Factors affecting financial well-being: the mediating role of financial behavior towards religiosity and anti-consumption lifestyle – evidence from Indonesia
-
DOIhttp://dx.doi.org/10.21511/imfi.21(3).2024.16
-
Article InfoVolume 21 2024, Issue #3, pp. 187-198
- 300 Views
-
55 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Research on financial well-being not only employs objective measures such as income, but also utilizes a psychological approach to measure subjective well-being, which is beneficial for alleviating stress stemming from financial conditions, enhancing overall mental health, and augmenting individuals’ quality of life. This study devises a metric for financial well-being, incorporating variables such as religiosity, anti-consumption lifestyle, and financial behavior through a quantitative approach using Structural Equation Model. The research model is examined using LISREL 8.0 for data analysis drawn from a questionnaire administered to 256 Muslim respondents. The research findings revealed that good financial behavior is the main key to achieving better financial well-being, with support from an anti-consumerist lifestyle towards such financial behavior. Meanwhile, religiosity does not significantly influence financial behavior. While religiosity can have a direct positive effect on financial well-being, it does not do so through the mediation of financial behavior. An anti-consumption lifestyle itself does not directly affect financial well-being without the help of mediating supportive financial behavior. The practical implications of these research findings suggest that financial education programs should not only focus on the aspect of religiosity alone, but also be practical and applicable to all individuals regardless of their level of religiosity.
- Keywords
-
JEL Classification (Paper profile tab)D91, I31, P36, Z12
-
References51
-
Tables4
-
Figures1
-
- Figure 1. Research model
-
- Table 1. Validity and reliability of research instrument
- Table 2. Goodness of Fit
- Table 3. Demographic overview and characteristics of respondents
- Table 4. Hypothesis test and path analysis
-
- Abbas, D., Ali, M., Nohong, M., & Sobarsyah, M. (2020). Predicting the Financial Behavior of the Religious Organization Board in Indonesia. Journal of Asian Finance, Economics and Business, 7(12), 1159-1166.
- Abdullah, N., Fazli, S. M., & 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.
- Achour, M., Grine, F., Mohd Nor, M. R., & Mohd Yusoff, M. Y. Z. (2015). Measuring Religiosity and Its Effects on Personal Well-Being: A Case Study of Muslim Female Academicians in Malaysia. Journal of Religion and Health, 54(3), 984-997.
- Adam, A. M., Frimpong, S., & Boadu, M. O. (2017). Financial literacy and financial planning: Implication for financial well-being of retirees. Business and Economic Horizons, 13(2), 224-236.
- Alfi, C. F., & Yusuf, S. N. S. (2022). Religiosity and Saving Behavior: a Preliminary Investigation Among Muslim Students in Indonesia. Journal of Islamic Monetary Economics and Finance, 8(1), 25-48.
- Azevedo, A. (2020). Recognizing consumerism as an “illness of an empty soul”: A catholic morality perspective. Psychology and Marketing, 37(2), 250-259.
- Beak, E., Chung, S. J., & Suh, K. H. (2022). Relationship between Religiosity and Subjective Well-Being among Middle-Aged Korean Women: Focused on Roles of Existential Consciousness and Savoring Beliefs. Religions, 13(5), 402.
- Begum, A., Jingwei, L., Haider, M., Ajmal, M. M., Khan, S., & Han, H. (2021). Impact of environmental moral education on pro-environmental behaviour: Do psychological empowerment and islamic religiosity matter? International Journal of Environmental Research and Public Health, 18(4), 1-19.
- Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228-237.
- Carranza Esteban, R. F., Turpo-Chaparro, J. E., Mamani-Benito, O., Torres, J. H., & Arenaza, F. S. (2021). Spirituality and religiousness as predictors of life satisfaction among Peruvian citizens during the COVID-19 pandemic. Heliyon, 7(5).
- Chavali, K., Mohan Raj, P., & Ahmed, R. (2021). Does Financial Behavior Influence Financial Well-being? Journal of Asian Finance, Economics and Business, 8(2), 273-280.
- Churchill, S. A., Appau, S., & Farrell, L. (2019). Religiosity, income and wellbeing in developing countries. Empirical Economics, 56(3), 959-985.
- Cwynar, A. (2020). Financial literacy, behaviour and well-being of millennials in poland compared to previous generations: The insights from three large-scale surveys. Review of Economic Perspectives, 20(3), 289-335.
- Dewi, V. I., Febrian, E., Effendi, N., Anwar, M., & Nidar, S. R. (2020). Financial literacy and its variables: The evidence from Indonesia. Economics and Sociology, 13(3), 133-154.
- Evrensel, A. Y. (2018). Contradictory effects of religiosity on subjective well-being. Cogent Economics and Finance, 6(1), 1-26.
- Faheem, S., Bukhari, H., Woodside, F. M., Hassan, R., Shaikh, A. L., & Mazhar, W. (2019). Is religiosity an important consideration in Muslim consumer behavior Exploratory study in the context of western. Journal of Islamic Marketing, 10(4), 1288-1307.
- Fu, J. (2020). Ability or opportunity to act: What shapes financial well-being? World Development, 128.
- Goi, M. T., Palil, M. R., Zain, N. H. M., & Mamat, N. H. (2023). Self-Efficacy, Religiosity, Financial Behavior, and Financial Well-being. In European Proceedings of Social and Behavioural Sciences (pp. 420-431).
- Hair Jr, J. F., Hult, G. T. M., Ringle, C. M., Sarstedt, M., Danks, N., & Ray, S. (2023). Review of Partial Least Squares Structural Equation Modeling (PLS-SEM) Using R: A Workbook Structural Equation Modeling: A Multidisciplinary Journal, 30(1), 165-167.
- Hashmi, F., Aftab, H., Martins, J. M., Mata, M. N., Qureshi, H. A., Abreu, A., & Mata, P. N. (2021). The role of self-esteem, optimism, deliberative thinking and self-control in shaping the financial behavior and financial well-being of young adults. PLoS ONE, 16(9), 1-23.
- Hasibuan, B. K., Lubis, Y. M., & HR, W. A. (2017). Financial Literacy and Financial Behavior as a Measure of Financial Satisfaction. 1st Economics and Business International Conference 2017 (EBIC 2017), 46, 504-509.
- He, Y., Wang, Y., & Gao, X. (2022). What role does religion have in shaping human consumption? Religions, 13(8), 1-17.
- Hoetoro, A., & Hannaf, M. S. (2019). The Relationship between Religiosity, Self-Interest, and Impulse Buying: an Islamic Perspective. Iqtishadia, 12(1), 41-57.
- Hooper, D., Coughlan, J., & Mullen, M. (2008). Structural Equation Modelling: Guidelines for Determining Model Fit. Electronic Journal of Business Research Methods, 6(1), 53-60.
- Kholis, N., Mujib, A., & Maesaroh, I. (2022). Subjective Financial Well-being Among Islamic Religious Teachers in Indonesia. International Journal of Economics and Finance Studies, 14(4), 309-329.
- Klug, K., & Niemand, T. (2021). The lifestyle of sustainability: Testing a behavioral measure of precycling. Journal of Cleaner Production, 297, 1-11.
- Lee, J. M., Lee, J., & Kim, K. T. (2020). Consumer Financial Well-Being: Knowledge is Not Enough. Journal of Family and Economic Issues, 41(2), 218-228.
- Lee, M. S. W., & Ahn, C. S. Y. (2016). Anti-consumption, Materialism, and Consumer Well-being. Journal of Consumer Affairs, 50(1), 18-47.
- Mahdzan, N. S., Zainudin, R., Sayuti, M., Shaari, B., & Li, L. (2022). The influence of religious belief and psychological factors on borrowing behaviour among Malaysian public sector employees. Asia-Pasific Journal of Business Administration, 15(3), 361-385.
- Memon, M. A., Ting, H., Cheah, J.-H., Thurasamy, R., Chuah, F., & Cham, T. H. (2020). Sample size for survey research: Review and recommendations. Journal of Applied Structural Equation Modeling, 4(2), 1-20.
- Miftahuddin, M. A., Wibowo, U. D. A., & Alfalisyado. (2020). Analisis Religiusitas, Halal Brand Personality Dan Norma Subyektif Terhadap Keputusan Pembelian Kosmetik Pada Remaja di Kota Purwokerto. Al Tijarah, 6(3), 31-42.
- Mutmainah, L. (2018). The Role of Religiosity, Halal Awareness, Halal Certification, and Food Ingredients on Purchase Intention of Halal Food. Ihtifaz: Journal of Islamic Economics, Finance, and Banking, 1(1), 33.
- Muzakkiyah, N., & Suharnan. (2016). Religiusitas, Penyesuaian Diri dan Subjektive Well Being. Persona, Jurnal Psikologi Indonesia [Persona, Indonesian Journal of Psychology], 5(01), 28-38.
- Mylonidis, N., & Zioga, A. (2018). Religious Activity and Financial Behavior : Evidence from Dutch Household Survey Data. SSRN Electronic Journal, 1, 1-26.
- Nepomuceno, M. V., & Laroche, M. (2014). The impact of materialism and anti-consumption lifestyles on personal debt and account balances. Journal of Business Research, 68(3), 654-664.
- Netemeyer, R. G., Warmath, D., Fernandes, D., & Lynch, J. G. (2018). How Am i Doing? Perceived Financial Well-Being, Its Potential Antecedents, and Its Relation to Overall Well-Being. Journal of Consumer Research, 45(1), 68-89.
- Nugroho, A. P., Hidayat, A., & Kusuma, H. (2017). The influence of religiosity and self-efficacy on the saving behavior of the Islamic banks. Banks and Bank Systems, 12(3), 35-47.
- Onodugo, C., Onodugo, I., Ogbo, A., Okwo, H., & Ogbaekirigwe, C. (2021). Moderating role of social capital on the effect of financial behavior on financial inclusion. Problems and Perspectives in Management, 19(3), 502-512.
- Otoritas Jasa Keuangan. (2019). Survei Nasional Literasi dan Inklusi Keuangan Indonesia 2019. In Survey Report.
- Pastwa-Wojciechowska, B., Grzegorzewska, I., & Wojciechowska, M. (2021). The role of religious values and beliefs in shaping mental health and disorders. Religions, 12(10), 1-19.
- Ponchio, M. C., Cordeiro, R. A., & Gonçalves, V. N. (2019). Personal factors as antecedents of perceived financial well-being: evidence from Brazil. International Journal of Bank Marketing, 37(4), 1004-1024.
- Portwood-Stacer, L. (2012). Anti-consumption as tactical resistance: Anarchists, subculture, and activist strategy. Journal of Consumer Culture, 12(1), 87-105.
- Purnamawati, I. G. A., Suyanan Utama, M., Suartana, I. W., & Marhaeni, A. (2021). Financial Education, Psychological And Spiritual On Financial Behavior. Turkish Journal of Computer and Mathematics, 12(12), 2932-2944.
- Ramalho, T. B., & Forte, D. (2019). Financial literacy in Brazil – do knowledge and self-confidence relate with behavior? RAUSP Management Journal, 54(1), 77-95.
- Riptiono, S. (2019). Does Islamic Religiosity Influence Female Muslim Fashion Trend Purchase Intention? An Extended of Theory of Planned Behavior. Iqtishadia, 12(1), 12-29.
- Seegebarth, B., Peyer, M., Balderjahn, I., & Wiedmann, K. P. (2016). The Sustainability Roots of Anticonsumption Lifestyles and Initial Insights Regarding Their Effects on Consumers’ Well-Being. Journal of Consumer Affairs, 50(1), 68-99.
- Sehrawat, K., Vij, M., & Talan, G. (2021). Understanding the Path Toward Financial Well-Being: Evidence From India. Frontiers in Psychology, 12.
- Sorgente, A., & Lanz, M. (2019). The multidimensional subjective financial well-being scale for emerging adults: Development and validation studies. International Journal of Behavioral Development, 43(5), 466-478.
- Subchi, I., Zulkifli, Z., Latifa, R., & Sa’diyah, S. (2022). Religious Moderation in Indonesian Muslims. Religions, 13(5), 451.
- Touchette, L., & Nepomuceno, M. V. (2020). The environmental impact of consumption lifestyles: Ethically minded consumption vs. tightwads. Sustainability, 12(23), 1-25.
- Vuković, M., & Pivac, S. (2021). Does financial behavior mediate the relationship between self-control and financial security? Croatian Operational Research Review, 12(1), 27-36.