Impact of Non-cognitive Traits on Subjective Financial Well-being and Financial Behavior: Evidence from Higher Education Institutions in Kerala, India

Abstract

This study aims to understand the impact of two non-cognitive traits, propensity to plan (PPN) and grit, on subjective financial well-being (FWB) and financial behavior. It adopts the systems approach to family resource management as its theoretical foundation, where the PPN and grit [consistency of interest (CONI) and perseverance (PR)] serve as inputs, short-term financial behavior (STFB) and long-term financial behavior (LTFB) function as throughputs, and subjective FWB as the output. Using a cross-sectional design, data were collected via a self-administered structured questionnaire from 200 faculty and researchers at selected higher education institutions in Kerala, India. The data were analyzed using structural equation modeling (SEM). The findings indicate that CONI, STFB, and LTFB have positive direct effects on subjective FWB. Additionally, the indirect effects of PPN and PR on subjective FWB are mediated by LTFBs, such as savings and retirement planning. The study contributes to the literature on FWB by exploring the role of two non-cognitive traits, PPN and grit, in influencing subjective FWB, while highlighting the mediating role of financial behaviors. The findings offer implications for policymakers and higher education institutions to design tailored interventions that help this group effectively plan and achieve financial goals.