Revisiting sustainable financial behavior: The distinct roles of financial well-being, mental health, and consumption behavior

Abelia Fatimah Handayani; Hadi Ismanto; Rabeatul Husna Abdull Rahman

doi:10.31106/jema.v23i1.24989

Authors

Abelia Fatimah Handayani Department of Management, Faculty of Economics and Business, Universitas Islam Nahdlatul Ulama, Jepara
Hadi Ismanto Department of Management, Faculty of Economics and Business, Universitas Islam Nahdlatul Ulama, Jepara
Rabeatul Husna Abdull Rahman Faculty of Business and Management, Universiti Teknologi MARA Perlis, Arau

DOI:

https://doi.org/10.31106/jema.v23i1.24989

Keywords:

Financial Well-Being, Mental Health, Financial Behavior, Sustainable Consumption, Theory of Planned Behavior

Abstract

This study investigates the influence of financial well-being and mental health on employee financial behavior, both directly and indirectly through consumption behavior, within emerging economies. Despite extensive research on financial literacy and economic determinants, the influence of psychological well-being and consumption behavior on financial behavior remains underexplored, particularly its mediating role between financial well-being, mental health, and financial behavior. Using a quantitative approach, data were collected from 140 private-sector employees in Indonesia and analyzed using PLS–SEM. The findings reveal that financial well-being, mental health, and consumption behavior significantly and positively affect employee financial behavior. Furthermore, financial well-being significantly influences consumption behavior, which mediates the relationship between financial well-being and financial behavior. However, consumption behavior does not mediate the relationship between mental health and financial behavior, highlighting that psychological stability may directly strengthen employees’ capacity for responsible financial planning and long-term financial management. This study contributes to the behavioral finance and strategic management literature by combining psychological and financial factors in employee financial decision-making and mental health in financial behavior.

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