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

Author

Listed:
  • 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
    United International University)

  • Nazreen T. Chowdhury

    (Faculty of Business and Accountancy)

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.

Suggested Citation

  • Mahfuzur Rahman & Che Ruhana Isa & Muhammad Mehedi Masud & Moniruzzaman Sarker & Nazreen T. Chowdhury, 2021. "The role of financial behaviour, financial literacy, and financial stress in explaining the financial well-being of B40 group in Malaysia," Future Business Journal, Springer, vol. 7(1), pages 1-18, December.
    • Handle: RePEc:spr:futbus:v:7:y:2021:i:1:d:10.1186_s43093-021-00099-0
    DOI: 10.1186/s43093-021-00099-0
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    More about this item

    Keywords

    Financial well-being; Financial behaviour; Financial literacy; Financial stress; Malaysian B40 income group;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General

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