The Mediating Role of Rational Buying in the Relationship between Financial Literacy and Financial Well-being

Abstract

Recently, financial well-being has become a growing topic of interest among personal financial researchers and personal financial planners. The study aims to investigate the demographic and personal financial knowledge determinants of financial well-being among Egyptians. Using data sample of 386 respondents and multiple regression analysis, the results display that gender, age, educational level, income and marital status are demographical determinants of financial well-being. Moreover, the results demonstrate that financial literacy and rational buying are knowledge and behavioural determinants of financial well-being. Furthermore, the results of Baron and Kenny approach to test the mediating role show that rational buying partially mediates the relationship between financial literacy and financial well-being. The results are discussed from the perspective of the theory of planned behaviour and motivation theory.

Keywords: Financial literacy, financial well-being, rational buying behaviour