Enhancing the Financial Well-Being of Young Adults
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2024-06-27
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en
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The financial well-being of Dutch young adults has declined during the last year. Limited knowledge exists regarding the impact of financial behavior, financial knowledge, and student debt on the financial well-being in the specific context of young adults in the Netherlands. This quantitative research provides insights into enhancing their (subjective) financial well-being. To examine this hypotheses derived from theory and established measurement scales were used. The variables were chosen from a Financial Well-Being Framework. Additionally, the control variables of financial counseling, gender, and educational level were incorporated into this research. No previous research has been conducted on these relationships.
The results show that young adults are more secure in their current money management than in their expected future financial security. Additionally, financial behavior and subjective financial knowledge positively affect perceived financial well-being. The research also reveals a mediation effect indicating that higher financial knowledge leads to increased financial behavior, thereby enhancing the financial well-being of young Dutch adults. However, it could not be concluded which specific financial behavior domain (consumption, cash management, saving and investment, credit management) has a positive or negative relationship with financial well-being. Nevertheless, items specifically for financial behavior imply that staying within a budget and saving money positively affect financial well-being. Furthermore, a higher student debt was found to negatively influence financial well-being. This research suggests no differences in the financial well-being of young adults who received financial counseling, which required further research.
These findings contribute to Transformative Service Research by emphasizing the importance of incorporated variables. The development of financial planning and budgeting interventions, fostering knowledge, and debt management are crucial in empowering young adults to achieve and sustain financial well-being. Several practical implications were given for different stakeholders on how to contribute to enhancing the financial well-being of young adults.
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Faculteit der Managementwetenschappen