ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776
The Relationship among Financial Literacy, Conscientiousness Traits, Financial Behavior, and Financial Wellbeing
Khaira Amalia Fachrudin1, Amlys Syahputra Silalahi2
1,2Universitas Sumatera Utara, Medan, Indonesia Email: [email protected]
Abstract
The relationship of financial literacy, prudential nature, and financial conduct on one's financial well-being is investigated in the current study. Sumatra Island, Indonesia, was the location of the research sample, which included 600 respondents. Using structural equation modeling and the partial least squares method, the data collected was evaluated. It was found that financial literacy has a favorable and statistically significant impact on investment behavior as well as debt behavior; however, it has a negative and statistically significant impact on financial welfare. It has been shown that conscientiousness has a favorable and statistically significant impact on investing behavior, debt behavior, and overall financial well-being financial literacy has a negative and statistically significant impact on financial well-being when seen directly, but when viewed via the lens of investment behavior and debt, the influence turns positive and statistically significant. The inference is that in order to reach success, a person must change his or her financial behavior.
Keywords: Financial Literacy, Conscientiousness Traits, Investment Behavior, Debt Behavior, Financial Well- Being.
INTRODUCTION
From ancient times to the present, every individual has had a life objective to accomplish. The goal of life is also unique to each individual, but all individuals desire a happy life. In this scenario, happiness might be defined as when an individual achieves his or her goals. Individual success can be assessed in a variety of ways, including the accumulation of assets, the pursuit of career goals, the degree of education attained, and contributions to the lives of others (Diener & Suh, 1987;
Shim et al., 2009). Individuals are said to have attained pleasure, particularly in the financial industry, if they have achieved financial independence, which means that money is no longer the primary goal of life. All activities and life choices are no longer motivated exclusively by monetary gain; rather, money is viewed as a means to an end. Individuals' lives are no longer controlled by money, but by those who control the money (Chortareas et al., 2013; Tharp et al., 2007).
The term "well-being" refers to a condition of being at ease, healthy, and content (Zimmerman, 1995; Veenhoven, 2000).
Financial well-being is one of the domains of well-being, namely a person's sense of satisfaction with their financial situation, but the concept of welfare has evolved to include both material and non-material aspects of a person's perception of their financial situation., improve their standard of living, their ability to make ends meet, their sense of security, their comfort, and their satisfaction with the income and reward distribution system (Philippas & Avdoulas, 2020;
Taft et al, 2013). When it comes to financial well-being, one must bear one critical point in mind: financial health.
Financial Well-being in today's modern competition is needed by society. It is considered necessary because Financial Well-being which includes how one manages one's finances well, is capital to improve the welfare of each individual (Bruggen et al., 2017; Gutter & Copur, 2011). When someone can't manage their money, it's not because they have a poor income; it's because they don't know how to allocate their earnings to different uses (Chu et al., 2017; Adam et al., 2017).
An individual's financial well-being can be measured by their level of financial literacy. There is a wide range of views on financial literacy, according to a variety of sources. In his book, Financial Literacy, Huston (2010) describes financial literacy as the ability to understand, analyze, manage, and explain one's own personal financial circumstances as they relate to material well-being. As well as being able to recognize and act upon any life event that has an impact on day-to-day financial decisions, such as changes in the economy, one must also be able to talk freely about money and financial concerns without feeling embarrassment (or even discomfort) (Hung et al., 2005).
Everyone aspires to be happy and healthy in every way (Boon et al., 2011). Business, finance, home, leisure, health, and the environment are all components of well-being (Taft et al., 2013; van Praag et al., 2003). A person's happiness with his or her financial situation (Hayhoe, 1990), financial adequacy, and sense of personal or family security are all indicators of financial well-being, which shields people from economic hazards including unemployment, illness, bankruptcy, and deprivation. When you've reached retirement age (Goldsmith, 2000). According to previous research, saving and debt management can have a considerable impact on one's financial well-being (Mokhtar et al., 2015), however other data show that saving and debt management have no significant impact on one's financial well-being (Diener et al., 1999).
ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776 Behavioral finance is how humans act in financial settings (Baker & Nofsinger, 2011). Financial behavior is divided into four sub-factors, including savings, investment, and cash and credit management (Hilgert et al., 2003). Many studies have found the effect of financial behavior on financial well-being, including (Coşkuner 2016; Goyal et al., 2021; Park, 2021). However, not many examine financial behavior specifically into investment behavior and debt behavior. There is one study on the effect of debt behavior on financial well-being, but the results are not significant (Agustin et al., 2020). Research that uses investment behavior and debt behavior as mediating variables between the nature of financial literacy and awareness and financial well-being has not been found. This study tries as an intervention variable because these two behaviors can improve individual financial well-being.
Personality plays an important role in human behavior (Solinõ & Farizo, 2014), including managing investments to improve financial well-being (Tauni et al., 2016). Conscientiousness is one of the top five personality traits often used by psychologists concerning individual financial behavior (Thomas et al., 2020).
An individual with a high awareness of money management has a good retirement plan and savings behavior (Donnelly et al., 2012), cannot buy or own a credit card (Brown & Taylor, 2014), and is potentially successful in stock trading (Peterson, 2012). 2007). Furthermore, conscientiousness is associated with higher lifetime income, greater financial wealth, and net worth (Asebedo et al., 2019). The nature of high conscientiousness affects the behavior of savings and loans (Davey &
George, 2011). In addition, conscientiousness was also found to be associated with well-being. In contrast to previous studies that included all personality types, this study only focuses on this personality because it wants to know whether those who are disciplined and have good self-control to achieve goals are persistent, competent, obedient, systematic, intentional, and strive to achieve achievements. Will have good financial behavior and financial well-being as well.
This study examines the effect of financial literacy and conscientiousness traits on financial well-being with investment behavior and debt behavior as intervening variables. The benefit is to motivate efforts to improve financial literacy and change people's financial behavior to improve financial well-being.
LITERATURE REVIEW
The Theory of Planned Behavior
According to the Theory of Planned Behavior (TPB), an individual's actions are the result of his or her own intention to act, which is influenced by a variety of both internal and external factors. Beliefs about a behavior, evaluations of behavioral outcomes, subjective norms, normative beliefs, and motivation to comply all fall under the umbrella of individual attitudes toward behavior (Sulistomo and Prastiwi 2011). A person is more likely to adopt a behavior if they have a positive attitude toward it, get the approval of others who are close to them and are familiar with it, and believe that the behavior can be carried out successfully, according to Lee & Kotler (2011). According to TPB, a person's behavioral intentions are shaped by their attitudes, subjective norms, and their perception of their own behavioral control. A person's actions are influenced by the information or literacy they have, according to this theory (Ajzen, 1991).
The Transtheoretical Model
Prochaska & DiClemente (1983) conceptualized the Transtheoretical Model (TTM). This concept asserts that intervention can alter behavior. If someone believes that the benefits outweigh the drawbacks, he or she will change their conduct.
The Transtheoretical Model is a behavioral change method that is based on an individual's readiness to take a healthier action. It provides a strategy or a change process that guides an individual through the stages of change and health maintenance. This concept elucidates how individuals adjust negative behaviors and acquire favorable ones. The transtheoretical model is a decision-making model that is centered on the individual. The model's fundamental premise is that individuals cannot modify their behavior rapidly, particularly when those actions become regular habits. Individuals progress through five stages of change: Consideration prior to contemplation, contemplation during, preparation for action, action, and maintenance. The application of this theory into financial behavior has been carried out by (Xiao 2008).
Financial Well-Being
Financial well-being shows the extent to which a person comfortably fulfills all of his current commitments and needs and has financial resilience for future sustenance (Kempson et al., 2017). Furthermore, it denotes people's comfort, health, happiness, and financial freedom (Alter, 1997). A financially prosperous person will not be financially depressed, feel comfortable with their current situation, or worry about routine and unexpected expenses (Prawitz et al., 2006), conceptualizing financial well-being as a perception of maintaining a standard of living as financial freedom when this and the future.
ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776 Financial Behavior
Financial behavior includes spending, saving, investing, and individual financial planning (Mutlu & Ozer, 2019). It also involves accurate bill payments, budgeting, future and debt savings, and personal investment and finance (Akben-Selcuk, 2015). In addition, behavioral finance involves careful purchasing and managing loans, savings, and investments (Alkaya &
Ibrahim, 2015). From an economic perspective, saving and investing differ between income and expenditure. Investment behavior and debt behavior are part of financial behavior. Investment behavior is the behavior of investors in finding, analyzing, predicting, and reviewing an investment instrument in the decision-making process, while debt behavior is the behavior of individuals when they decide to borrow and the consequences.
Conscientiousness Traits
Personality is an internal factor affecting financial behavior. It is relatively permanent of thoughts, motives, emotions, and individual behaviors (McCrae & John, 1992). In personality theory, it is known as the big five personality (Goldberg, 1990).
This model is the best model and forms the basis of most modern research. This personality is known as OCEAN (openness to experience, conscientiousness, extraversion, agreeableness, and neuroticism). Only conscientiousness is discussed in this study, which is a personality type that describes a person's ability to exercise self-discipline and self-control to achieve goals. People with this personality can access reliable and accurate information so that they will make more investment transactions if there is clear information. They are also people who like to avoid risk (Aren et al, 2020).
Hypothesis Development
Financial literacy refers to an individual's capacity to use knowledge and skills effectively to achieve a lifetime of financial well-being), make financial decisions regarding budgeting, spending, borrowing, saving, investing, and future planning, as well as to comprehend and apply financial information in their financial management (Huston, 2010).
When people have better financial knowledge, they are better able to make informed purchasing decisions, which in turn allows them to spend, save, and invest more wisely. Most people's savings are held in bank accounts, but those with a higher level of financial literacy put their money into stocks. Risk aversion is also linked to financial knowledge (Aren et al., 2020). Financial literacy is a measure of a person's ability to comprehend and manage their personal finances (Bahovec et al., 2015). At the same time, financial knowledge is a form of financial literacy (Xiao & Porto, 2017). Financial knowledge can be obtained from financial education. However, besides providing financial knowledge, financial education can also modify financial behavior to achieve financial success (Goyal et al., 2021). Based on this description, the following hypothesis is proposed:
H1: Financial literacy has a significant effect on investment behavior.
Financial education has a significant impact on debt behavior and thus on financial well-being (Narges & Laily, 2011).
Financial literacy will also have an effect on debt behavior (Park, 2021). (Hogarth, 2006; Mandell & Klein, 2009). Similarly, (Mandell & Klein, 2009) discovered that financial education increased awareness of credit use. Additionally, financial education has a beneficial effect on responsible credit card payment behavior; those with a higher level of education are more conscientious about paying their debts on time (Shefrin & Nicols, 2014). Many people are in debt now as a result of the "democratization" of loans. Financial illiteracy is associated with a high degree of debt, a greater risk of debt, and a high cost of borrowing (Bahovec et al., 2015). Financial illiteracy leads persons to make unproductive choices, resulting in debts (Mitchell & Lusardi, 2015). The following hypothesis is advanced in light of this description:
H2: Financial literacy has a significant effect on debt behavior.
Financial literacy is knowledge and understanding of financial concepts and risks, skills, motivation, and confidence to apply this knowledge and understanding to make effective financial decisions to improve financial well-being ("OECD (2014). PISA 2012 Results: Students and Money: Financial Literacy Skills for the 21st Century (Volume VI),” 2015). Financial literacy shows the ability to use resources effectively to achieve a lifetime of financial well-being (Hendriks, 2010). High financial literacy will result in high financial well-being (Falahati & Paim, 2011). Individuals with high levels of financial literacy enjoy a high accumulation of wealth from their investments (Aren & Zengin, 2016) and will gain wealth (Jappelli &
Padula, 2013). Individuals who are more mature and educated are more likely to have higher financial well-being (Mahdzan et al., 2020). Furthermore, financial literacy and debt management are related to financial well-being (Abdullah et al., 2019). Based on this description, the following hypothesis is proposed:
H3: Financial literacy has a significant effect on financial well-being.
Conscientiousness is related to self-control and personal finance (Moffitt et al., 2011) (Moffitt et al., 2011), having good financial literacy (Letkiewicz & Fox, 2014), avoiding risk in investment decisions (Oehler et al., 2018). Individuals with high
ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776 conscientiousness whose lives are well ordered do not like uncertainty (Palomäki et al., 2021) and have greater investment skills than others (Goel & Rastogi, 2021). Conscientiousness trait significantly affects investment risk aversion attitude in generation Y (Nga & Ken Yien, 2013). Conscientious investors are conscientious and careful people and cannot be influenced by others, and consider themselves to have greater investment skills than others, but can be influenced by emotional bias so that financial advisors advise them to focus on long-term investments (M. Baker & Wurgler, 2002).
Furthermore, it is an internal factor affecting financial behavior (Çopur, 2015). Based on this description, the following hypothesis is proposed:
H4: Conscientiousness trait has a significant effect on investment behavior.
People with this personality trait are disciplined, goal-oriented, careful, responsible, able to organize, capable (Pinjisakikool, 2018; Tauni et al., 2016), and global thinkers (Solinõ & Farizo, 2014). These personality traits are also thought to be careful in debt, so the following hypothesis is proposed:
H5: Conscientiousness trait has a significant effect on debt behavior.
People with high conscientiousness trait scores have higher lifetime earnings and greater financial health (Asebedo et al., 2019). Due to its caring nature, the following hypothesis is proposed:
H6: Conscientiousness trait has a significant effect on financial well-being.
Bad debt behavior can lead to poor management and individual well-being (Lee & Lee, 2021). Bad debt behavior can lead to defaults, bankruptcy, adverse long-term financial consequences (Telyukova, 2013) and negatively related to financial well-being (Gutter & Copur, 2011). In addition, excessive debt will bring many problems and endanger financial well-being (Bahovec et al., 2015). All dimensions of financial behavior positively and significantly affect financial well-being (Oquaye et al., 2020). This means that individuals who have a positive disposition towards the budget, have a good culture of saving and investing, choose the right insurance, and have good debt behavior will feel safe with their future finances and make pleasant choices for their lives. This opinion is also supported by (Riitsalu & Murakas, 2019), who says that financial behavior score and income level correlate with financial well-being. Based on this description, the following hypotheses are proposed:
H7: Investment behavior has a significant effect on financial well-being.
H8: Debt behavior has a significant effect on financial well-being.
Previous research that has been described previously has found a relationship between financial literacy and conscientiousness trait with financial well-being, but financial behavior is thought to be able to intervene in this relationship because this effect may not occur immediately. It may be necessary to have good financial behavior so that a person can achieve his financial well-being. (Pokhariyal, 2019) said that the intervening variable is a variable that can intervene in the relationship between the independent and dependent variables. Based on the description above, the following hypotheses are proposed:
H9: Financial literacy has a significant indirect effect on financial well-being through investment behavior.
H10: Financial literacy has a significant indirect effect on financial well-being through debt behavior.
H11: Conscientiousness trait has a significant indirect effect on financial well-being through investment behavior.
H12: Conscientiousness trait has a significant indirect effect on financial well-being through debt behavior.
METHOD
This study uses a quantitative approach. Quantitative research provides a better way to identify issues and problems.
Based on the method, this research is included in descriptive research in the category of causal research to see the effect of a dependent variable on the independent variable. The population of this study is the adult community in Sumatra, Indonesia. The sample is 600 people who are randomly selected. The questionnaire given is a closed questionnaire previously tested for validity and reliability. Sampling was assisted with the help of Google forms which were distributed online. The data obtained were analyzed using structural equation modeling-partial least squares (SEM-PLS) and SmartPLS software. In research that uses PLS-SEM, hypothesis testing is carried out by looking at the t-statistic value of the independent sample.
ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776 RESULT AND DISCUSSION
Outer Model Evaluation (Measurement Model): Validity and Reliability Testing
Analyze the convergent and discriminant validity values to determine the reliability of this study. The degree to which indicators within the same construct are positively associated is known as convergent validity.
Table 1. Validity Test based on Loading Factor
X1 X2 Y1.1 Y1.2 Y2
X1 1.000
X2 1.000
Y1.1.1 0.885
Y1.1.2 0.917
Y1.1.3 0.931
Y1.1.4 0.909
Y1.2.1 0.906
Y1.2.2 0.944
Y2.1 0.867
Y2.2 0.886
Y2.3 0.838
Y2.4 0.880
Y2.5 0.828
Figure 1. Validity Testing Based on Loading Factor Description:
X1 = Financial Literacy; X2 = Conscientiousness traits; Y1.1 = Investment Behavior; Y1.2 = Debt Behavior; Y2 = Financial Well Being.
Table 1 and Figure 1 show the loading factor value of each indicator in each of the variables studied. The loading factor value obtained shows a value above 0.7 which means it meets the criteria of convergent validity.
Furthermore, validity testing is carried out based on the average variance extracted (AVE) value.
ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776 Table 2 Validity Test based on Average Variance Extracted (AVE)
Average Variance Extracted (AVE)
X1 1.000
X2 1.000
Y1.1 0.829
Y1.2 0.856
Y2 0.739
The ideal AVE value is greater than or equal to 0.5. (Mahfud & Ratmono, 2013). Because the full AVE value is greater than 0.5, it has passed the AVE validity test. Based on this, a composite reliability (CR) value is used to conduct reliability testing.
Table 3. Reliability Testing based on Composite Reliability (CR) Composite Reliability
X1 1.000
X2 1.000
Y1.1 0.951
Y1.2 0.922
Y2 0.934
Above 0.7 is the ideal CR value (Mahfud & Ratmono, 2013). Since all CR values are more than or equal to 0.7, it's safe to assume that they meet the criteria for reliability established by CR. Furthermore, Cronbach's alpha (CA) value was used for reliability testing.
Table 4 Reliability Testing based on Cronbach's Alpha (CA)
Cronbach's Alpha
X1 1.000
X2 1.000
Y1.1 0.931
Y1.2 0.834
Y2 0.912
CA values above 0.7 are preferred (Mahfud and Ratmono, 2013:67). It is well-known that all CA values are more than or equal to 0.7, indicating that they have met Cronbach's alpha reliability criterion. The Fornell-Larcker technique was used to perform the discriminant validity test. Testing for discriminant validity is shown in Table 5.
Table 5 Discriminant Validity Test
X1 X2 Y1.1 Y1.2 Y2
X1 1.000
X2 0.045 1.000 Y1.1 0.095 0.331 0.910 Y1.2 0.090 0.338 0.507 0.925 Y2 -0.074 0.302 0.318 0.374 0.860
The square root of the AVE of a latent variable is compared to the correlation value between the latent variable and other latent variables in discriminant validity testing. Because the square root value of AVE for each latent variable is greater than the correlation value between the latent variable and the other latent variables, it is assumed that the latent variable satisfies the discriminant validity requirements.
Coefficient of Determination Test (R2)
The coefficient of determination quantifies a model's predictive accuracy. The coefficient of determination quantifies the cumulative effect of exogenous variables on endogenous variables; in other words, it quantifies the contribution of exogenous variables to endogenous variable prediction. Table 6 contains the coefficient of determination results. below:
Table 6 Coefficient of Determination (R-Square)
R Square
Y1.1 0.116
Y1.2 0.120
Y2 0.201
ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776 Based on the results in Table 6:
It is known that the coefficient of determination (r-square) of Y1.1 is 0.116. This value can be interpreted that the effect of X1 and X2 on Y1.1 is 11.6%.
It is known that the coefficient of determination (r-square) of Y1.2 is 0.120. This value can be interpreted that the effect of X1 and X2 on Y1.2 is 12%.
It is known that the coefficient of determination (r-square) of Y2 is 0.201. This value can be interpreted that the effect of X1, X2, Y1.1, Y1.2 on Y2 is 20.1%.
Effect Significance Test (Bootstrapping)
To see the results of the significance test of the effect, it can be seen from Table 6 below:
Table 7 Significance Test of Effect
Original
Sample (O) Sample Mean (M) Standard Deviation (STDEV) T Statistics (|O/STDEV|) P Values
X1 -> Y1.1 0.080 0.076 0.038 2.090 0.037
X1 -> Y1.2 0.075 0.072 0.036 2.071 0.039
X1 -> Y2 -0.118 -0.117 0.037 3.144 0.002
X2 -> Y1.1 0.328 0.328 0.035 9.246 0.000
X2 -> Y1.2 0.335 0.334 0.042 7.956 0.000
X2 -> Y2 0.174 0.175 0.042 4.137 0.000
Y1.1 -> Y2 0.143 0.143 0.054 2.657 0.008
Y1.2 -> Y2 0.253 0.250 0.052 4.877 0.000
Table 8 Mediation Test
Original Sample (O) Sample Mean (M) Standard Deviation (STDEV)
T Statistics (|O/STDEV|)
P Values
X1 -> Y1.1 -> Y2 0.025 0.025 0.013 2.001 0.046
X2 -> Y1.1 -> Y2 0.104 0.106 0.021 4.947 0.000
X1 -> Y1.2 -> Y2 0.028 0.028 0.015 1.924 0.055
X2 -> Y1.2 -> Y2 0.127 0.128 0.020 6.200 0.000
The test results show that at 5% alpha:
1. Financial literacy has a positive and significant effect on investment behavior.
2. Financial literacy has a positive and significant effect on debt behavior.
3. Financial literacy has a negative and significant effect on financial well-being.
4. Conscientiousness trait has a positive and significant effect on investment behavior.
5. Conscientiousness trait has a positive effect on debt behavior.
6. Conscientiousness trait has a positive and significant effect on financial well-being.
7. Investment behavior has a positive and significant effect on financial well-being.
8. Debt behavior has a significant positive effect on financial well-being.
9. Financial literacy has a positive indirect effect on financial well-being through investment behavior.
10. Financial literacy has a positive indirect effect on financial well-being through debt behavior.
11. Conscientiousness has positive and indirect significant effects on financial well-being through investment behavior.
12. Conscientiousness has a positive and indirect significant effect on financial well-being through debt behavior.
Discussion
In terms of investment and debt management, financial literacy has a favorable and significant impact This suggests that the more knowledgeable a person is about finances, the more successful he or she will be at managing investments and debt. Financially literate people are more likely to behave responsibly in their financial affairs than those who are not. A person with a sufficient level of financial literacy is more likely to make long-term financial plans, such as saving for retirement and starting investments early in life. This finding is in line with (Bernheim & Garrett, 2003) (Bahovec et al., 2015; Bajo et al., 2015; Dowling et al., 2008; Fedorova et al., 2015; Goyal et al., 2021; Hamza & Arif, 2019; Hendriks, 2010;
Huston, 2010; Lusardi & Mitchelli, 2007; van Rooij et al., 2012).
ISSN: 0171-4996, Vol. 12, No. 1, 2022, pp 765-776 However, financial literacy was found to have a negative and significant effect on financial well-being, meaning that a high level of financial understanding does not guarantee a person will be financially prosperous. Based on the results of this study, it proves that there is a positive and significant influence of financial attitudes on financial management behavior in a person. This means that someone with a better financial attitude will tend to be wiser in taking actions related to financial management. On the other hand, if someone does not have a good financial attitude, it will influence bad financial management behavior. The financial attitude possessed will help determine a person's actions and behavior in terms of finances, both in the habit of managing their finances by budgeting, having a feeling of security with the financial management that is carried out, the habit of having unexpected funds deposits or saving funds, and will have a positive perception. Good about money. This finding is not in line with (Hendriks 2010; Falahati & Paim, 2011; Jappelli & Padula, 2013; Abdullah et al., 2019; Narges & Laily, 2011; Hendriks, 2010).
Conscientiousness traits positively and significantly affect investment behavior, debt behavior, and financial well-being.
This means that disciplined, persistent, systematic, focused on goals, and able to control themselves tend to have a good investment and debt behavior and have higher welfare. Conscientiousness is obedient, controlled, organized, ambitious, achievement-focused, and self-disciplined. This factor can also be called dependability, impulse control and will to achieve.
In general, individuals who score high on this factor will be hardworking, careful, punctual, and diligent. Individuals like this tend to be confident in themselves to achieve goals. In general, individuals who score high on this factor will be hardworking, careful, punctual, and diligent. Individuals like this tend to be confident in themselves to achieve goals. This finding is supported by (Nga & Ken Yien, 2013; Çopur, 2015; Asebedo et al., 2019).
Consider the impact on a person's financial well-being of their level of financial literacy against their conscientiousness.
People's personalities play a greater role in their ability to maintain good financial health than their knowledge on the subject. As a result, cultivating a positive character is critical. Financial well-being can be affected by investment behavior and debt (debt), which can act as a mediating factor between financial literacy and conscientiousness. The direct impact of financial literacy on financial well-being is negative and significant, but this effect becomes positive and significant when mediated through investment and debt behavior. Financial decision-making skills alone cannot raise or even maintain a person's well-being. For financial literacy to be effective, sound investment and debt management practices must be followed.
The direct effect of conscientiousness traits on financial well-being is positive and significant; when mediated by investment behavior and debt behavior, this effect is also positive and significant. From the original sample figures (O) in Tables 7 and 9, it turns out that the direct effect of conscientiousness traits on financial well-being is greater than the indirect effect (0.174 and 0.127). These findings indicate that personality plays a more important role in determining a person's well-being than financial behavior. This study supports the theory of planned behavior because it has provided empirical evidence that financial literacy and conscientiousness traits can influence investment behavior and debt behavior. This is in line with (Potrich & Vieira, 2018), who say that the theory of planned behavior is suitable for explaining debt behavior.
CONCLUSION
This study has examined the relationship among financial literacy, conscientiousness traits, investment behavior, debt behavior, and financial well-being. His findings confirm the importance of behavioral finance. Investment and debt behavior directly affect financial well-being. These two behaviors can also mediate the influence of financial literacy on financial well-being very well. Conscientiousness traits are more instrumental in realizing financial well-being than personality. Conscientiousness traits also have a greater direct effect on financial well-being than the indirect effect through financial behavior. Financial well-being shows a sense of comfort and worries about financial conditions that conscientiousness traits and good financial behavior can improve. Genes do not solely determine personality, and a supportive environment is needed at this stage of a person's life. This research has implications in the importance of creating a good environment to form a good personality. Financial education is also important to realize good financial literacy. Financial behavior does not appear suddenly; therefore, education and examples for children are very necessary.
Policymakers need to develop strategies for providing education and the environment to improve financial literacy, personality, and good financial behavior to create financial well-being in society.
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