DOES FINANCIAL LITERACY AND FINANCIAL STRESS EFFECT THE FINANCIAL WELLNESS?

Abstract

Nowadays, people use financial wellness’s as terminology to understand the level of the individual’s financial condition. Previous researches show that although the persons have a lot of debts, they feel satisfied with their financial status. Conversely with those who are in good financial wellness with their wealth of life. Additionally, two elements have been discussed in relation to the income earner’s financial wellness which is economic well-being and financial well-being. Imbalance of financial wellness among low-medium income earners is due to reducing in employment opportunities, income instability and increase the number of family members. Therefore, personal financial management is important to ensure good or bad financial wellness among income earners. In this paper, financial literacy and financial stress are considered to determine the relationship of financial wellness. The result showed that both factors are significant with a strong positive relationship. It is important to describe the ability of income earners manage their money and apply the knowledge to make an effective financial decision. Thus, the organization should imply the financial education programs to their employees that can enhance financial literacy and reduce financial stress. Further research should be explored the other determinant factor such as financial self-efficacy and financial help-seeking behavior. These factors will improve the low-medium income earners’ financial wellness by seeking financial help as well as reducing financial stress.