Financial management practices and life satisfaction: The mediating role of financial satisfaction

Authors

  • Taufik Hidayat Universitas Ahmad Dahlan

DOI:

https://doi.org/10.12928/jombi.v2i2.1296

Abstract

Purpose-Every individual desires to fulfill all life satisfaction with their income. With their income, each individual needs to recognize financial management practices to achieve their life satisfaction. According to certain research, life satisfaction is impacted by financial management practices and financial satisfaction.  By using good financial management practices, one can attain both financial and life satisfaction.  This study aims to analyze the role of financial management practices on life satisfaction with financial satisfaction as a mediator.

Design/Methodology/Approach-This study used purposive sampling, which was selected based on certain criteria, and obtained 150 respondents. The research data collection used a questionnaire distributed online using Google Forms addressed to Bank Rakyat Indonesia employees in Yogyakarta, Indonesia. The analytical tool used was Smart PLS with a bootstrapping process.

Findings-This study explains that financial management practices do not affect life satisfaction. Financial satisfaction has a positive effect on life satisfaction, and financial management practices positively affect life satisfaction through financial satisfaction as a mediating variable.

Research limitations/implications-This research has limitations. The number of respondents is minimal, so it needs to be increased. The respondents do not represent all Bank Rakyat Indonesia employees in all regions of Indonesia. Therefore, the results of this study cannot interpret the condition of life satisfaction of Bank Rakyat Indonesia employees in all areas of Indonesia or bank employees in general.

Originality/value-This research is still very minimal and was conducted by previous researchers who used the objects of Bank Rakyat Indonesia employees in Yogyakarta, Indonesia. Previous studies generally used different objects or were in certain regions.

References

Ali, A., Rahman, M. S. A., & Bakar, A. (2015). Financial satisfaction and the influence of financial literacy in Malaysia. Social Indicators Research, 120, 137-156. https://doi.org/10.1007/s11205-014-0583-0

Amati, V., Meggiolaro, S., Rivellini, G., & Zaccarin, S. (2018). Social relations and life satisfaction: The role of friends. Genus, 74, 1-18. https://doi.org/10.1186/s41118-018-0032-z

Ameliawati, M., & Setiyani, R. (2018). The influence of financial attitude, financial socialization, and financial experience to financial management behavior with financial literacy as the mediation variable. KnE Social Sciences, 811-832. https://doi.org/10.18502/kss.v3i10.3174

An, H. Y., Chen, W., Wang, C. W., Yang, H. F., Huang, W. T., & Fan, S. Y. (2020). The relationships between physical activity and life satisfaction and happiness among young, middle-aged, and older adults. International Journal of Environmental Research and Public Health, 17(13), 4817. https://doi.org/10.3390/ijerph17134817

Arifin, A. Z. (2018). Influence factors toward financial satisfaction with financial behavior as intervening variable on Jakarta area workforce. European Research Studies Journal, 21(1), 90–103.

Atatsi, E. A., Azila-Gbettor, E. M., Akuma-Zanu, H., & Mensah, C. (2023). Financial management practices and life satisfaction: Mediating effect of financial satisfaction. Cogent Education, 10(2), 2251746. https://doi.org/10.1080/2331186X.2023.2251746

Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228-237. https://doi.org/10.1016/j.jbusres.2017.03.013

Çopur, Z. (2015). Assessing the causal relationship among financial problems, financial management practices, financial satisfaction, and life satisfaction. The International Journal of Interdisciplinary Organizational Studies, 9(2), 17. https://doi.org/10.18848/2324-7649/CGP/v09i02/53434

Çopur, Z., & Gutter, M. S. (2019). Economic, sociological, and psychological factors of the saving behavior: Turkey case. Journal of Family and Economic Issues, 40, 305-322. https://doi.org/10.1007/s10834-018-09606-y

Coşkuner, S. (2016). Understanding factors affecting financial satisfaction the influence of financial behavior financial knowledge and demographics. Imperial Journal of Interdisciplinary Research (IJIR), 2(5).

Davis, K., & Runyan, R. C. (2016). Personality traits and financial satisfaction: Investigation of a hierarchical approach. Journal of Financial Counseling and Planning, 27(1), 47-60. https://doi.org/10.1891/1052-3073.27.1.47

Hair, J. F., Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of Business Research, 109, 101-110. https://doi.org/10.1016/j.jbusres.2019.11.069

Heo, W., Lee, J. M., & Park, N. (2020). Financial-related psychological factors affect life satisfaction of farmers. Journal of Rural Studies, 80, 185-194. https://doi.org/10.1016/j.jrurstud.2020.08.053

Klapper, L., & Lusardi, A. (2020). Financial literacy and financial resilience: Evidence from around the world. Financial Management, 49(3), 589-614. https://doi.org/10.1111/fima.12283

Lathan, C. S., Cronin, A., Tucker-Seeley, R., Zafar, S. Y., Ayanian, J. Z., & Schrag, D. (2016). Association of financial strain with symptom burden and quality of life for patients with lung or colorectal cancer. Journal of Clinical Oncology, 34(15), 1732-1740. https://doi.org/10.1200/JCO.2015.63.2232

Maddux, J. E. (2017). Subjective well-being and life satisfaction: An introduction to conceptions, theories, and measures. Routledge.

Netemeyer, R. G., Warmath, D., Fernandes, D., & Lynch Jr, J. G. (2018). How am I doing? Perceived financial well-being, its potential antecedents, and its relation to overall well-being. Journal of Consumer Research, 45(1), 68-89. https://doi.org/10.1093/jcr/ucx109

Ngamaba, K. H., & Soni, D. (2018). Are happiness and life satisfaction different across religious groups? Exploring determinants of happiness and life satisfaction. Journal of Religion and Health, 57(6), 2118-2139. https://doi.org/10.1007/s10943-017-0481-2

Owusu, G. M. Y. (2023). Predictors of financial satisfaction and its impact on psychological well-being of individuals. Journal of Humanities and Applied Social Sciences, 5(1), 59-76. https://doi.org/10.1108/JHASS-05-2021-0101

Petty, J. W., Titman, S., Keown, A. J., Martin, P., Martin, J. D., & Burrow, M. (2015). Financial management: Principles and applications. Pearson Higher Education AU.

Schnettler, B., Miranda-Zapata, E., Grunert, K. G., Lobos, G., Denegri, M., Hueche, C., & Poblete, H. (2017). Life satisfaction of university students in relation to family and food in a developing country. Frontiers in Psychology, 8, 1522. https://doi.org/10.3389/fpsyg.2017.01522

Shapiro, A. C., & Hanouna, P. (2019). Multinational financial management. John Wiley & Sons.

Tay, L., Kuykendall, L., & Diener, E. (2015). Satisfaction and happiness: The bright side of quality of life. Global handbook of quality of life: Exploration of well-being of nations and continents.

VanderWeele, T. J. (2017). On the promotion of human flourishing. Proceedings of the National Academy of Sciences, 114(31), 8148-8156. https://doi.org/10.1073/pnas.1702996114

Woodyard, A. S., & Robb, C. A. (2016). Consideration of financial satisfaction: What consumers know, feel and do from a financial perspective. Journal of Financial Therapy, 7(2), 4. https://doi.org/10.4148/1944-9771.1102

Downloads

Published

2025-03-06

Issue

Section

Articles