Luận văn thạc sĩ UEH factors affecting personal financial well being of young adults in viet nam

TABLE OF CONTENTS

ACKNOWLEDGEMENT

TABLE OF CONTENTS

LIST OF TABLES

LIST OF FIGURES

ABSTRACT..................................................................................................................1

CHAPTER 1 INTRODUCTION .................................................................................2

1.1 Background to the Research.............................................................................2

1.2 Statement of the Problem.................................................................................4

1.3 Research Objective and Research Questions...................................................5

1.4 Scope of the Research ......................................................................................6

1.5 Significance of the Research............................................................................7

1.6 Thesis Structure................................................................................................7

CHAPTER 2 LITERATURE REVIEW ......................................................................9

2.1 Theoretical Framework ....................................................................................9

2.2 Development of Research Hypotheses ..........................................................11

2.2.1 Financial well-being.............................................................................11

2.2.2 Financial behaviors ..............................................................................12

2.2.3 Financial literacy..................................................................................14

2.2.4 Financial socialization..........................................................................17

2.3 Theoretical Model ..........................................................................................19

2.4 Chapter Summary...........................................................................................20

CHAPTER 3 RESEARCH METHODOLOGY ........................................................21

3.1 Research Design.............................................................................................21

3.2 Measurement Scales.......................................................................................22

3.3 Draft Questionnaire........................................................................................25

3.4 Pilot Study......................................................................................................26

3.5 Main Study.....................................................................................................29

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3.5.1 Sampling method .................................................................................29

3.5.2 Sample size...........................................................................................29

3.5.3 Data collection method ........................................................................30

3.5.4 Data analysis techniques......................................................................30

3.5.4.1 Cronbach’s alpha........................................................................30

3.5.4.2 Exploratory factor analysis ........................................................31

3.5.4.3 Confirmatory factor analysis......................................................31

3.5.4.4 Structural equation model ..........................................................32

3.6 Chapter Summary ..........................................................................................32

CHAPTER 4 DATA ANALYSIS AND RESULTS .................................................33

4.1 Descriptive Analysis......................................................................................33

4.2 Cronbach’s Alpha ..........................................................................................34

4.3 Exploratory Factor Analysis (EFA)...............................................................36

4.4 Confirmatory Factor Analysis (CFA) ............................................................38

4.4.1 Financial behaviors ..............................................................................39

4.4.2 Saturated model....................................................................................40

4.5 Structural Model ............................................................................................42

4.6 Discussion of the Results...............................................................................45

4.7 Chapter Summary ..........................................................................................46

CHAPTER 5 CONCLUSIONS .................................................................................48

5.1 Conclusions....................................................................................................48

5.2 Implications....................................................................................................50

5.3 Limitations and Recommendations for Further Research .............................52

REFERENCES............................................................................................................53

APPENDIX

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LIST OF TABLES

Table 3.1 Measurement scale....................................................................................... 23

Table 3.2 Findings of qualitative research ................................................................... 27

Table 4.1 Gender.......................................................................................................... 34

Table 4.2 Age ............................................................................................................... 34

Table 4.3 Career........................................................................................................... 34

Table 4.4 Cronbach’s Alpha coefficients..................................................................... 35

Table 4.5 KMO and Bartlett’s Test.............................................................................. 37

Table 4.6 EFA for all variables.................................................................................... 38

Table 4.7 Relationship between constructs.................................................................. 42

Table 4.8 Result of hypothesis testing ......................................................................... 43

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LIST OF FIGURES

Figure 2.1. Deacon and Firebaugh’s Family Resource Management Model (1988)......10

Figure 2.2. Theoretical model.........................................................................................19

Figure 3.1. Research design ............................................................................................21

Figure 4.1. CFA for financial behavior...........................................................................39

Figure 4.2. Saturated model ............................................................................................41

Figure 4.3. Structural model result .................................................................................44

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ABSTRACT

Recognizing the negative influences of low personal financial well-being on

life satisfaction, personal health, and even on their family and their organization, there

have been more and more studies on financial well-being, especially among young

adults who associate with the most financial problems and financial distress. This

research examines the factors affecting personal financial well-being of young adults

in the Vietnamese context; among them are financial behaviors, financial literacy and

financial socialization.

The research model was developed based on the Family Resource Management

System Model developed by Deacon and Firebaugh (1988) and the Social Learning

Theory developed by Bandura (1986). The refined questionnaire through the pilot

study was distributed to target respondents aged 22 to 30 living in Ho Chi Minh City.

The data from 264 valid completed questionnaires then were used to test the

measurement scale by Cronbach’s alpha, exploratory factor analysis and confirmatory

factor analysis before used to test the theoretical model and hypotheses by the

structural equation modeling.

The research indicated that all hypotheses were supported. The direct effect of

financial behaviors; the both direct and indirect effect of financial literacy, where

indirect effect was mediated by financial behaviors; and the indirect effect of financial

socialization with the mediating role of financial behaviors and financial literacy on

financial well-being were all supported in this study. These findings are matching the

previous researches. The recommendation for individuals, family, managers,

education institutions and government agencies are thereby suggested to improve

personal financial well-being of young adults. However, the future research should

consider the limitations of the current study about the data collection method and the

measurement scales to improve the results and findings.

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CHAPTER 1

INTRODUCTION

1.1 Background to the Research

Even in the United States, one of the most advanced countries, three quarters of

the population are stressed about financial problems and a quarter face with intense

ones (CNBC, 2015). This reality was also confirmed in O'Neill, Sorhaindo, Xiao &

Garman (2005) that personal financial issues affect millions of U.S households. These

issues have become the biggest concern because of what they bring about.

Financial distress or low financial well-being has great effect not only on

personal health but also on their family and organization (Prawitz et al., 2006).

Personal finances and health are proved to be interrelated in various ways. Bagwell

(2000), Drentea and Lavrakas (2000), Kim, Garman, and Sorhaindo (2003) found that

people with high financial well-being have better health and less physical impairment

than others (as cited in O'Neill et al., 2005). Experiencing these problems, people tend

to frequently feel disappointed, anxious, and guilty or even encounter difficulty in

sleep. They could not support their hospital fees and conduct periodic health check as

well. Moreover, their loved ones are involved in their problems. Parents might be

angry at their children unreasonably. Couples are easy to intensely argue minor issues

which they are supposed to talk about and give comments for gently. Parrotta and

Johnson (1998) stated that dissatisfaction with one’s financial status could lead them

to their marital conflicts. People who experience financial matters even bring them to

work, which does reduce their job effectiveness. According to Kim and Garman

(2003), financial stress was examined to have positive relationship with absenteeism

and make employees less committed to their organizations. Both of these problems

have been got much attention because they are obviously expensive for the employers.

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Due to these consequences, there have been growing and growing researches

about personal financial well-being, especially among young adults. Young adults or

emerging adults are specified by many researches as the subject attached to the most

financial problems as well as followed by financial distress (summarized in Chan,

Chau & Chan, 2012). People in this period are who have just started experiencing

their independent lives and managing their finances by themselves, therefore also took

more responsibility of their financial status. According to Peterson and Leffert (1995),

young adulthood is highlighted by significant changes in life (as cited in Gutter and

Copur, 2011) and associated with more “risk-taking behaviors related to poor financial

decision making” (Worthy, Jonkman, & Blinn-pike, 2010, p. 161).

Financial distress could discourage students from focusing on their learning,

workers from focusing on their job. Mental health might be affected negatively by this

stress. The relationship inside family becomes strained and tense when both spouses

must always find the ways to solve or be obsessed by their financial problems.

Employers suffer the decreased labor productivity due to the again and again absence

as well as less commitment of their employees. Therefore, understanding financial

well-being and factors influencing it is extremely considerable.

According to the World Happiness Report 2013, the well-being level which

includes financial well-being of Asians is lower than North Americans, Latin

Americans and Western European (Asian Century Institute, 2014). This status makes

financial well-being even more worthy to be studied in Vietnam. Although there are

some researches about financial management, it seems that personal financial well￾being has been sparsely studied under Vietnamese context. At International School of

Business, University of Economics, Ho Chi Minh City, there was one 2014 thesis

examining factors affecting financial management behaviors. To go further, this thesis

studies in depth the personal financial well-being and factors affecting it including

financial behaviors among Vietnamese young adults.

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