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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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    Cited by:

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    3. Mohamad Fazli Sabri & Mas Ayu Said & Amirah Shazana Magli & Tan Maw Pin & Hussein Rizal & Nithiah Thangiah & Muslimah Ithnin & Hazreen Abdul Majid & Rozmi Ismail & Tin Tin Su & Abdul Rahim Husniyah, 2022. "Exploring the Relationships of Financial Literacy and Financial Behaviour with Health-Related Quality of Life (HRQOL) among the Low-Income Working Population in Malaysia during the COVID-19 Pandemic," IJERPH, MDPI, vol. 19(19), pages 1-15, September.
    4. Adam Ndou & Sam Ngwenya, 2022. "The Influence of Parental Financial Socialization on Young Black African Adults’ Financial Behavior," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 10(4), pages 120-134.
    5. Aubaidillah Doloh, 2023. "The Role of Financial Behavior, Financial Stress, and Financial Well-Being in Explaining Islamic Financial Literacy among University Students ," GATR Journals jfbr211, Global Academy of Training and Research (GATR) Enterprise.
    6. Siddiqi, Umema, 2023. "The Intersection of Financial Literacy, Cognitive Ability, and Numeracy Skills in Pakistani Adults," MPRA Paper 119781, University Library of Munich, Germany.
    7. Yu Zhang & Swarn Chatterjee, 2023. "Financial Well-Being in the United States: The Roles of Financial Literacy and Financial Stress," Sustainability, MDPI, vol. 15(5), pages 1-18, March.

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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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