services in financial area. Also, purchasing real estate is one of the common strategies. Finally, higher financial well-being caused less financial worry.
Impact of financial literacy on financial well-being: a mediational role of financial self-efficacy
Journal of Financial Services Marketing, 2022
The purpose of this paper is to explore the impact of financial literacy on financial well-being among the business school faculties. Both the variables (financial literacy and financial well-being) are operationalized as multi-dimensional constructs to undertake the study. Moreover, the paper also endeavored to examine the mediating role of financial self-efficacy between financial literacy and financial well-being. The paper adopts a survey by questionnaire method to gather data from 203 business school faculty members through the simple random sampling (SRS) technique. Confirmatory factor analysis was used for scale validation, and structural equation modeling was used for hypotheses testing. Mediation was tested using percentile bootstrap with a 95% confidence interval. The study found a significantly positive impact of financial literacy as well as its dimensions on financial self-efficacy and financial well-being. It was also found that financial self-efficacy partially mediates the effect of financial literacy on financial well-being. Measurement of the constructs was done on subjective measures, and the study is limited to business school faculties only. The present research findings could be employed in crafting educational programs for business schools. These programs shall guide such institutions in imparting the knowledge and skills among students regarding their personal finances in terms of savings and retirement planning. The study was focused on the business school faculties of the Jammu and Kashmir region, who are less exposed to the financial literacy programs due to factors like frequent lockdown and internet shutdowns. Moreover, it is generally witnessed that salaried class people in Jammu and Kashmir pay less attention to long-term financial planning for retirement, which makes the present study more relevant. Therefore, this study will prove beneficial to all the employees, especially the business school faculties, to understand the importance of financial literacy and its subsequent effect on financial well-being.
Financial Self-Efficacy and Financial Well-Being: Insights from Western Java University Students
Jurnal Proaksi, 2024
Confidence in managing personal finances is crucial for developing financial behaviors that lead to future financial well-being. This study, therefore, examines the impact of financial self-efficacy on financial well-being among university students residing in the provinces of Banten, DKI Jakarta, and West Java. Employing a quantitative research design, a sample of 124 selected respondents was analyzed using Structural Equation Modeling –Partial Least Squares (SEM-PLS) with SMARTPLS Version 3. Additionally, a sub-sample robustness check was conducted by dividing the sample into groups: Banten and DKI Jakarta students, and West Java students. The findings indicate that financial self-efficacy has a positive effect on financial well-being. The robustness check results were consistent across the main sample and both test groups. These findings underscore the necessity for universities in Banten, DKI Jakarta, and West Java to develop financial education programs aimed at enhancing students' financial self-efficacy. Financial institutions and policymakers are also encouraged to collaborate with universities to provide resources that bolster students' financial well-being.
2021
Abstract: The financial behaviour of an investor not only determines the wellbeing of individual, but that of the family, community and the nation as a whole. This makes it crucial to understand the drivers of financial behaviour. The current study is based on salaried class investors in Bengaluru, India. The researcher explored the impact of two antecedents of financial behaviour; financial literacy and financial self-efficacy. In addition, the intervening role of financial self-efficacy, on dependent and independent variables was also examined. A sample of 200 respondents were chosen for the study and data was collected through a structured questionnaire. Pearson's correlation and linear regression were used to test the hypotheses of the study. The results indicated a positive moderate correlation among the variables and suggests that financial literacy is vital in shaping the financial behaviour of an investor and this relationship is strengthened by financial self-efficacy. ...