MEDIATING EFFECT OF FINANCIAL LITERACY ON THE INFLUENCE OF PARENTAL FINANCIAL SOCIALISATION ON SUBJECTIVE FINANCIAL WELLBEING OF COMMUNITY COLLEGE STUDENTS

Abstract

The aim of this study is to investigate the influence of parental financial socialisation and financial literacy on subjective financial well-being of community college students in Johor. Correlational study was employed to investigate and measure the level of relationship between parental financial socialisation, financial literacy, and subjective financial well-being. The total number of respondents involved in this study is 432 community college students from Johor. In analysing the obtained data, Statistical Package for Social Science (SPSS) Version 23 has been utilised to analyse descriptive statistics for parental financial socialisation and subjective financial well-being, while Rasch Measurement Modeling was employed to measure descriptive statistics for financial literacy and its dimensions. In analysing Structural Equation Modeling (SEM), Smart Partial Least Square Version 3.3.2 was used to evaluate the correlation measures of all the variables involved in this study. Based on correlational study, the result showed that parental financial socialisation has a direct and significant influence on financial literacy and subjective financial well-being respectively. However, the findings of this study found that financial literacy did not mediate the influence of parental financial socialisation on subjective financial well-being. As a conclusion, parental financial
socialisation is a critical factor which highly need to be considered in enhancing financial literacy and elevating subjective financial well-being level among community college students in Johor. The findings of the current study implied that parents and financial institution should always encourage and support community college students in acquiring adequate financial information to enhance their financial literacy acquisition and to improve good subjective financial well-being.