An enigma of Malaysia's low-income young adults: Mediation of financial behaviour on financial well-being and locus of control cohesion

Mohamad Fazli Sabri; Rozita Wahab; Nurul Shahnaz Mahdzan; Amirah Shazana Magli; Husniyah Abd Rahim; Siti Shazwani Ahmad Suhaimi; Nur Shuhamin Nazuri

doi:10.1371/journal.pone.0288204

An enigma of Malaysia's low-income young adults: Mediation of financial behaviour on financial well-being and locus of control cohesion

PLoS One. 2023 Jul 13;18(7):e0288204. doi: 10.1371/journal.pone.0288204. eCollection 2023.

Authors

Mohamad Fazli Sabri^{1

2}, Rozita Wahab^{1

2}, Nurul Shahnaz Mahdzan³, Amirah Shazana Magli^{1

2}, Husniyah Abd Rahim^{1

2}, Siti Shazwani Ahmad Suhaimi^{1

2}, Nur Shuhamin Nazuri^{1

2}

Affiliations

¹ Faculty of Human Ecology, Universiti Putra Malaysia, Serdang, Malaysia.
² Malaysia Universiti Putra Malaysia, Serdang, Malaysia.
³ Faculty of Business and Economics, Department of Finance, University of Malaya, Kuala Lumpur, Malaysia.

Abstract

Young adults face many significant challenges to their financial well-being. The rising cost of living and unstable economies have impacted how they consume, manage, and save monthly income to maintain their standard of living. Hence, exploring the financial well-being of young adults in Malaysia is an intriguing and relevant research topic that deserves examination from multiple perspectives. This study aims to investigate how these three factors, namely financial knowledge and locus of control with financial behaviour as a mediator, are correlated with the financial well-being of low-income young adults in Malaysia. A total of 520 young adults from North, Central, South, East zones in Peninsular Malaysia and East Malaysia were randomly chosen using a multi-stage sampling technique as the sample of this study. Data in this study were obtained using a set of questionnaire-based survey through cross-sectional study and then scrutinized using IBM SPSS (Statistical Package of Social Science). This study discovered that financial knowledge, internal and external locus of control, and financial behaviour were significantly correlated with the financial well-being of low-income young adults. The findings also demonstrate that financial behaviour mediates the correlation between financial knowledge, both internal and external locus of control, and financial well-being. This study is one of the very few important studies that explore the link between financial literacy, locus of control, financial behaviour, and financial well-being among low-income young adults. This study also found an interesting and noteworthy fact regarding the impact of the minimum monthly wage policy on highly educated young adults in Malaysia, which is worth discussing and needs to be alerted to the policymakers and leaders of the country. Therefore, the findings of this study can be utilized as a starting point by policymakers, government organizations, and non-governmental organizations to create new initiatives aimed at raising financial well-being among the younger generation.

Copyright: © 2023 Sabri et al. This is an open access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

MeSH terms

Cross-Sectional Studies
Humans
Income
Internal-External Control*
Malaysia
Poverty*
Young Adult

Grants and funding

This research was funded by the Ministry of Higher Education Malaysia under Long Term Research Grant Scheme – Malaysia Research University Network (LRGS – MRUN), re-search code: LRGS/1/2016/UKM/02/1/4 entitled “Determinants of Financial Well-Being among B40 Households in Malaysia. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.