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Analysing the Predictors of Financial Stress and Financial Well-Being among the Bottom 40 Percent (B40) Households in Malaysia

Author

Listed:
  • Maslina Mansor

    (Faculty of Economics & Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

  • Mohamad Fazli Sabri

    (Department of Resource Management & Consumer Studies, Faculty of Human Ecology, Universiti Putra Malaysia, Serdang 43400, Malaysia)

  • Mustazar Mansur

    (Center for Sustainable & Inclusive Development Studies, Faculty of Economics & Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

  • Muslimah Ithnin

    (Corporate Communication Unit, Ministry of Health Malaysia, Putrajaya 62000, Malaysia)

  • Amirah Shazana Magli

    (Department of Resource Management & Consumer Studies, Faculty of Human Ecology, Universiti Putra Malaysia, Serdang 43400, Malaysia)

  • Abd Rahim Husniyah

    (Department of Resource Management & Consumer Studies, Faculty of Human Ecology, Universiti Putra Malaysia, Serdang 43400, Malaysia)

  • Nurul Shahnaz Mahdzan

    (Department of Finance, Faculty of Business & Economics, Universiti Malaya, Kuala Lumpur 50603, Malaysia)

  • Mohd Amim Othman

    (Department of Resource Management & Consumer Studies, Faculty of Human Ecology, Universiti Putra Malaysia, Serdang 43400, Malaysia)

  • Roza Hazli Zakaria

    (Department of Economics & Applied Statistics, Faculty of Business & Economics, Universiti Malaya, Kuala Lumpur 50603, Malaysia)

  • Nurulhuda Mohd Satar

    (Department of Economics & Applied Statistics, Faculty of Business & Economics, Universiti Malaya, Kuala Lumpur 50603, Malaysia)

  • Hawati Janor

    (Faculty of Economics & Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia)

Abstract

This paper aims to analyse factors affecting financial stress among the Bottom 40 Percent (B40) group of Malaysian households, reflecting overall financial well-being. Data were collected through questionnaires from 1008 respondents across five major regions in Malaysia. The data were analysed using Exploratory Factor Analysis (EFA) and Partial Least Squares-Structural Equation Modelling (PLS-SEM). This study provides evidence that financial behaviour, financial vulnerability (debt and income), and locus of control (luck and self-confidence) significantly affect financial stress among B40 households. The results show a significantly positive relationship between financial stress with financial vulnerability (debt and income) and locus of control (self-confidence). On the contrary, financial behaviour and locus of control (luck) show a significant negative relationship with financial stress. The result also indicates that financial stress affects financial well-being. Overall, the findings indicate that policy-makers should invent more effective and substantial stimulus packages or other measures to reduce the financial burden on B40 households. The findings could eventually provide insights for future research to delve into the social impact of financial stress. This study also has established a valid and reliable instrument to measure financial stress involving B40 households in Malaysia that eventually reflects the financial well-being of this group of people.

Suggested Citation

  • Maslina Mansor & Mohamad Fazli Sabri & Mustazar Mansur & Muslimah Ithnin & Amirah Shazana Magli & Abd Rahim Husniyah & Nurul Shahnaz Mahdzan & Mohd Amim Othman & Roza Hazli Zakaria & Nurulhuda Mohd Sa, 2022. "Analysing the Predictors of Financial Stress and Financial Well-Being among the Bottom 40 Percent (B40) Households in Malaysia," IJERPH, MDPI, vol. 19(19), pages 1-23, September.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:19:p:12490-:d:930489
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