Analysing the Predictors of Financial Stress and Financial Well-Being among the Bottom 40 Percent (B40) Households in Malaysia.
Thoughts
Connects with: @mahdzan2019
Annotations
mansor2022 - p. 4
The CFPB’s conceptualisations of financial stress, scarcity, and financial shock are related to the fact that consumers experience emotional and physical hardship due to insufficient money.
mansor2022 - p. 4
Financial knowledge is the understanding of financial concepts and the skills and ability to manage money and make informed financial decisions.
mansor2022 - p. 5
Financial vulnerability is defined as “the likelihood of a person experiencing financial difficulties.”
mansor2022 - p. 5
Consequently, financial hardship is a condition of distress in which a person is unable to sustain their standard and quality of living
mansor2022 - p. 5
The concept of financial vulnerability emphasises future direction (the potential for financial distress) while disregarding current living standards and money management.
mansor2022 - p. 5
Financial vulnerability is generally linked to difficulties in meeting financial obligations and consumption and the risk of default
mansor2022 - p. 5
Jorgensen et al. [61] described financial behaviour in cash management, credit management, capital accumulation, and general management. Poor financial behaviour can result in economic difficulties [62].
mansor2022 - p. 6
he locus of control (LOC) has both an internal and an external dimension. Individuals with an internal locus of control believe that their actions govern future events, whereas those with an external locus of control believe that future events are determined by luck, chance, or fate and are beyond their control [61]. Regarding the financial LOC, individuals with a high internal LOC typically assume that their financial successes or difficulties are a result of their own efforts and work.
mansor2022 - p. 8
The sample’s representativeness has been analyzed, and thus it is possible to assess the generalizability of the results.
mansor2022 - p. 9
All variables were subjected to content validation to ensure that the items were suitable for evaluating the target population’s understanding of financial well-being in the Malaysian context. Therefore, two experts in consumer finance and household financial management and one expert in consumption economics were asked to review and evaluate the items and rate the relevance of each item on a four-point Likert scale. s for the details, Cronbach’s alpha value for financial stress is 0.92, and Cronbach’s alpha values for constructs internal and external LOC are 0.78 and 0.75, respectively. The value of Cronbach’s alpha for financial behaviour was 0.88, financial vulnerability was 0.89, and Cronbach’s alpha for financial well-being was 0.84
mansor2022 - p. 12
An Exploratory Factor Analysis (EFA) with the Kaiser-Meyer-Olkin (KMO) test was used to identify whether the items in this questionnaire were suitable for the factor analysis and to test the sampling adequacy. The result of KMO is 0.894, Bartlett’s Test of Sphericity (20,864.705), degree of freedom (703), and significance (<0.001)
mansor2022 - p. 12
The first factor accounts for 13.162 percent of the total data variances associated with financial vulnerability (income). The second factor is financial vulnerability (debt), which explains 11.597 percent of the total data variances. Meanwhile, the third financial behaviour represents 10.284 percent of the total data variance. The fourth factor, locus of control (luck), explains 7.260 percent of the total data variances. The locus of control (self-confidence) represents 4.025 percent of the total data variances. Finally, financial stress and well-being are 8.151 and 6.138, respectively,
mansor2022 - p. 12
There are eight different constructs assessed for DVL financial behaviour, financial knowledge, financial stress, financial vulnerability (debt), financial vulnerability (income), financial well-being, locus of control (luck), and locus of control (self-confidence)
mansor2022 - p. 21
.