The role of financial behaviour, financial literacy, and financial stress in explaining the financial well-being of B40 group in Malaysia

Mahfuzur Rahman (), Che Ruhana Isa (), Muhammad Mehedi Masud (), Moniruzzaman Sarker () and Nazreen T. Chowdhury ()
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Mahfuzur Rahman: Faculty of Business and Accountancy
Che Ruhana Isa: Faculty of Business and Accountancy
Muhammad Mehedi Masud: University of Malaya
Moniruzzaman Sarker: Sunway University Business School, Sunway University
Nazreen T. Chowdhury: Faculty of Business and Accountancy

Future Business Journal, 2021, vol. 7, issue 1, 1-18

Abstract: Abstract Understanding the financial well-being of lower-income group is a critical concern of any government as this group struggles most to meet up with their necessities. Despite the significance, little is known about financial well-being of low-income group. This study attempts to investigate the relationship between financial literacy, financial behaviour, financial stress, and financial well-being of B40 group in Malaysia. A total of 412 usable responses was derived from a survey in Klang Valley and analysed the data following partial least squares structural equation modelling (PLS-SEM) techniques. The results demonstrate that financial behaviour is the key antecedent followed by financial stress and financial literacy in predicting financial well-being. Hence, balancing between income and expenditure, managing financial stress, and increasing financial literacy would be necessary to assure financial well-being of lower-income group people. Governmental and institutional interventions are essential to equip the low-income group people with employment opportunities and financial knowledge to manage their basic living standards.

Keywords: Financial well-being; Financial behaviour; Financial literacy; Financial stress; Malaysian B40 income group (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (11)

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DOI: 10.1186/s43093-021-00099-0

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