FINANCIAL LITERACY AND FINANCIAL WELL-BEING: THE MEDIATING ROLE OF FINANCIAL ANXIETY AMONG BUSINESS GRADUATES

Abstract

Financial well-being among university graduates has become a major concern due to certain economic factors. This study investigates how financial literacy relates to financial well-being; while also looking at how financial anxiety of graduates might act as a mediator. Financial literacy and financial well-being represent one’s capacity to manage finances and the ability to maintain and feel satisfied with the state of finances. Financial anxiety represents stress and worries one might feel regarding the state of one’s finances. The study also considers the fact that financial anxiety might contribute to financial well-being and that students with financial literacy might also have less financial anxiety. This study employs a cross-sectional survey with a sample of 340 graduates using a convenience sampling technique. SPSS and structural equation modeling were used to evaluate the data. Financial literacy positively impacts financial well-being, whereas financial anxiety negatively impacts financial well-being. The study also found that financial literacy and financial anxiety are positively related. This study attempts to build upon the existing financial behavior literature with a focus on the psychology of financial literacy. This study offers universities, policymakers, and financial institutions an opportunity to reduce graduates’ financial anxiety by increasing students’ financial literacy and student financial well-being.