Determinants Of Financial Well-being Among Adults

Background of the Study: The concept of financial well-being is considered an important topic in the field of personal financial management.However,only a few scholars have studied the factors affecting the individual's financial well-being.By applying the theory of financial socialization and theory of life span development,the present study tried to identify the factors that affect adults' financial well-being.Variables: Based on the recent literature,the financial socialization through parents,peers,and teachers,and early childhood consumer experiences can affect financial well-being.Furthermore,in the present study,the mediating effect of controlled financial behaviors is also studied.Design/Methodology: The present study was cross-sectional.The study considered young adults of Pakistan having age less than 40 years as a population.The unit of analysis was individuals.For the collection of the data,the researchers used validated research instruments.By using a convenient sampling technique,the researchers collected data from 1500 respondents.However,there were only 1130 usable responses.The researcher applied mediation analysis through Smartpls software.In the present study,the researchers applied the methodology proposed(Hair et al.,2017).Results of model 1 showed that financial socialization through peers and early childhood consumer experiences directly affects adults' financial well-being.However,the effect of peers was in the opposite direction.The mediation analysis showed that locus of control mediates the relationship between financial socialization through parents,teachers,and financial wellbeing.The results of Model 2 also confirmed the results of the earlier two models.The results confirmed that financial socialization through peers has a negative effect on the individuals' financial well-being.Additionally,early childhood experiences also affect the financial wellbeing of adults.The results also confirmed the mediating role of financial self-efficacy in explaining the relationship between financial socialization through parents,peers,and financial well-being.Results of Model 3 showed that early childhood consumer experiences and financial socialization through peers affect the adults' financial well-being in Pakistan.The results also confirmed the mediating role of financial coping behaviors in explaining the relationship between financial socialization through the parents,teachers,and financial well-being.Implications: The present study proposed some important implications for the parents,teachers,and policymakers.The researchers argued that there should be some mechanisms to improve financial literacy among parents.Parents should allow their children to practice financial management skills in managing their pocket money.Policymakers should work to provide saving and investing mechanisms for young children to help adults achieve financial well-being in their adulthood.