Socioeconomic Sustainability for Low-Income Households: The Mediating Role of Financial Well-Being

Ananthan Munisamy, Sheerad Sahid () and Muhammad Hussin
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Ananthan Munisamy: Faculty of Education, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia
Sheerad Sahid: Faculty of Education, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia
Muhammad Hussin: Faculty of Education, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia

Sustainability, 2022, vol. 14, issue 15, 1-21

Abstract: Financial literacy contributes to the economic well-being of every country. Specifically, the financial literacy level of low-income households is crucial in the process of developing and building economic potential. Moreover, the knowledge, attitude, and behavior of families are essential to the financial sustainability and money-wise behavior of low-income households. Thus, financial literacy and financial well-being are vital for low-income households to survive in highly competitive marketplaces and sustain their socioeconomic status. This study intends to examine the impact of financial literacy on the socioeconomic status of low-income households. A self-administered survey questionnaire was employed, and the sample consists of 282 randomly selected respondents from low-income households in Malaysia. The data were analyzed using the Structural Equation Modelling procedure in IBM-SPSS-AMOS 26.0 to examine the causal effect. The results showed that financial literacy (consisting of financial knowledge, financial behavior, and financial attitudes) has a positive and significant impact on the socioeconomic status of low-income households. Moreover, financial well-being also mediated the effect of financial literacy on socioeconomic status. The research results provide new ideas and perspectives for improving money-wise mechanisms and the socioeconomic sustainability of low-income households.

Keywords: socioeconomic status; financial literacy; financial well-being; financial sustainability; low-income households; Malaysia B40 households (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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