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

• Published in: Future business journal Vol. 7; no. 1; pp. 1 - 18
• Main Authors: Rahman, Mahfuzur, Isa, Che Ruhana, Masud, Muhammad Mehedi, Sarker, Moniruzzaman, Chowdhury, Nazreen T.
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer Berlin Heidelberg 01.11.2021; Springer Nature B.V; SpringerOpen
• Subjects: Business and Management; Cost control; Cost of living; Debt management; Decision making; Economic development; Expenditures; Financial behaviour; Financial literacy; Financial management; Financial stress; Financial well-being; GDP; Gross Domestic Product; Low income groups; Malaysian B40 income group; Pandemics; Quality standards; Society; Standard of living; Malaysia; Financial literacy; Financial stress; Malaysian B40 income group; Financial well-being; Financial behaviour
• ISSN: 2314-7210; 2314-7202; 2314-7210
• DOI: 10.1186/s43093-021-00099-0

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.