The Influence of Financial Socialization, Financial Self-Efficacy, and Self-Control on Financial Well-Being: Does Personal Financial Management Behavior Mediates the Relationship?

Vishal Sharma (), Rajesh Kumar () and Kirti Sood ()
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Vishal Sharma: Himachal Pradesh University Business School, Himachal Pradesh University
Rajesh Kumar: Himachal Pradesh University Business School, Himachal Pradesh University
Kirti Sood: University School of Business, Chandigarh University

Journal of the Knowledge Economy, 2025, vol. 16, issue 6, No 29, 18206-18236

Abstract: Abstract Financial well-being (FWB) has garnered significant attention among scholars and policymakers owing to its vital role in fostering productivity, innovation, entrepreneurial endeavors, and society’s well-being, which are the key pillars of the knowledge-based economy. Investigating the determinants of FWB in an emerging economy like India is paramount since policymaking requires utmost attention regarding the well-being of its citizens due to low rankings in various well-being and happiness indices. This study aims to bridge the existing research gap by examining how financial socialization (FS), financial self-efficacy (FSE), and self-control (SC) impact FWB, with a focus on the mediating role of personal financial management behavior (PFMB). The data is gathered from 483 young professionals belonging to Generation Y in the northern Indian region and analyzed with SmartPLS. Factor analysis and partial least squares structural equation modeling are employed to attain the study’s objectives. The study’s findings reveal that FS, PFMB, SC, and FSE significantly influence FWB in their respective orders. Additionally, PFMB establishes complementary partial mediation between FS, FSE, SC, and FWB. In a nutshell, this study presents the effect of social (FS) and psychological (FSE, SC) factors on FWB in the presence of PFMB, which broadens the knowledge base of individuals, academicians, financial advisors, employers, and policymakers on predictors of FWB. Hence, the study significantly contributes to the literature by investigating how financial knowledge created and diffused through social and psychological processes influences FWB in the presence of PFMB, which represents the behavioral application of financial knowledge.

Keywords: Financial socialization; Financial self-efficacy; Self-control; Personal financial management behavior; Financial well-being (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-025-02623-x

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