Financial Literacy and Financial Well-Being: Evidence from Malaysia

Abstract

Researchers, governments and professional organizations are concerned about how consumers, households, students, and employees handle their finances. A large percentage of people in both developed and developing countries are said to be financially illiterate. Everyone today is confronted with significant financial decision-making issues. This current study therefore seeks to critically review the literature from Malaysia context, a developing country, which published from 2015 to 2021 to highlight gap in financial literacy and financial well-being. Findings from the review indicate that, psychological factors, socio-demographic factors, socio-economic background, financial literacy, financial socialization, financial knowledge, financial attitude, financial behavior, financial capability, financial management, financial planning, retirement planning, work environment, financial aid and debt may have association with financial well-being. Knowledge about savings and Islamic financial instrument are revealed low among young employees. In addition, Islamic financial literacy study is scarce, while digital financial literacy study has become vital in financial technology era. It is also found that workers are the common subject of study in the literature. Therefore, this current study brings guidance for future research that related to financial literacy and financial well-being as well as practical implications.