The Relationship between Subjective Financial Knowledge and Financial Well-Being among Emerging Adults in Malaysia: Mediating Effect of Financial Behaviour

Abstract

This study aims to examine the relationship between subjective financial knowledge, financial behaviour, and financial well-being in emerging adults in Malaysia.Additionally, this study establishes the role of financial behaviour as a moderator in the indirect association between subjective financial knowledge and financial well-being.In total, 500 of the 700 questionnaires distributed were returned and usable in this study, resulting in a response rate of 71.4 percent.Between the ages of 19 and 29, respondents from Selangor, Pahang, Perak, Melaka, and Sabah were asked to answer the online questionnaire.On the basis of the data, the hypothetical model was statistically tested using Partial Least Square-Structural Equation Modelling (PLS-SEM), more precisely Smart Partial Least Square (SmartPLS) version 3.3.2.The findings indicated that subjective financial knowledge significantly improved financial wellbeing.Financial behaviour and financial well-being also have a substantial direct relationship.The findings indicate that financial behaviour has a significant positive indirect effect on the relationship between subjective financial knowledge and financial well-being.The findings of this study could add to the existing body of knowledge and set a new standard for governments and other groups who want to improve the public's financial well-being, especially for young people.

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