The role of financial behavior in mediating the influence of socioeconomic characteristics and neurotic personality traits on financial satisfaction

Inherent socioeconomic characteristics and personality traits can directly affect an individual’s financial satisfaction. There is limited research on the role of financial behavior as a mediating variable for the influence of these two factors on financial satisfaction. It is important to know whether individuals with certain characteristics and personality traits can increase their financial satisfaction by improving their financial behavior. This study included 600 Indonesian participants, with primary data obtained through a structured questionnaire. Data analyses were performed using partial least squares structural equation modeling (PLS-SEM). The results indicate that at 5% of alpha, financial behavior consisting of investment, debt, and spending behavior can mediate the effects of gender, age, education, income, and traits of neuroticism on financial satisfaction. Furthermore, the higher individual scores on neuroticism, the worse their investment, debt, and behaviors are, while their herding behavior and financial dissatisfaction increase. Moreover, these people are often financially impecunious. Financial behavior plays a mediating role in the influence of socioeconomic characteristics and neurotic personality traits on financial satisfaction. If individuals with high neuroticism scores can effectively manage their financial behavior, financial dissatisfaction will decrease. They often require assistance when making decisions.