Income shock and financial well-being in the COVID-19 pandemic: financial resilience and psychological resilience as mediators

Purpose: The purpose of this study was to investigate the relationship between income shock suffered during the coronavirus pandemic and subsequent financial well-being (FWB) of Indian adults, mediated by financial resilience (FR) and psychological resilience (PR). Design/methodology/approach: The authors propose a conceptual model for the relationship between income shock and FWB, with FR and PR as mediator variables. The authors consider four dimensions of financial resilience: economic resources, financial inclusion, financial knowledge and social capital. This study uses a unidimensional scale for PR. Data were collected from 370 respondents from 11 cities across India. Structural equation models were built to test the proposed hypotheses. Findings: Income shock was negatively associated with FWB. Estimated path coefficients for FR and PR were statistically significant and confirmed a mediating role. Among the four dimensions of financial resilience, only economic resources were positively associated with FWB. The mediation relation between economic resources and FWB was larger than PR. Research limitations/implications: Since convenience sampling was used to collect data, the results of this study are indicative but not generalizable. Social implications: For individuals who suffered income shocks during the pandemic, adequate economic resources are crucial for FWB. Governmental disbursements, personal savings and medical or life insurance could provide an adequate safety net. Originality/value: There are no extant studies that examine the association between income shocks and FWB in the pandemic, and this study contributes to the literature. © 2023, Emerald Publishing Limited.

Management of Personal Financial Practices among Scholars: Do They Really Know What They Are Doing and What They Need to Improve during Covid-19?

Purpose: The rising daily expenditure, tough economic conditions and Covid 19 pandemic have made individuals and households more concern of their financial management. The study was carried out to examine major determinates of personal financial managementpracticesamong ICCR sponsored scholars. Design/methodology/approach: The research employed a cross-sectional conclusive research design that included both descriptive and explanatory research. The study used a self-administered questionnaire, and shared the link of Google form to respondents directly through official group social network pages which created and administrated by ICCR Gujarat office. The study employed descriptive statistics and inferential analyses such as correlation between variables and analyzed their effects using multiple regressions. Findings: The result of the study has shown that financial knowledge, financial behavior, financial attitude, financial planning, and financial socialization have positive and significant effect on personal financial management. Covid 19 pandemic has negative impacts on personal financial management practices. Practical implications: The study recommends financial education at a young age in order to acquire knowledge of saving, money management, and investment as early as possible by the new generation. . Training of young minds can help prepare and enable them to face the economic adversities faced by the generation globally. Originality/Value-There has been relatively little theoretically based empirical study on the association between personal financial management and financial practices of scholars in the literature, implying that further empirical research is required

Financial capability and households' financial vulnerability: evidence for the Spanish case

PurposeThe present study examines the potential relationship between financial capability and household financial vulnerability for a sample of Spanish individuals.Design/methodology/approachThe methodology combines a literature review deepening on the two concepts addressed in this paper – financial vulnerability and financial capability – and an empirical analysis. Based on a sample of 7,811 Spanish individuals taken from the Survey of Financial Competences, different probit regression models are used to test the relationship of key independent variables (namely, financial literacy, financial inclusion, and financial capability) with household financial vulnerability.FindingsEmpirical evidence points to the existence of a negative relationship between financial capability and household financial vulnerability. Besides, the variable on financial capability demonstrates, per se, a greater explanatory power than its two components (i.e. objective financial literacy and financial inclusion) separately, particularly in the case of financial literacy.Originality/valueThis paper contributes to the research on household finances along three main dimensions. Firstly, it enhances the research on financial capability by analysing how it relates to consumers' financial vulnerability;an association barely explored by the extant literature. Secondly, it gets closer to the multifaceted concept of financial vulnerability through a wide set of objective and subjective proxy variables. And thirdly, the empirical evidence found leads to proposing some recommendations aimed at improving households' financial capability.

Digital Financial Culture and Inclusion of Emerging Entrepreneurs in a Zonal Market – Peru

The covid-19 brought great difficulties, making it impossible to have resources to cover the basic needs of the family, so the population has had to look for possible alternatives to cope with the situation, such as creating businesses to cover the basic family basket. However, there is uncertainty as to whether these entrepreneurs understand the financial culture to better manage their businesses and at the same time whether they have the digital financial inclusion in their ventures that will allow them to continue in the market. Therefore, the objective of this study is to determine the relationship between financial culture and digital financial inclusion of emerging entrepreneurs in a market. In this research with a quantitative approach, correlational scope and non-experimental design, a survey was applied to a sample of 108 entrepreneurs in a zonal market. The results showed that the financial culture variable and the digital financial inclusion variable have a significant relationship according to Spearman's Rho test. © 2022 Latin American and Caribbean Consortium of Engineering Institutions. All rights reserved.

Drivers of trust in the ECB during the pandemic

Trust in the European Central Bank (ECB) is vital. However, little is known about trust in the ECB during the COVID-19 pandemic. We use the rich pilot microdata from the ECB Consumer Expectations Survey during 2020–2021 on six key euro area countries to shed light on trust in the ECB during the pandemic. Our findings suggest that there is ample room to improve consumers' trust in the ECB. Personal COVID-19 experiences play a role: respondents who reduced the number of hours worked due to COVID-19 have lower trust in the ECB than those with unchanged working hours. Trust in the ECB varies within countries. It is highest among males and people with a good financial situation. It increases with financial knowledge, education, income, and wealth.

Perceived financial well-being as antecedent of psychological well-being: evidence from Brazil: Revista Brasileira de Marketing

Purpose: This study investigates how the relationship between perceived financial well-being and psychological well-being is influenced by income loss in the context of the adverse economic and social conditions resulting from the Covid-19 pandemic. Method: A survey conducted with 959 Brazilian respondents allowed the research hypotheses to be tested by means of multigroup structural equation models. Originality / Relevance: Individuals who reported having experienced larger income losses also reported lower levels of financial and psychological well-being. Among the predictors of psychological well-being we tested, expected future financial security is the most important. Results: Our findings show that after controlling for gender, age, and income, current money management stress and expected future financial security (the present and future dimensions of perceived financial well-being, respectively), but not financial knowledge, are statistically significant to explain psychological well-being. Theoretical / Methodological contributions: The role of financial knowledge to predict financial well-being is weakened in the presence of the psychological variables investigated, which has important implications for financial education efforts. Banks and other financial institutions can create tools to enhance personal awareness and responsibility over one's financial future. Social / Managerial contributions: Managerial and societal implications include the provision of knowledge that may allow financial education programmes, economic empowerment interventions, and public policies aimed at reducing the negative impact of the perceived financial strain on well-being to be better targeted.

The effect of socio-economic status on Digital financial literacy among working women in higher education sector-Kerala state

The demonetization has posed the challenges of moving from the physical cash transactions to digital payments. It was boosted during the period of Covid-19 as the people were shown more interesting in online purchase and online way of payment even in the traditional mode of purchase. This forced the sellers, local vendors to accept payment in digital mode. Moreover the actions taken by the RBI supplements the sellers in encouraging the customers to go for digital payments. The movement towards digital payment apps comes with risks also. The threats of fraudulent activities in the electronic payment system have led to the necessity of effective systems for coherent payment management. The purpose of this research work is to assess the digital financial literacy among working women in higher education sector in Kerala. The information for the study was collected through questionnaire from the teachers. The researchers have chosen teachers as they are the role models and social responsible people by being their personal literate and effectively dealing their personal transactions. The researchers have developed a model based on the information collected through literature review and other primary sources. The data collected was analyzed through the statistical tools like annova, confirmatory factor analysis, multiple regression methods, chi-square. The study concluded that even though most of the teachers are depending on digital payments apps for their financial transactions, many of them were unaware about what to do if their payment through digital apps failed. The basic awareness of digital financial literacy helps a person to make correct financial decisions and also keep away from the fraudulent activities of pirated digital payment apps. 1. Copyright © 2022, Anka Publishers. All rights reserved.

Moderating Role of Personality in Relationship to Financial Attitude, Financial Behaviour, Financial Knowledge and Financial Capability

Advancements in financial system and technology, enlarged individual responsibility for financial decisions, and rapid information expansion, have fundamentally transformed women's need to be functionally literate and financially capable, especially after the COVID-19 pandemic. The personality also has long term implications on financial well-being. The aim of the paper is to study the dominating role of financial attitude, financial awareness & skills, and financial behaviour on financial competence and the moderating role of personality on financial knowledge, financial behaviour, financial attitude, and financial capability. Multi stage stratified random sampling has been used to collect data from 530 urban working women in both the Public and Private sectors, self-employed professionals, and entrepreneurs. Smart-PLS is used by applying Structure Equation Modelling (SEM) to study the moderating role of personality on financial attitude, behaviour, knowledge, and capability. Further the Chi-square test and Tukey test and Kruskal Wallis Test are used to test the hypothesis. The study found that Financial Knowledge of working women with gold personalities influences their financial capability (Beta, 0.578) the most, While, Financial Behaviour is the primary influencer having green (Beta, 0.396) & blue (Beta, 0.638) personalities. Working women having Green Personality are found to be superior with respect to Financial Behaviour, Financial Capability and Financial Knowledge. It is also observed that working women having blue personality characteristics, have comparatively better financial attitude. © 2022 WITPress. All rights reserved.

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

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.

Ensuring financial resilience through financial literacy: A study of higher education students

Purpose: The purpose of this present study is to determine the importance of financial literacy in managing finance at the time of financial emergencies. The financial literacy level of Higher Education Students is studied on the components of financial knowledge, attitude and behaviour in the Pre COVID-19 scenario and highlights the importance of financial literacy in Post COVID-19 scenario. The paper also makes an attempt to study the difference in financial literacy component: financial knowledge, attitude and behaviour by demographic factors and the interdependencies in financial literacy component: financial knowledge, attitude and behaviour. Methodology: The present study considers primary source of data. A total sample of 447 Higher Education Students from different governmental and private institutions of Lucknow Region was chosen to determine the financial literacy level. Weigthed Airthmetic Mean, Independent Samples 't' test, Analysis of Variance (ANOVA) and Correlation statistical tool were used for the study. Findings: The findings of the study reveal that majority of the students were found to be low financial literate and lack financial preparedness for future to tackle financial emergency situations. There is interrelationship found between the financial literacy components: financial knowledge, attitude and behaviour. The finding of the study is significant as it helps to explain how the financial literacy components: financial knowledge, attitude and behaviour influence the financial literacy level among the Higher Education students in Lucknow Region and play a beneficial role in managing finance in the times of financial emergency. Practical Implications: The results clearly show that there is a need of serious policy measures to be taken in the field of financial education especially to tackle the obstacles in the time of financial emergency situation which is prevalent at present in the form COVID-19 as well as financial preparedness in future. © 2023 Contributors and Manakin Press. All rights reserved.

Exploratory study of credit-card indebtedness during the COVID-19 pandemic

The purpose of this research is to study the impact of the current COVID-19 global pandemic on the selected intrinsic and extrinsic factors associated with behaviour personal indebtedness;namely, the changing landscape of credit-card indebtedness. The hypotheses were derived from the literature and focuses on moderating aspects of financial knowledge and responsibility with potential gender bias in purchasing essentials and paying down current debt burden. It was found that financial knowledge was the most powerful factor of the many intrinsic/extrinsic motivational factors explored in predicting essential purchases and debt maintenance. There were some gender differences, but both strongly agreed that such debt would not negatively impact attaining their life’s goals. It appears that younger, lower-income professionals were more conscious about managing their debt than some older, more wealthy individuals. Credit-card rewards have always been a major motivating factor to induce credit-card use. In purchasing basic essentials, credit rewards were not found to be significant as financial knowledge and lifestyle images. Copyright © 2022 Inderscience Enterprises Ltd.

Drivers of trust in the ECB during the pandemic

Trust in the European Central Bank (ECB) is vital. However, little is known about trust in the ECB during the COVID-19 pandemic. We use the rich pilot microdata from the ECB Consumer Expectations Survey during 2020-2021 on six key euro area countries to shed light on trust in the ECB during the pandemic. Our findings suggest that there is ample room to improve consumers' trust in the ECB. Personal COVID-19 experiences play a role: respondents who reduced the number of hours worked due to COVID-19 have lower trust in the ECB than those with unchanged working hours. Trust in the ECB varies within countries. It is highest among males and people with a good financial situation. It increases with financial knowledge, education, income, and wealth.

A Structural Determinants Framework for Financial Well-Being.

This study develops a conceptual framework that provides a broad understanding of financial well-being. Using the 2018 National Financial Capability Study and structural equation modeling methods, this study provides empirical evidence for the proposed framework by identifying significant direct and indirect determinants of financial well-being. Previous personal financial wellness and financial satisfaction-related research provides a theoretical rationale for the construction of the conceptual framework in the current study. The results reported the relationships among these determinants, including financial perceptions and knowledge factors, financial stress, short- and long-term positive financial behavior, and financial satisfaction. The findings indicate that financial satisfaction, short-term financial behavior, perceived financial capability showed positive and direct associations with financial well-being, whereas financial stress and long-term financial behavior were negatively and directly associated with financial well-being. Financial perception and knowledge factors, financial stress, and short-term financial behavior also showed significant indirect relationships with financial well-being. The findings of this study contribute to the literature on financial well-being and provide significant policy and practical implications. Implications for financial practitioners and policy makers are discussed.

Skint: Retirement? Financial Hardship and Retirement Planning Behaviors.

This study used data from the 2018 National Financial Capability Study to investigate the association between financial hardship and retirement planning behaviors. Results from logistic regressions showed that respondents with high difficulty making ends meet were more likely to calculate retirement needs and more likely to own a non-employer sponsored retirement plan. The perceived over-indebtedness was positively associated with owning an employer-sponsored account while negatively associated with owning a non-employer-sponsored account. Financial fragility was associated with a lower likelihood of calculating retirement needs and having a retirement account. The results of additional generational analyses revealed that the difficulty making ends meet and the perceived over-indebtedness showed different patterns with retirement planning behavior across three generations. In contrast, financial fragility showed consistent and negative associations with the retirement planning behaviors across generations.

What, Me Worry? Financial Knowledge Overconfidence and the Perception of Emergency Fund Needs

We examined the association between financial knowledge overconfidence and the perception of emergency fund needs using the 2016 Survey of Consumer Finances (SCF) dataset. Only 28% of respondents reported a perceived amount of emergency funds needed that would cover at least three months of estimated spending. We conducted an OLS regression analysis on the log of the ratio of perceived emergency fund needs to household monthly expenditure. Overconfident respondents perceived a ratio 21.4% lower than those who had objective and subjective financial knowledge above median levels. Overconfident respondents might be underestimating emergency fund needs, suggesting the importance of not only increasing objective financial knowledge but also making consumers aware of the limitations of their financial knowledge.

An empirical analysis on household financial vulnerability in India: exploring the role of financial knowledge, impulsivity and money management skills

Purpose The COVID-19 pandemic has exposed the financial-economic vulnerability of the public and threatened the household financial stability, especially of the low-income group population, in developing economies such as India. The assessment of household financial vulnerability has gained considerable attention these days, especially in poor and developing countries. This article seeks to assess the level of household financial vulnerability in India, based on a household survey conducted across India. Design/methodology/approach This paper has proposed a financial vulnerability index (FVI) based on three self-reported parameters: (1) making end meet, (2) perception of income shock and (3) perception of expenditure shock. Subsequently, the impact of various behavioural and socioeconomic factors on the proposed financial vulnerability index has been assessed using fractional probit regression. Findings The research findings indicate that higher financial knowledge, better money management skills and lower impulsivity in financial behaviour can reduce financial vulnerability. It is suggested that suitable financial literacy programmes be implemented for vulnerable sections of society to enhance their financial knowledge, improve money management skills and manage impulsivity, thereby helping them make informed financial decisions leading to their financial well-being. Originality/value To the best of the authors' knowledge, none of the past studies have developed and assessed the financial vulnerability index in India. This study provides relevant recommendations for various financial sector regulators and government institutions in India.

During COVID-19, impact of subjective and objective financial knowledge and economic insecurity on financial management behavior: Mediating role of financial wellbeing.

The purpose of this research is to look into financial management behavior during the COVID-19. Without a doubt, financial knowledge is an important, but in the COVID-19, the majority of people are experiencing economic insecurity, which is regarded as unique contribution when testing financial management behavior. Furthermore, Pakistan is an Islamic country, so, financial knowledge, is further subdivided into objective, subjective, and Islamic financial knowledge, with financial wellbeing serving as mediating variable. Pakistan has a diverse population of respondents, this model was tested on university students in Pakistan between the ages of 20 and 40, with the majority of respondents experiencing job and food insecurity as a result of COVID-19. The research employs a two-stage method, PLS-SEM, for reliability checking via composite reliability and average variance extract, and discriminant validity checking via HTMT ratio. According to the findings, Islamic financial knowledge as positive, and other financial knowledge as negative, and economic insecurity (food and job insecurity) also has negative and significant impact on students' financial management behavior. Financial well-being significantly acts as a bridge between independents and dependent variables. The findings imply that financial knowledge has a significant impact on financial management behavior. Policymakers and administrators should improve information disclosure while promoting financial education in order to foster trust and responsible financial conduct among people.