Analysing the Predictors of Financial Stress and Financial Well-Being among the Bottom 40 Percent (B40) Households in Malaysia

Maslina Mansor; Mohamad Fazli Sabri; Mustazar Mansur; Muslimah Ithnin; Amirah Shazana Magli; Abd Rahim Husniyah; Nurul Shahnaz Mahdzan; Mohd Amim Othman; Roza Hazli Zakaria; Nurulhuda Mohd Satar; Hawati Janor

doi:10.3390/ijerph191912490

Analysing the Predictors of Financial Stress and Financial Well-Being among the Bottom 40 Percent (B40) Households in Malaysia

Int J Environ Res Public Health. 2022 Sep 30;19(19):12490. doi: 10.3390/ijerph191912490.

Affiliations

¹ Faculty of Economics & Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia.
² Department of Resource Management & Consumer Studies, Faculty of Human Ecology, Universiti Putra Malaysia, Serdang 43400, Malaysia.
³ Center for Sustainable & Inclusive Development Studies, Faculty of Economics & Management, Universiti Kebangsaan Malaysia, Bangi 43600, Malaysia.
⁴ Corporate Communication Unit, Ministry of Health Malaysia, Putrajaya 62000, Malaysia.
⁵ Department of Finance, Faculty of Business & Economics, Universiti Malaya, Kuala Lumpur 50603, Malaysia.
⁶ Department of Economics & Applied Statistics, Faculty of Business & Economics, Universiti Malaya, Kuala Lumpur 50603, Malaysia.

Abstract

This paper aims to analyse factors affecting financial stress among the Bottom 40 Percent (B40) group of Malaysian households, reflecting overall financial well-being. Data were collected through questionnaires from 1008 respondents across five major regions in Malaysia. The data were analysed using Exploratory Factor Analysis (EFA) and Partial Least Squares-Structural Equation Modelling (PLS-SEM). This study provides evidence that financial behaviour, financial vulnerability (debt and income), and locus of control (luck and self-confidence) significantly affect financial stress among B40 households. The results show a significantly positive relationship between financial stress with financial vulnerability (debt and income) and locus of control (self-confidence). On the contrary, financial behaviour and locus of control (luck) show a significant negative relationship with financial stress. The result also indicates that financial stress affects financial well-being. Overall, the findings indicate that policy-makers should invent more effective and substantial stimulus packages or other measures to reduce the financial burden on B40 households. The findings could eventually provide insights for future research to delve into the social impact of financial stress. This study also has established a valid and reliable instrument to measure financial stress involving B40 households in Malaysia that eventually reflects the financial well-being of this group of people.

Keywords: financial behaviour; financial knowledge; financial stress; financial vulnerability; financial well-being; locus of control.

Publication types

Research Support, Non-U.S. Gov't

MeSH terms

Family Characteristics*
Financial Stress*
Humans
Income
Malaysia
Surveys and Questionnaires

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), research code: LRGS/1/2016/UKM/02/1/4 entitled “Determinants of Financial Well-Being among B40 Households in Malaysia”.