ISSN: 2222-6990
Open access
The rising costs of raw materials and logistics, as well as the persistent unpredictability surrounding pandemic, continue to constitute a substantial threat to the Malaysian economy. The uncertain nature of the labour market results in job loss, leaving individuals financially vulnerable. According to data from the Department of Insolvency, more than 50% of bankruptcies in Malaysia involved young adults. Therefore, this study was carried out among young adults in Malaysia to identify the predictors of financial vulnerability, through financial socialization and locus of control with the moderation of education level. Multi-stage sampling and self-administrative survey were employed to choose respondents from public sectors and private sectors. 1002 data were collected and the researcher employed the Structural Equation Modeling using Partial Least Square (PLS-SEM) to take into account the relationships between multiple variables. The result generated from the current study shows a significant relationship between Financial Socialization as well as Locus of Control towards Financial Behaviour. Through the analysis, there is also an evidence of Financial Behaviour significantly associated with Financial Vulnerability. In conclusion, the findings provide insight and make aware the young individuals in Malaysia to possess healthy financial behaviour to practice equitable financial management and avoid being vulnerable.
Abdullah, N., Sabri, M. F., & Arif, A. M. M. (2019). The relationship between attitude towards money, financial literacy, and debt management with young worker’s financial well-being. Pertanika Journal of Social Sciences and Humanities, 27(1), 361-387.
Al Kholilah, N., & Iramani, R. (2013). Studi financial management behavior pada masyarakat surabaya. Journal of Business and Banking, 3(1), 69-80.
Ameliawati, M., & Setiyani, R. (2018). The influence of financial attitude, financial socialization, and financial experience to financial management behavior with financial literacy as the mediation variable. KnE Social Sciences, 811-832.
Anderloni, L., Bacchiocchi, E., & Vandone, D. (2012). Household financial vulnerability: An empirical analysis. Research in Economics, 66(3), 284-296.
Anthes, W. L., & Most, B. W. (2000). Frozen in the headlights: The dynamics of women and money. Journal of Financial Planning, 13(9), 130.
Anthony, M., Sabri, M. F., Rahim, H. A., & Othman, M. A. (2022). Financial Socialisation and Moderation Effect of Gender in the Influence of Financial Behaviour on Financial Well-Being among Young Adults. Malaysian Journal of Consumer and Family Economics, 28, 68-99.
Anthony, M., Sabri, M. F., Wijekoon, R., Abdul, H., Rahim, H. A., Othman, M. A., & Yusoff, I. S. M. (2021). The Influence of Financial Socialization, Financial Behavior, Locus of Control and Financial Stress on Young Adults’ Financial Vulnerability. Social Sciences, 11(19), 289-309.
Arifin, A. Z. (2018). Influence factors toward financial satisfaction with financial behavior as intervening variable on Jakarta area workforce.
Arifin, A. Z. (2018). Influence of financial attitude, financial behavior, financial capability on financial satisfaction. In 15th International Symposium on Management (INSYMA 2018) (pp. 100-103). Atlantis Press.
Arifin, A. Z., & Anastasia, I. (2017). The affect of financial atittude, locus of control and income on financial behavior. In International Conference on Economic, Business, and Accounting (Vol. 1, No. 1, pp. 92-92).
Arifin, A. Z., Kevin, K., & Siswanto, H. P. (2017). The influence of financial knowledge, financial confidence, and income on financial behavior among the workforce in Jakarta. MIX: Jurnal Ilmiah Manajemen, 7(1).
Bakar, M. Z. A., & Bakar, S. A. (2020). Prudent financial management practices among Malaysian youth: The moderating roles of financial education. The Journal of Asian Finance, Economics and Business, 7(6), 525-535.
Baker, H. K., Kumar, S., Goyal, N., & Gaur, V. (2018). How financial literacy and demographic variables relate to behavioral biases. Managerial Finance.
Bartholomae, S., & Fox, J. J. (2021). A decade review of research on college student financial behavior and well-being. Journal of Family and Economic Issues, 42(1), 154-177.
Beatrice, V., Murhadi, W. R., & Herlambang, A. (2021). The effect of demographic factors on behavioral biases. Jurnal Siasat Bisnis, 25(1), 17-29.
Beatrice, V., Murhadi, W. R., & Herlambang, A. (2021). The effect of demographic factors on behavioral biases. Jurnal Siasat Bisnis, 25(1), 17-29.
Cappelen, A., List, J., Samek, A., & Tungodden, B. (2020). The effect of early-childhood education on social preferences. Journal of Political Economy, 128(7), 2739-2758.
Cera, G., Khan, K. A., Mlouk, A., & Brabenec, T. (2021). Improving financial capability: the mediating role of financial behaviour. Economic Research-Ekonomska Istraživanja, 34(1), 1265-1282.
Choi, H., Heo, W., & Kim, J. (2022). Effects of childhood financial socialization on financial behaviors and attitudes among young adults: A moderated mediation model. Journal of Youth Studies, 25(4), 507-524. doi: 10.1080/13676261.2021.1939351.
Chong, K. F., Sabri, M. F., Magli, A. S., Abd Rahim, H., Mokhtar, N., & Othman, M. A. (2021). The Effects of Financial Literacy, Self-Efficacy and Self-Coping on Financial Behavior of Emerging Adults. The Journal of Asian Finance, Economics and Business, 8(3), 905-915.
Churchill, S. A., & Smyth, R. (2021). Locus of control and energy poverty. Energy Economics, 104, 105648.
Cunningham, M. (2008). Influences of gender ideology and housework allocation on women’s employment over the life course. Social science research, 37(1), 254-267.
Dari, K., Hossain, M., & Raman, M. (2021). Financial behavior, socialization and vulnerability among young adults: A mediation model. International Journal of Adolescence and Youth, 26(1), 280-291. https://doi.org/10.1080/02673843.2020.1861021
Daud, S. N. M., Marzuki, A., Ahmad, N., & Kefeli, Z. (2019). Financial vulnerability and its determinants: Survey evidence from Malaysian households. Emerging Markets Finance and Trade, 55(9), 1991-2003.
Deacon, R. E., & Firebaugh, F. M. (1988). Family resource management: Principles and applications. Allyn & Bacon.
Department of Insolvency (2022). Bankruptcy Statistic 2022. Department of Insolvency Malaysia, Putrajaya.
Department of Statistics Malaysia (2020). Unemployment Rate, Department of Statistics Malaysia, Putrajaya.
Department of Statistics Malaysia. (2021). Unemployment Rate, Department of Statistics Malaysia, Putrajaya.
Eagly, A. H., & Wood, W. (2012). Social role theory. Handbook of theories of social psychology, 2.
Falahati, L., Sabri, M. F., & Paim, L. H. (2012). Assessment a model of financial satisfaction predictors: Examining the mediate effect of financial behaviour and financial strain. World Applied Sciences Journal, 20(2), 190-197.
Fan, L., & Babiarz, P. (2019). The determinants of subjective financial satisfaction and the moderating roles of gender and marital status. Family and Consumer Sciences Research Journal, 47(3), 237-259.
Fei, C. K., Sabri, M. F., Mohamed, N. A., Wijekoon, R., & Majid, A. Z. A. (2020). Determinants of financial vulnerability among young employees in Malaysia. Journal of Critical Reviews, 7(15), 3097-3107.
Fei, C. K., Sabri, M. F., Rahim, H. A., & Othman, M. A. (2021) Determinants of Financial Vulnerability Among Credit Counseling and Debt Management Agency Customers.
Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: Algebra and statistics.
Galvin, B. M., Randel, A. E., Collins, B. J., & Johnson, R. E. (2018). Changing the focus of locus (of control): A targeted review of the locus of control literature and agenda for future research. Journal of Organizational Behavior, 39(7), 820-833.
Ghazali, M. S., Alwi, S. F. S., Othman, I., Sabri, M. F., & Abd Aziz, N. N. (2022). The Relationship between Subjective Financial Knowledge and Financial Well-Being among Emerging Adults in Malaysia: Mediating Effect of Financial Behaviour.
Grohmann, A., Kouwenberg, R., & Menkhoff, L. (2015). Childhood roots of financial literacy. Journal of Economic Psychology, 51, 114-133.
Gudmunson, C. G., & Danes, S. M. (2011). Family financial socialization: Theory and critical review. Journal of family and economic issues, 32(4), 644-667.
Gudmunson, C. G., Zuiker, V. S., Katras, M. J., & Sabri, M. F. (2015). Enhancing personal and family finance courses using case studies. College Student Journal, 49(3), 321-330.
Hair Jr, J. F., Sarstedt, M., Ringle, C. M., & Gudergan, S. P. (2017). Advanced issues in partial least squares structural equation modeling. Sage publications.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing theory and Practice, 19(2), 139-152.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Partial least squares structural equation modeling: Rigorous applications, better results and higher acceptance. Long range planning, 46(1-2), 1-12.
Hampson, D. P., Gong, S., & Xie, Y. (2021). How consumer confidence affects price conscious behavior: The roles of financial vulnerability and locus of control. Journal of Business Research, 132, 693-704.
Hayes, D. A., & Finney, A. D. (2013). The Genworth Index (volume 5): Measuring Consumer Financial Security and Vulnerability.
Henseler, J., Hubona, G., & Ray, P. A. (2016). Using PLS path modeling in new technology research: updated guidelines. Industrial management & data systems.
Henseler, J., Ringle, C. M., & Sinkovics, R. R. (2009). The use of partial least squares path modeling in international marketing. In New challenges to international marketing. Emerald Group Publishing Limited.
Hira, T. (2012). Promoting sustainable financial behavior: Implications for education and research. International Journal of Consumer Studies, 37 (1), 502–507.
Jorgensen, B. L., Rappleyea, D. L., Schweichler, J. T., Fang, X., & Moran, M. E. (2017). The financial behavior of emerging adults: A family financial socialization approach. Journal of Family and Economic Issues, 38(1), 57-69.
Khalisharani, H., Johan, I. R., & Sabri, M. F. (2022). The Influence of Financial Literacy and Attitude Towards Financial Behaviour Amongst Undergraduate Students: A Cross-Country Evidence. Pertanika Journal of Social Sciences & Humanities, 30(2).
Khan, M. A. A., Ahmed, A. T. A., & Hassan, M. K. (2019). Financial behavior and household financial vulnerability in Bangladesh. Journal of Family and Economic Issues, 40(1), 33-47. doi: 10.1007/s10834-018-09622-3.
Khan, M. J., Aslam, F., & Nisar-Ul-Mulk, S. (2020). Factors Affecting Financial Literacy and Financial Behaviour of Investors in Pakistan. Research Journal of Social Sciences and Economics Review, 1(3), 80-90.
Kim, J., & Chatterjee, S. (2013). Childhood financial socialization and young adults' financial management. Journal of Financial Counseling and Planning, 24(1), 61.
Kline, R. B. (2011). Convergence of structural equation modeling and multilevel modeling.
Kreitner, K., & Kinichi, A. (2003). Organization Theory and The New Public Administration, Boston: Allyn and Bacon Inc.
Kresnayana, I. G. A. B., Putra, I. G. C., & Sunarwijaya, I. K. (2020). Sistem Pengendalian Intern, Locus of Control, Partisipasi Anggaran, Dan Kinerja Lembaga Perkreditan Desa. Kumpulan Hasil Riset Mahasiswa Akuntansi (KHARISMA), 2(2).
Lanz, M., Sorgente, A., & Danes, S. M. (2020). Implicit family financial socialization and emerging adults’ financial well-being: A multi-informant approach. Emerging Adulthood, 8(6), 443-452.
Luhmann, M., Hofmann, W., Eid, M., & Lucas, R. E. (2012). Subjective well-being and adaptation to life events: a meta-analysis. Journal of personality and social psychology, 102(3), 592.
Madden, R. (2019). Navigating the risks and opportunities of global financial markets. In S. Gao, & X. Qi (Eds.), Proceedings of the 2019 International Future Global Economics Development Conference (pp. 87-91). Atlantis Press.
Magli, A. S., Sabri, M. F., Rahim, H. A., Othman, M. A., Mahzan, N. S. A., Satar, N. M., & Janor, H. (2021). Mediation effect of financial behaviour on financial vulnerability among B40 households. Malaysian Journal of Consumer and Family Economics, 21, 191-217.
Manfrè, M. (2017). Saving Behavior: Financial socialization and self-control. Retrieved on 27/08/2022 from https://siecon3- 607788.c.cdn77.org/sites/siecon.org/files/media_wysiwyg/288-manfre
Mimura, Y. (2014). The relationship between life satisfaction among wives and financial preparedness of households in Japan. Journal of Family and Economic Issues, 35(4), 532-541.
Mogaji, E. (2020). Financial vulnerability during a pandemic: insights for coronavirus disease (COVID-19). Mogaji, E, 57-63.
Mohammad Najib A.G. (1999). Skudai Educational Research. Technology University of Malaysia Publisher. Skudai, Johor Bahru, Malaysia.
Moreno-Herrero, D., Salas-Velasco, M., & Sánchez-Campillo, J. (2018). Factors that influence the level of financial literacy among young people: The role of parental engagement and students' experiences with money matters. Children and Youth Services Review, 95, 334-351.
Nga, K. H., & Yeoh, K. K. (2015). Affective, social and cognitive antecedents of attitude towards money among undergraduate students: A Malaysian study. Pertanika Journal of Social Sciences & Humanities, 23(1), 161-180.
Nurul-Awanis, A. W., Hazlina, A. H., Yoke-May, L., & Zariyawati, M. A. (2011, January). Malaysian education system reform: Educationists’ perspectives. In Proceeding of the International Conference on Social Science, Economics and Art 2011 (pp. 14-15).
Nurul-Awanis, A., Hazlina, A., & Yoke-May, L. Z. (2011). Malaysian Education System Reform:Educationists’ Perspectives. Paper presented at the International Conference on Social Science,Economics and Art 2011, Putrajaya, Malaysia
Ozturk, M., & Kilic, M. (2021). Economic growth and unemployment: Evidence from non-linear panel data analysis for selected EU countries. Journal of Economics and Business, 115, 105960. doi: 10.1016/j.jeconbus.2021.105960.
Pahlevan Sharif, S., Ahadzadeh, A. S., & Turner, J. J. (2020). Gender differences in financial literacy and financial behaviour among young adults: The role of parents and information seeking. Journal of Family and Economic Issues, 41(4), 672-690.
Patel, A., Balmer, N. J., & Pleasence, P. (2012). Debt and disadvantage: the experience of unmanageable debt and financial difficulty in England and Wales. International Journal of Consumer Studies, 36(5), 556-565.
Perry, V. G., & Morris, M. D. (2005). Who is in control? The role of self-perception, knowledge, and income in explaining consumer financial behavior. Journal of consumer affairs, 39(2), 299.
Rea, J. K., Danes, S. M., Serido, J., Borden, L. M., & Shim, S. (2019). “Being able to support yourself”: Young adults’ meaning of financial well-being through family financial socialization. Journal of Family and Economic Issues, 40(2), 250-268.
Rossow, I., & Rise, J. (1993). Living arrangements and health behaviors in adolescence and young adulthood. Health Education Research, 8(4), 495-503.
Sabri, M. F., Abd Rahim, H., Wijekoon, R., Fardini, N., Zakaria, A. S. M., & Reza, T. S. (2020). The mediating effect of money attitude on association between financial literacy, financial behaviour, and financial vulnerability. International Journal of Academic Research in Business and Social Sciences, 10(15), 340-358.
Sabri, M. F., Anthony, M., Wijekoon, R., Suhaimi, S. S. A., Rahim, H. A., Magli, A. S., & Isa, M. P. M. (2021). The Influence of Financial Knowledge, Financial Socialization, Financial Behaviour, and Financial Strain on Young Adults’ Financial Well-Being. International Journal of Academic Research in Business and Social Sciences, 11(12), 567-586.
Sabri, M. F., Aw, E. C. X., Abdul Rahim, H., Burhan, N. A. S., Othman, M. A., & Simanjuntak, M. (2021). Financial literacy, behavior and vulnerability among Malaysia households: Does gender matter. International Journal of Economics & Management, 15(2), 241-256.
Sabri, M. F., Cook, C. C., & Gudmunson, C. G. (2012). Financial well?being of Malaysian college students. Asian Education and Development Studies.
Schultz, D. P., & Schultz, S. E. (2017). Theories of Personality (Eleventh E.).
Shim, S., Barber, B. L., Card, N. A., Xiao, J. J., & Serido, J. (2010). Financial socialization of first-year college students: The roles of parents, work, and education. Journal of youth and adolescence, 39(12), 1457-1470.
Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well-being for young adults. Journal of Applied Developmental Psychology, 30(6), 708-723.
Spector, P. E. (2021). Industrial and organizational psychology: Research and practice. John Wiley & Sons.
Spector, P. E., Cooper, C. L., Sanchez, J. I., O’Driscoll, M., Sparks, K., Bernin, P., ... & Miller, K. (2002). Locus of control and well-being at work: How generalize are western findings? Academy of Management Journal, 45(2), 453-466.
Sumarwan, U., & Hira, T. K. (1993). The effects of perceived locus of control and perceived income adequacy on satisfaction with financial status of rural households. Journal of Family and Economic Issues, 14, 343–364.
Sundarasen, S. D. D., Rahman, M. S., Othman, N. S., & Danaraj, J. (2016). Impact of financial literacy, financial socialization agents, and parental norms on money management. Journal of Business Studies Quarterly, 8(1), 137.
Tang, N., Baker, A., & Peter, P. C. (2015). Investigating the disconnect between financial knowledge and behavior: The role of parental influence and psychological characteristics in responsible financial behaviors among young adults. Journal of Consumer Affairs, 49(2), 376-406.
Tesfaw, A. A., & Yitayih, T. T. (2018). A study on financial stress and coping strategies among students in Rift Valley University, Ethiopia. Humanity & Social Sciences Journal, 13(1), 1-10.
Van Campenhout, G. (2015). Revaluing the role of parents as financial socialization agents in youth financial literacy programs. Journal of Consumer Affairs, 49(1), 186-222.
Van Ophem, J. A. C. (1988). Huishoudens en inkomensdaling (Households and decline in real income) (Doctoral dissertation, Ph. D. diss. (Wageningen: Wageningen Agricultural University)).
Van Ophem, J. A. C. (1990). Unemployed breadwinners and money management. In Frisian long term unemployment (pp. 107-144).
Von Bertalanffy, L. (1967). General theory of systems: Application to psychology. Social Science Information, 6(6), 125-136.
Vyvyan, V., Blue, L., & Brimble, M. (2014). Factors that influence financial capability and effectiveness: Exploring financial counsellors’ perspectives. Australasian Accounting, Business and Finance Journal, 8(4), 3-22.
Walczak, D., & Pie?kowska-Kamieniecka, S. (2018). Gender differences in financial behaviours. Engineering economics, 29(1), 123-132.
Wong, A., Holmes, S., & Schaper, M. T. (2018). How do small business owners actually make their financial decisions? Understanding SME financial behaviour using a case-based approach. Small Enterprise Research, 25(1), 36-51.
Xiao, J. J. (2008). Applying behavior theories to financial behavior. In Handbook of consumer finance research (pp. 69-81). Springer, New York, NY.
Xiao, J. J., Tang, C., & Shim, S. (2009). Acting for happiness: Financial behavior and life satisfaction of college students. Social indicators research, 92(1), 53-68.
Yong, C. C., Yew, S. Y., & Wee, C. K. (2018). Financial knowledge, attitude and behaviour of young working adults in Malaysia. Institutions and Economies, 10(4).
N/A
Copyright: © 2023 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode