Browse > Article
http://dx.doi.org/10.13106/jafeb.2021.vol8.no2.0273

Does Financial Behavior Influence Financial Well-being?  

CHAVALI, Kavita (College of Commerce and Business Administration, Dhofar University)
MOHAN RAJ, Prasanna (Alliance University)
AHMED, Riyaz (SDM Institute of Management Development)
Publication Information
The Journal of Asian Finance, Economics and Business / v.8, no.2, 2021 , pp. 273-280 More about this Journal
Abstract
Financial behavior and financial well-being are two closely related aspects of an individual's financial decision making. This study attempts to investigate the extent to which financial behavior influences financial well-being in the Indian scenario. The data is collected using a structured questionnaire from a sample of 150 respondents. The study employs Financial Management Behaviour Scale (FMBS) (Dew & Xiao, 2012) to measure financial behavior. Factor analysis and multiple regression are performed to find the influence of financial behavior on financial well-being. The findings of the study suggest that except for credit commitment all the other behavioral factors like future security, savings and investments, credit indiscipline, and financial consciousness have a significant impact on the financial well-being of an individual in the Indian scenario. The regression coefficients of financial well-being are strongly determined by financial consciousness. The study is a contribution to the existing behavioral studies literature and the model used identifies the factors that influence the financial well-being in the Indian scenario. The study is conducted during the year 2020, so the results could have been influenced by the economic scenario of the period. The results of the study can be used by financial advisors to understand the financial well-being in the Indian scenario.
Keywords
Financial Behavior; Financial Well-being; Financial Literacy; Emerging Economy; India;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Behrman, J. R., Olivia, S. M., Cindy, K. S., & David, B. (2012) The effects of financial education and financial literacy: How Financial Literacy Affects Household Wealth Accumulation? American Economic Review: Papers & Proceedings, 102(3), 300-304. https://doi.org/ 10.1257/aer.102.3.300   DOI
2 Camilla, S., Lind, T., Skagerlund, K., Vastfjall, D., & Tinghog, G. (2017). Does self-control predict financial behavior and financial well-being? Journal of Behavioural and Experimental Finance. 14, 30-38. https://doi.org/10.1016/j.jbef.2017.04.002   DOI
3 Dew, J., & Xiao, J. J. (2012). The financial management behavior scale: Development and validation. Journal of Financial Counselling and Planning, 22(1), 43-59. https://www.afcpe.org/assets/pdf/vol_22_issue_1_dew_xiao.pdf
4 Fazli, S. M., Cook, C. C., & Gudmunson, C. G. (2012). The financial well-being of Malaysian college students. Asian Education and Development Studies, 1(2), 153-170. https://doi.org/10.1108/20463161211240124   DOI
5 Fernandes, D., Lynch, J. G., & Netemeyer, R. G. (2014). Financial literacy, financial education, and downstream financial behaviors. Management Science, 6(8), 54-69 https://doi.org/10.1287/mnsc.2013.1849   DOI
6 Fujita, K. Y., Trope, N., Liberman, M., & Levin-Sagi. (2006), Construal levels and self-control, Journal of Personality and Social Psychology, 90(3), 351-367. https://doi.org/10.1037/0022-3514.90.3.351   DOI
7 Gathergood, J. (2012). Self-control, financial literacy, and consumer over-indebtedness. Journal of Economic Psychology, 33, 590-602. https://doi.org/10.1016/j.joep.2011.11.006   DOI
8 Gerardi, K., Goette, L., & Meier, S. (2010). Financial literacy and subprime mortgage delinquency: Evidence from a survey matched to administrative data. https://www.frbatlanta.org/research/publications/wp/2010/10.aspx.
9 Gutter, M., & Copur, Z. (2011). Financial behaviors and financial well-being of college students: Evidence from a National Survey. Journal of Family and Economic Issues, 32(4), 699-714. https://doi.org/10.1007/s10834-011-9255-2   DOI
10 Hagadorn, B M. (2017). Role of colleges and universities in student's financial well-being Journal of Higher Education: Theory and Practice, 17(8), 18-29.
11 Hofferth, S. L. (2006). Residential father family type and child well-being: Investment versus selection. Demography, 43(1), 53-77. https://doi.org/10.1353/dem.2006.0006   DOI
12 Hung, A., Parker, M., Andrew., & Yoong, J. K. (2009). Defining and measuring financial literacy. Working Paper WR-78. RAND Corporation, https://www.rand.org/content/dam/rand/pubs/working_papers/2009/RAND_WR708.pdf.
13 Kahneman, D., & Krueger, A. B. (2006). Developments in the measurement of subjective well-being. Journal of Economic Perspectives, 20(1), 3-24. https://doi.org/10.1257/089533006776526030   DOI
14 Lusardi, A., & Mitchell, O. S. (2007). Baby boomer's retirement security: The role of planning, financial literacy, and housing wealth. Journal of Monetary Economics, 54(1), 205-224.   DOI
15 Lusardi, A., & Mitchell O. S. (2011). Financial literacy around the world: An overview. Working Paper 17107. Cambridge, MA: National Bureau of Economic Research.
16 Lusardi, A. (2012). Numeracy, financial literacy, and financial decision making. Working Paper 17821. Cambridge, MA: National Bureau of Economic Research.
17 Lusardi, A., Daniel, S., & Peter T. (2011). Financially fragile households: Evidence and implications. Brookings Papers on Economic Activity, 42(1), 83-150. https://www.brookings.edu/wp-content/uploads/2011/03/2011a_bpea_lusardi.pdf   DOI
18 Zulfaris, M. D., Mustafa, H., Mahussin, N., Alam, M. K., & Daud. Z. M. (2020). Students and money management behavior of a Malaysian public university. The Journal of Asian Finance, Economics, and Business, 7(3), 245-251. https://doi.org/10.13106/jafeb.2020.vol7.no3.245   DOI
19 Susilowati, N., Latifah, L., & Jariyah, O. (2017). College student financial behavior: An empirical study on the mediating effect of attitude toward money. Advanced Science Letters, 23(8), 7468-7472. https://doi.org/10.1166/asl.2017.9500   DOI
20 Xiao, J. J., Tang, C., & Shim, S. (2009). Acting for happiness: Financial behavior and life satisfaction of college students. Social Indicators Research, 92, 53-68. https://doi.org/10.1007/s11205-008-9288-6   DOI
21 Setiawati, S., & Nurkhin, A. (2017). Testing of student financial literacy construct dimensions. Economic Education Analysis Journal, 3(1), 727-736. https://journal.unnes.ac.id/sju/index.php/eeaj/article/view/20283
22 Mandell, L., & Klein, L. S. (2009). The impact of financial literacy education on subsequent financial behavior. Journal of Financial Counselling and Planning, 20(1), 15-24. https://files.eric.ed.gov/fulltext/EJ859556.pdf
23 Marsh, B. A. (2006). Examining the personal financial attitudes, behavior, and knowledge levels of the first-year and senior students at Baptist Universities in the State of Texas. Doctoral thesis, Bowling Green State University. https://scholarworks.bgsu.edu/he_diss/8/
24 Miotto, A. P. S. C., & Parente, J. (2015). Antecedents and consequences of household financial management in Brazilian lower-middle-class. Revista de Administracao de Empresas, 55(1), 50-64. https://doi.org/10.1590/S0034-759020150106   DOI
25 Mokhtar, N., Sabri, M. F., & Ho, C. S. F. (2020). Financial capability and differences in age and ethnicity. The Journal of Asian Finance, Economics, and Business, 7(10), 1081-1091. https://doi.org/10.13106/jafeb.2020.vol7.no10.1081   DOI
26 Puri, M., & Robinson., D. T. (2007). Optimism and economic choice. Journal of Finance and Economics, 86(1), 71-99. https://doi.org/10.1016/j.jfineco.2006.09.003   DOI
27 Netemeyer, R. G., Warmath, D., Fernandes, D., & Lynch, J. G. (2018). How am I doing? Perceived financial well-being, its potential antecedents, and its relation to overall well-being. Journal of Consumer Research, 45(1), 68-89. https://doi.org/10.1093/jcr/ucx109   DOI
28 Pirouz, D. (2009). Culture, self-control, and consumer financial behavior. Advances in Consumer Research, 36, 908-909. https://www.acrwebsite.org/volumes/14670/volumes/v36/NA-36
29 PricewaterhouseCoopers. (2019). Special report: Financial stress and the bottom line. https://www.pwc.com/us/en/privatecompany-services/publications/assets/pwc-2019-employeewellness-surveO. .pdf.
30 Sabri, M. F., & Zakaria, N. F. (2015). The influence of financial literacy, money attitude, financial strain, and financial capability on young employees' financial well-being. Pertanika Journal of Social Sciences and Humanities, 23(4), 827-848.
31 Starobin, S. S., Hagedorn, L. S., & Purnamasari, A. (2013). Examining financial literacy among transfer and non-transfer students: Predicting financial well-being and academic success at a four-year university. Journal of Research and Practice, 37(3), 216-225. https://doi,org/10.1080/10668926.2013.740388   DOI
32 Statman, M. (2008). Countries and culture in behavioural finance. CFA Institute Conference Proceedings Quarterly, 25(3), 38-44. https://doi.org/10.2469/cp.v25.n3.6   DOI
33 Stromback, C., Lind, T., Skagerlund, K., Vastfjall, D., & Tinghog, G. (2017). Does self-control predict financial behavior and financial well-being? Journal of Behavioral and Experimental Finance, 14, 30-38. https://doi.org/10.1016/j.jbef.2017.04.002   DOI
34 American Psychological Association (APA) (2015). Stress in America paying with our health. American Psychological Association Press. http://www.apa.org/news/press/releases/stress/2014/stress-report.pdf.
35 Strunk, D. R., Lopez, H. R., & Rubeis, J. D. (2006). Depressive symptoms are associated with unrealistic negative predictions of future life events, Behaviour Research and Therapy, 44(6), 861-882. https://doi.org/10.1016/j.brat.2005.07.001   DOI
36 Achtziger, A., Hubert, M., Kenning, P., Raab, G., & Reisch, L. (2015). Debt out of control: The links between self-control, compulsive buying, and real debts. Journal of Economic Psychology, 49, 141-149. https://doi.org/10.1016/j.joep.2015.04.003   DOI
37 Akben, S. E. (2015). Factors influencing college students' financial behaviors in Turkey: Evidence from a National Survey. International Journal of Economics and Finance, 7(6), 87-94. https://doi.org/10.5539/ijef.v7n6p87   DOI
38 Arifin, A. Z. (2017). The influence of financial knowledge, control, and income on individual financial behavior. European Research Studies Journal, 20(3), 635-648. https://www.ersj.eu/dmdocuments/2017-xx-3-a-43.pdf
39 Bakar, M. Z. A., & Bakar, S. A. (2020). Prudent financial management practices among Malaysian youth: The moderating roles of financial education. The Journal of Asian Finance, Economics, and Business, 7(6), 525-535. https://doi.org/10.13106/jafeb.2020.vol7.no6.525   DOI
40 Bayer, J. B., Bernheim, B. D., & Scholz, J. K. (2009). The effects of financial education in the workplace: Evidence from a survey of employers. Economic Inquiry, 47(4), 605-24. https://doi.org/10.1111/j.1465-7295.2008.00156.x   DOI