Determinants of financial wellness among Malaysia workers
ABSTRACT The purpose of this study was to examine determinants that influence financial wellness. The results of this study can be used for better understanding on the relationships between and among determinants of financial wellness by highlighting the relationships among demographic characteristics, financial literacy, financial behaviors, financial stress, and financial wellness. Samples were selected using multi-stage sampling technique among employees in public and private sectors. A total of 2000 completed questionnaires were analyzed using path analysis to identify direct and indirect effects on financial wellness. The findings identified that financial wellness were financial behaviors, financial stress level, financial literacy, income, gender, marital status, home ownership, and education had either a direct or indirect effect on financial wellness. Age and ethnicity were found not significantly affect the financial satisfaction.
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ABSTRACT: Examined the relationships between role conflict, role ambiguity, work–family conflict, emotional exhaustion, job satisfaction and propensity to leave, in a sales environment. Results of surveys completed by 104 salespeople employed by a regional media firm indicated that: 1) role conflict was significantly related to emotional exhaustion; 2) work–family conflict was significantly related to emotional exhaustion and job satisfaction; and 3) emotional exhaustion and job satisfaction were related to salesperson propensity to leave. These results support other research indicating the conflict between the work and home domains is highly related to important workplace attitudes and perceptions and suggests that work–family conflict should be included in models examining employee response to the effects of stress. (PsycINFO Database Record (c) 2012 APA, all rights reserved)Journal of Personal Selling and Sales Management 10/2013;
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ABSTRACT: This study examines the relationship of financial stress to personal and work stress and its negative impact on personal and work satisfaction. A survey of 187 professional mental health staff working in behavioral hospitals determined that financial stress scores from personal and work areas explained 50% of the variance in their overall stress. Financial stress scores also explained 30% of the negative variance in personal and work satisfaction. This study indicates as much as 50% of overall stress could be reduced by improved financial management, thus contributing significantly to their personal and work satisfaction which counter-balances stress which lowers productivity.01/1998; 2.
African Journal of Business Management Vol. 5(24), pp. 10092-10100, 14 October, 2011
Available online at http://www.academicjournals.org/AJBM
ISSN 1993-8233 ©2011 Academic Journals
Full Length Research Paper
Determinants of financial wellness among Malaysia
Narges Delafrooz1 and Laily Hj Paim2*
1Department of Business Management (Rasht Branch), Islamic Azad University, Rasht, Guilan, Iran.
2Department of Resource Management and Consumer Studies, Faculty of Human Ecology, University Putra Malaysia,
Accepted 17 May, 2011
The purpose of this study was to examine determinants that influence financial wellness. The results of
this study can be used for better understanding on the relationships between and among determinants
of financial wellness by highlighting the relationships among demographic characteristics, financial
literacy, financial behaviors, financial stress, and financial wellness. Samples were selected using
multi-stage sampling technique among employees in public and private sectors. A total of 2000
completed questionnaires were analyzed using path analysis to identify direct and indirect effects on
financial wellness. The findings identified that financial wellness were financial behaviors, financial
stress level, financial literacy, income, gender, marital status, home ownership, and education had
either a direct or indirect effect on financial wellness. Age and ethnicity were found not significantly
affect the financial satisfaction.
Key words: Financial stress, financial problem, financial wellness, Malaysia workers.
Financial wellness is a key component to financial health.
As the prominence of individuals’ financial health
continues to grow, people often use the term financial
wellness to describe the level of a person’s financial
health. Financial satisfaction does not necessarily mean
good financial health. Sometimes, people can be satisfied
with their financial status, even though they have large
debts. This is why an objective assessment of a person’s
financial situation is an important component of personal
financial wellness. In addition to subjective financial
satisfaction and objective measures, individual attitude
and financial behaviors are also important components
because they measure the potential of change in
personal financial wellness (O’Neill, 1995; Joo, 1998; Joo
and Garman, 1998).
Personal finance wellness in Malaysia has become an
important issue today. Financial problems are not just the
concerns of the poor. The decline of employment
*Corresponding author. E-mail: firstname.lastname@example.org.
Tel: 0060192412739. Fax: 0060 89467051.
opportunities, income instability and eroded purchasing
power of Malaysia households are important issues
facing families, policy markers and educators. In the
following years, households will be more concerned
about their financial matters. Consumer debt is increasing
faster than inflation. Consumer financing has expanded
considerably from 2000 onwards; the average annual
growth rate for the period 2001 to 2007 was 14.8%. After
six years of rapid growth, household debt grew at a more
moderate pace of 7.9% in 2007 (Endut and Hua, 2009).
At the end of 2007, household credit accounted for 56%
of the total outstanding bank loans. Overuse of credit,
overspending, lack of budgeting, too many debts,
inadequate shopping and spending skills, low salary and
lack of knowledge about money are the main factors for
employees’ financial troubles (Garman et al., 1989).
Financial problems have implications on a person’s
daily life functions, such as work and family. They also
cause personal stress and often precipitate marital crisis.
Moreover, there is a significant relationship between
financial problems and
(Sporakowski, 1979). Financial stress influences various
aspects of individual life functions, including workplace
productivity. Having problems can lead to damage in
workplace morale and diminish productivity (Garret,
1993). Therefore, financial problems and financial stress
affect not only an individual’s personal and family life, but
also the person’s work life. One of the reasons for per-
sonal financial problems is financial illiteracy. Financial
literacy will enhance the ability to handle day to day
financial matters and will reduce the negative conse-
quences of poor financial decisions that otherwise might
take years to overcome. As stated by Braunstein and
Welch (2002) and Perry (2008), many, if not most consu-
mers, lack the financial literacy needed to make important
financial decisions for their own best interests. Experts
also generally agree that financial knowledge appears to
be directly correlated with financial behavior (Hilgert et
al., 2003). Moreover, poor financial behaviors and
personal and family money management practices have
consequential, detrimental and negative impacts on one’s
life at home and work (Garman et al., 1996).
However, relatively little theoretically based empirical
research on the relationship between personal financial
problems and financial wellness concerns have appeared
in literature, suggesting a need for more empirical re-
search. Numerous researchers have attempted to explain
and predict personal financial wellness within the context
of consumer and family economics (Hayhoe, 1990; Poter
and Garman, 1993; Strumpel, 1976; Wilhelm and Varcoe,
1991). Researchers and educators have argued that a
conceptual model for the determinants of financial
wellness is significant. Thus, this study is carried out to
examine the direct and indirect determinants of financial
wellness and how personal financial wellness affect
The study of financial wellness is a relatively new. The
term “financial wellness” had been developed within the
past decade. Prior to the mid-1990s, numerous resear-
chers attempted to explain, predict, or define related
constructs such as financial well-being, financial satis-
faction, and economic well-being. These terms tend to be
used interchangeably with financial wellness. Economic
well-being and financial well-being can be proxies of
financial wellness. Hayhoe (1990) observed that econo-
mic well-being can be looked at from a simple individual’s
perception of satisfaction with one’s material or financial
situation to a complicated perception of both the material
and nonmaterial aspects of an individual’s financial situa-
tion. The complicated perception comprise of happiness
of income and savings, awareness of opportunities,
ability to make ends meet, sense of material security, and
sense of fairness of the reward distribution system
(Strumpel, 1976). Joo and Garman (1998) illustrated
Delafrooz and Paim 10093
personal financial wellness as a comprehensive concept
comprising financial satisfaction, objective status of
financial situation, financial perception, and behavior that
cannot be assessed through one measure. Fergusson et
al. (1981) described economic well-being through the
level of financial inputs, such as income and assets.
Moreover, as a result of Williams’s study (1993),
economic well-being as comprised of money income, real
or full income, agreement about distribution, and psychic
income or perceived adequacy of income.
Numerous researchers have sought to develop con-
ceptual model for the determinants of financial wellness
using diverse research methods (Hayhoe, 1990; Joo,
1998; Porter and Garman, 1993; Wilhelm and Varcoe,
1991; Williams, 1993). However, determinants for per-
sonal financial wellness is complicated in nature, which
comprised objective and subjective statuses of financial
situation behavioral assessment of personal finance, and
satisfaction with personal financial situation that cannot
be assessed through a single measure (Joo, 1998). Joo
also suggested a higher level of financial well-being
correlated with higher performance ratings, less
absenteeism, and less work time loss.
In summary, financial wellness can be conceptualized
as a level of financial health. It includes satisfaction with
material and non-material aspects of one’s financial situa-
tion, perception (or subjective assessment) of financial
stability including adequacy of financial resources, and
the objective amount of material and non-material
financial resources that each individual possesses.
Determinants of financial wellness
A number of factors have been found to influence
financial wellness. Among the most common factors are
demographic characteristics, such as gender, marital
status, education, ethnicity, age, income, and home
ownership (Joo, 1998; O’Neill, 1995; Porter and Garman,
1993). For example, it has been confirmed that financial
wellbeing is positively related to income, education, and
Researchers have argued that financial attitudes and
knowledge play an important role in determining a per-
son’s financial wellness (Joo, 1998; Porter and Garman,
1993). Garble and Lytton (2001) and Sung and Hanna
(1996) concluded that there appears to be a common
psychological profile among individuals with more
financial knowledge that allows them to make different
financial decisions, which often lead to greater attained
levels of financial wellness.
While the literature suggests that demographics, finan-
cial behaviors, financial knowledge, and financial stress
level have impacts on financial wellness, results from
previous studies have not been consistent with their
findings. Much of past inconsistency appears to be the
result of misspecification of measurements and the
10094 Afr. J. Bus. Manage.
Figure 1. The determinants of financial wellness.
assumption that each determinant factor has a direct
influence on financial wellness (Porter and Garman,
1993). This assumption may, in fact, be incorrect. Joo
(1998) suggested that in many cases, demographics and
financial behaviors have an indirect effect on financial
wellness, which has not been tested in previous studies.
Financial wellness is a function of demographic charac-
teristics, financial behavior, and financial knowledge and
financial stress. It is reasonable to hypothesize that
demographic characteristics such as age, education,
income, ethnicity, home ownership, number of financial
dependents, marital status, and gender have a direct
effect on financial wellness. Financial knowledge, finan-
cial behavior, and level of financial stress also have direct
effects on financial wellness. In addition, demographic
variables, financial knowledge, and financial behavior
have an indirect effect
Furthermore, financial stress can be affected by financial
According to Ross and Huber (1985), demographic
characteristics can have an impact on financial wellness.
Income, education, and age were positively related and
number of young children in the household was a
negative related to financial wellness. Similarly, certain
demographic variables such as the number of financial
dependents, marital status, and income, can also have
an impact on financial stress.
Advanced financial literacy also matters for financial
decision-making. It has also become a basic living skill
for individuals to survive in today’s society. Research has
found that financial knowledge is related to financial
behaviors (Hira et al., 1992; Mugenda et al., 1990;
Princeton Survey Research Associates, 1997). Lusardi
on financial wellness.
variables, and financial
and Mitchell (2007) assessed the impact of financial
literacy on financial behavior. Hilgerth et al. (2003) also
documented a positive link between financial literacy and
financial behavior. As a result by prior study, financial
mistakes are most prevalent among the younger people
who are displaying the lowest amount of financial literacy
(Agarwal et al., 2007).
According to Bailey et al. (1998), they indicated that
financial stress level is negatively related to financial
satisfaction. For example, in a study among health care
professionals (Bailey et al., 1998), it was revealed that
financial stress explained 30% of the variance in partici-
pant financial wellness scores. Prior studies indicated
that financial stress affect overall personal satisfaction as
well as work satisfaction (Kantak et al., 1992; Boles et al.,
Demographic characteristics and financial literacy can
have impacts on financial behaviors. The literature also
indicates that possible relationships exist between demo-
graphic characteristics and financial behavior. Individuals
who have low incomes, less education and less financial
knowledge are more likely to make different financial
decisions than others, resulting in varying behaviors and
financial outcomes. These relationships are shown in the
proposed framework (Figure 1).
The proposed framework incorporates all of the direct
effects from demographic and socioeconomic charac-
teristics, financial knowledge, financial behaviors, and
financial stress levels on financial wellness. All of the
possible indirect effects from these variables are also
shown. As suggested above, it is hoped that the determi-
nants of financial wellness can be more fully understood
by taking into account these direct and indirect effects.
Samples of the study comprise of employees in public and private
sectors. According to Labour Force Survey Report (2009), in 2008,
Delafrooz and Paim 10095
Table 1. Descriptive statistics of financial wellness items.
Your satisfaction level towards your overall financial situations.
Your concerns towards your financial situation.
How good is your financial condition?
Do you have enough with your current financial situation?
How comfortable are you towards your financial situation?
How confident are you towards your retirement saving?
How often do you finish your earnings before receiving a new income?
How often do you face problems with bills (electronic, Telephone, insurance payment, credit cards)?
How confident are you in controlling your personal financial?
Your confidence that you can control your finance.
How feasible for you to have emergency earning of RM 1000 (USD 305)?
Your concern on your overall financial performance.
the labor force was 11,170,800 and employed people were
10,819,800. A total of 2246 respondents, in which 1122 were from
public sectors while 1124 were from private sectors, participated in
the study. Samples were selected using multistage sampling
The data were collected using self-administered questionnaire
which were distributed through human resource personnel of
selected agencies. Instrument for the study was adopted from an
instrument developed by Joo and Garman in 1998. Data was coded
and analyzed using SPSS. After careful selection, a total of 2000
questionnaires were analyzed using path analysis method to
identify direct and indirect determinants of financial wellness. Three
regression equations were initially used in the path analysis. The
first analysis used financial satisfaction as the dependent variable
and all other variables as independent variables. The second
equation used financial stress level as the dependent variable, and
financial behaviors, financial knowledge, and demographic charac-
teristics as independent variables. The third equation used financial
behaviors as the dependent variable, with financial knowledge, and
demographic characteristics as the independent variables.
Respondents’ financial wellness was measured with 10-point Likert-
type question (Table 1). Twelve questions on financial wellness
were asked concerning overall satisfaction with the financial
situation, ability to meet living expenses, financial management,
and savings for retirement, financial adequacy, and current financial
satisfaction. A financial wellness score was computed by summing
the average scores for all twelve statements. Those who were not
satisfied, ended up towards the lower scores, while those who were
more satisfied ended up towards the higher scores.
Demographic and socioeconomic variables were collected
comprising of age, income, and a number of financial dependents
were measured as continuous variables. In the analyses, gender,
marital status, ethnicity, home ownership, and education were
dummy coded. Respondents were coded 1 if the respondent was
female, married, Malay, or a homeowner. Two dummy coded varia-
bles were created to represent attained educational levels. Those
respondents who had more than a high school education, but less
than a college degree (that is, bachelor’s degree) were coded 1,
otherwise 0. Respondents were coded 1 if they indicated having
received a bachelor’s degree or higher, otherwise 0; high school
graduates were used as the reference group.
Financial literacy was measured with “True” or “False” choices on
16 questions concerning time value for money, financial records,
credit, savings, investment, insurance, retirement, wills, and general
knowledge on personal finance (Table 2).
The overall level of respondents’ financial stress was measured
with a 3-point Likert-type question (never, seldom and always). Nine
questions on financial stress asked include items related to worry
over delay in payment, bill payment, financial condition, medical
cost, ability to provide food and care for sickness, stress and
suffering depression over financial condition (Table 3).
Respondents’ financial behavior was examined using ten 4-point
Likert-type questions, ranging from 1 (never) and 4 (always) (Table
4). The index was found to offer an adequate level of internal
consistency (Cronbach’s alpha = 0.82). The mean financial beha-
vior score for respondents was 27.2, indicating that the average
respondents managed both positive and negative behaviors over
the previous year.
Demographic characteristics of the respondents
Of the 2000 employees analyzed in the survey, 50.0%
were male and 50.0% were female. Majority of the
respondents were Malay (93.0%). The mean age was 32
years old with a standard deviation of 8.9 years. Majority
of the respondents had their own house (40.0%). The
mean monthly income of the respondents was MYR
10096 Afr. J. Bus. Manage.
Table 2. Descriptive statistics of financial literacy items.
Buying merchandize on credits would reduce purchasing power in the future.
Increasing in price would reduce purchasing power.
The balance sheet reflects the financial position.
Owners of credit cards can purchase without limits.
I tend to spend more when we save in buying every need.
The savings is doubled its value after ten years.
Saving is the remaining of the income after it has been deducted from expenses.
The interest influences the saving value in the future to come.
Income survey describes both the income and expense at certain date.
Inheritance is not needed for family.
Buying insurance is the best from of investment.
Saving account is better than fixed deposit account.
Life insurance protects the insurance holder from financial burdens.
All type of investment always yields profit.
I can take a loan for investment.
A family should have an emergency saving of at least 3 months of the family income.
Questions were measured by testing for correct answers.
Table 3. Descriptive statistics financial stress items.
Delay in payment always make me worry
I cannot sleep because of worrying over bill payments
The current financial conditions make me more restless and moody
I am not able to support myself financially in time of sickness
I am not able to support myself financially in eating a better food
I have high blood pressure because of stress
I worry over the medical cost
I am suffering depression and it increases my weight
Stress make me sick easily
2,400.00 (US$ 727.00). The average score for financial
wellness was 73.7. Generally, more than half of the
respondents had a higher level of financial wellness
(mean score more than 73.7).
Financial wellness and related variables
About 47.2% reported high levels of financial wellness
(scale 7, 8, 9, and 10). Over one-third of the respondents
(39.9%) reported average financial wellness (scale 5 and
6), while the remainder (12.9%) reported low levels of
financial wellness (less that scale 5). In terms of financial
behavior, total scores ranged from a minimum of one to a
maximum of twenty four. The average score was 14.1,
with standard deviation of 4.7. This indicated that most of
the respondents had a moderate level of financial
behaviors. With respect to the financial literacy, possible
total scores ranged from 0 to 11. The average score was
6.9, with standard deviation of 1.92. This implied that
Mean (1, never; 3, always)
majority of the respondents had a moderate level of
financial literacy. Finally, the average score for financial
stress was 11.62, which ranged from 8 to 27, with
standard deviation of 2.9. Generally, more than half of the
respondents had a low level of financial stress.
Factors related to financial wellness
Results from the path analysis are presented in Figure 2.
Numerous direct, indirect, and total effects were found.
Details findings related to (a) direct effects on financial
wellness, financial stress, and financial behaviors; (b)
indirect effects on financial wellness; and (c) important
total effects on financial wellness were discussed.
Financial wellness: Results from the path analysis
Delafrooz and Paim 10097
Table 4. Financial behavior measure items and descriptive statistics.
Pay the bill timely
Update the account book at the bank every month
Use credit card to purchase food
Clear all the outstanding credit every month
Check the details of the credit report
Make comparison prior asking for loans or using credit cards
Discuss with spouse on financial issues
Involve children into the financial discussions
Mean (1, never; 3, always)
Figure 2. Path analysis results of the determinants of financial wellness.**only significant
coefficients are presented in this figure; Education = above high school; Marital status = Married;
Homeowner = Ownership; Ethnicity = Malay; Gender = Female.
indicated that education, financial literacy, financial
behaviors, and financial stress level had a direct effect on
financial wellness. Particularly, higher levels of financial
literacy resulted in better financial behaviors and low level
of financial stress led to higher levels of financial
The positive relationships between financial behaviors
and financial wellness support previous research findings
(Mugenda et al., 1990). Financial behaviors were found
to have a direct relationship with financial wellness; those
who practiced better financial behaviors tended to have
higher levels of financial wellness. This finding supports
an assertion made by O’Neill (2000) who indicated that if
consumers receive basic personal finance education,
they may be in a better position to manage their financial
behaviors, resulting in improved financial wellness.
Financial stress was also shown to have a negative
indirect effect on financial wellness. This was interpreted
10098 Afr. J. Bus. Manage.
Table 5. Direct, indirect, and total effects of the independent variables on financial wellness.
Variable Direct effects
Marital status 0
Financial literacy 0
Financial stress -0.52
Financial behavior 0.20
as the higher the financial stress level experienced by a
respondent, the lower the financial wellness level is.
Some demographic and socioeconomic factors such as
home ownership and income were shown to have direct
effects on financial wellness. The positive coefficient from
income was interpreted to mean that those who had a
higher income tended to be more satisfied with their
financial situation than those who had low income. Home
owners’ financial wellness levels were higher than those
reported by renters. The findings indicated that there are
no direct effects of gender, age, ethnicity, marital status,
education, length of employment, or financial literacy on
Financial stress: Findings indicated that financial stress
level is related to financial behaviors, education, and
income. The negative coefficient of financial behavior
was interpreted as those who exhibited better financial
behaviors reported lower levels of financial stress.
Education had a negative direct effect on financial stress
indicating that those who had a higher level of education
(high school education) reported lower levels of financial
stress than those who had a lower level of education. As
expected, those who had a higher income reported lower
level of financial stress.
Financial behaviors: Financial behaviors were related
to education, homeowner, income, marital, and financial
literacy. Education, income, and financial literacy were
shown to have a positive relationship with individual’s
financial behaviors. Those who had an education beyond
high school had higher financial behavioral scores than
educational group with less than a high school. Those
who had a greater level of household income tended to
exhibit better behaviors than other income groups.
Female reported better financial behavior than those
reported by male. Besides, individuals who were married
may be in a better position to manage their financial
behaviors than those were not married. Finally, financial
literacy had a positive effect on financial behaviors,
indicating that those who were more knowledgeable
about investing and financial issues tended to exhibit
better financial behaviors.
Indirect effects on financial wellness
The path analysis indicated indirect effects to education,
home ownership, income, age, gender, financial literacy,
and financial behaviors on financial wellness. On the
other hand, no indirect effects of age and ethnicity on
financial wellness found. Education had a positive indirect
effect on financial wellness indicating that those who had
a higher level of education (higher than high school)
tended to be more satisfied with their financial situation
than those who had a lower level of education.
Home owners also had a positive effect, suggesting
that homeowners tended to be more satisfied with their
financial situation than other groups of ownership.
Income had a relatively large positive indirect effect on
financial satisfaction, indicating that those with higher
incomes tended to be more satisfied with their financial
Financial behaviors also had indirect positive effect on
financial wellness. The indirect effects from financial
literacy to financial wellness were positive; however, the
effects were weak.
The summary of direct, indirect, and total effects is
presented in Table 5. As shown in Table 4, the strong
relationship between respondents’ financial stress level
and financial wellness was the anticipated outcome of
this research. It was determined that those who
experienced higher levels of self-reported financial stress
tended to be less satisfied with their personal financial
situation as compared others. The second most dominant
determinant of financial wellness was a person’s financial
This finding has important implications for those
interested in improving the financial wellness of indivi-
duals. For instance, consumer educators and financial
practitioners are in an ideal position to increase the
financial satisfaction of individuals by working to increase
individual’s level of financial behavior Individual financial
practices (cash management, credit management, bud-
geting, financial planning, and general money manage-
ment) had the largest impact on an individual’s financial
satisfaction level. This finding suggests that those who
practice desirable financial behaviors tend to be more
satisfied with their personal financial situation. This, in
turn, indicates that if educators, researchers, and practi-
tioners can work to improve a person’s financial stress
level, this will likely lead to higher levels of financial
The next most significant factor affecting financial
wellness was income. Those who had higher level of
income tended to be more satisfied with their financial
situation. Besides, home ownership was shown to have
positive effects on financial wellness. Surprisingly,
financial literacy was not shown to have a direct effect in
explaining financial wellness. In other words, financial
literacy, by itself, does not appear to be a powerful deter-
minant of financial wellness as compared to financial
behaviors and stress. Financial literacy only becomes a
significant determinant of financial literacy when indirect
effects are accounted for through other significant
It was also determined that gender, marital status and
education had a weak but significant relationship with
financial wellness. Prior studies proved that gender, mari-
tal status, and education are related to personal financial
wellness (O’Neill, 1995; Porter, 1990; Ross and Huber,
CONCLUSIONS AND IMPLICATIONS
This research used path analysis to reveal an exploratory
framework of the determinants of financial wellness.
Based on a combination of research findings from pre-
vious financial wellness literature, and also the theoretical
relationships observed empirically, this exploratory frame-
work provides further insight into the factors determining
financial wellness. However, these findings are limited by
the nature of the sample and the exploratory nature of the
The framework presented here identified direct effects
and indirect effects on personal financial wellness. Deter-
minants that had either a direct or indirect effect on
financial wellness were financial behaviors, financial
stress level, financial literacy, income, gender, marital
status, home ownership, and education. Age and ethni-
city were found not significantly affect the financial
Consumer and family economists can use the findings
from this exploratory study, especially the empirically
tested exploratory framework in Figure 2, as a guide to
increase the financial wellness of their constituencies. For
example, the data indicated that a person’s financial
wellness can be increased by reducing financial stress
Delafrooz and Paim 10099
levels, improving individual financial behaviors, and
increasing levels of financial literacy.
Consumer educators and financial practitioners can
help consumers increase their financial satisfaction by
changing their financial behaviors. For example, more
than 30% of the respondents in this study never or
seldom pay the bill timely, and more than 70% of the
respondents never or seldom update their bank account
monthly. Also, more than 40% of the respondents never
or seldom use credit card to purchase food. Thus finan-
cial behavioral suggest the need for remedial personal
financial education such education might include
discussions and practice in basic financial skills such as
budgeting, spending, credit usage, savings, and
consumer decision making.
Evidence from this study indicates that the majority of
individuals with medium levels of consumer financial
wellness have consequential, detrimental, and negative
impacts on one’s life at home and work (Garman et al.,
1996). One obvious solution to this situation focuses on
behavioral education in order to assists employees to
better manage their personal finances and improve their
financial well-being (O’Neill et al., 2000; Kim, 2001;
O’Neill et al., 2005). Therefore, financial education at
workplace needs efforts to equipped employee with
appropriate knowledge and skills in financial manage-
ment and ultimately, to increase financial wellness.
The research findings of this study specifically revealed
that individuals who exhibit better financial behaviors tend
to have lower financial stress, and therefore, higher
financial satisfaction. Financial counselors and planners
can acquire useful information through this research.
Workers have financial problems in budgeting, financial
planning, retirement planning, savings, cash manage-
ment, and credit management. Financial counselors and
planners can realize what kind of stressful life events
their clients experience. Therefore they may wish to de-
velop educational programs and/or counseling sessions
in financial stress management. Thus, it is reasonable to
assume that financial education can have a positive
impact on the improvement of financial behaviors, which
in turn will reduce financial stress and increase financial
It was also determined that some demographic charac-
teristics influence financial wellness directly or indirectly.
This finding is different from previous studies, which
suggest that demographic factors have a direct effect on
financial satisfaction. Results from this study suggest that
income and homeownership had positive and greatest
effects on financial wellness directly and indirectly. This
finding is significantly agreeable with results presented in
previous studies that suggest that household income and
housing tenure also have positive impacts on personal
financial wellness (Joo, 1998; Ross and Huber, 1985).
Those who have higher household incomes and are
homeowners tend to demonstrate a higher level of
financial wellness than others (Joo, 1998).
10100 Afr. J. Bus. Manage.
Financial education is the single best method available
to be used by consumer sciences researchers, practi-
tioners, educators, and policy makers when taking
intervening steps to improve the financial wellness and
hence overall job productivity of individuals and families
(see also Joo and Grable, 2000).
Findings from this research have important implication
with respect to the need of workplace financial education.
More comprehensive research, investigating broader
population and various workplaces is needed to gene-
ralize the results of this study. Further research could
focus on other components of financial matter such as
saving behavior, financial problem and productivity and
determine which are the most and least critical to
financial success and sustainability.
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