Financial literacy and financial well-being of Australian consumers: a moderated mediation model of impulsivity and financial capability
International Journal of Bank Marketing
ISSN: 0265-2323
Article publication date: 12 July 2021
Issue publication date: 28 October 2021
Abstract
Purpose
This study aims to test a moderated mediation model for a twofold purpose. First, to examine the mediating role of financial capability (FC) in the association between financial literacy (FL) and financial well-being (FW). Second, to analyze if non-impulsive future-oriented behavior (NIB) moderates the associations of FL with FC and FL with FW.
Design/methodology/approach
The authors use the PROCESS macros in IBM SPSS Statistics to test the moderated mediation model and analyze the 2016 wave of the Household, Income and Labor Dynamics in Australia Survey.
Findings
The empirical analysis shows that FC partially mediates the association between FL and FW. Furthermore, the moderated mediation analysis shows that NIB strengthens the associations of FL with FC and FL with FW. Specifically, the positive associations of FL with FC and FL with FW significantly increase for those consumers who score high on NIB.
Practical implications
The findings have implications for the financial services industry. Professional financial planners can positively improve the ability of consumers to deal with their financial matters by highlighting the importance of FL and NIB.
Social implications
The study findings suggest educating consumers to discourage impulsive behavior and encourage them to create financial plans as it will enhance their ability to conduct financial tasks efficiently, improving their FW.
Originality/value
To the authors’ knowledge, this is the first study to assess a moderated mediation model, which examines the role of FC as a mediator variable and NIB as a moderator variable in the association between FL and FW.
Keywords
Acknowledgements
The authors would like to thank the editor(s), the associate editor(s) and three anonymous reviewers for their comments on this paper. The authors believe that the comments received have improved the readability and quality of the paper. In addition, the corresponding author would like to thank his fellow PhD candidates at RMIT University (Melbourne) for reviewing the paper and providing constructive feedback.
This research paper is a part of the project funded by the Think Forward Initiative (TFI). The technical report submitted to the TFI can be viewed here: https://www.thinkforwardinitiative.com/research/addressing-the-challenge-of-problematic-debt-australia-and-eurozone
“This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the author and should not be attributed to either FaHCSIA or the Melbourne Institute.”
Citation
Tahir, M.S., Ahmed, A.D. and Richards, D.W. (2021), "Financial literacy and financial well-being of Australian consumers: a moderated mediation model of impulsivity and financial capability", International Journal of Bank Marketing, Vol. 39 No. 7, pp. 1377-1394. https://doi.org/10.1108/IJBM-09-2020-0490
Publisher
:Emerald Publishing Limited
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