Predictors of financial satisfaction and its impact on psychological wellbeing of individuals

Abstract

Purpose – In this study, the author examines the effect of financial knowledge, financial attitude and responsible financial management behaviour on financial satisfaction and investigates the association between financial satisfaction and psychological wellbeing of individuals. The author examines these relationships having controlled for the influence of key demographic variables including age, gender, marital status, income level and employment status of respondents on the predicted relationships. Design/methodology/approach – Data was gathered by means of a self-administered questionnaire to postgraduate business students from a large public university in Ghana. The hypothesized relationships of the study were tested using the Partial Least Square Structural Equation Modelling (PLS-SEM) technique. Findings – The author shows from the structural model analysis using the bootstrapping procedure that financial knowledge, financial attitude and sound financial management behaviour have important implications on financial satisfaction levels of individuals. Further, the author finds financial satisfaction to be an important predictor of the psychological wellbeing of individuals. Practical implications – The paper highlights the relevance of financial satisfaction on the psychological wellbeing of an individual and identifies some of the dominant factors that are associated with financial satisfaction. Originality/value – This study examines the concept of financial satisfaction at the individual level and uniquely highlights the psychological implications of financial satisfaction.

Keywords

• Structural equation modelling
• Financial management
• Psychological wellbeing
• Financial satisfaction