PERTANIKA JOURNAL OF SOCIAL SCIENCES AND HUMANITIES

This study investigates the complex interplay between financial stress, financial vulnerability, financial behaviour, and the financial well-being (FWB) of Malaysia's low-income households, spotlighting locus of control (LOC) as a mediating factor and income as a control variable. Using a comprehensive model that accounts for 29% of the variance in FWB, the research analyses responses from 432 household heads across Peninsular and East Malaysia, selected through multi-stage sampling. Questionnaires are employed for data collection, and covariance-based structural equation modelling is used for analysis. The findings reveal that financial behaviours, financial vulnerability, and financial stress significantly influence FWB, with internal LOC acting as a partial mediator. The results underscore the potential for low-income families to improve their FWB by adopting adaptive financial behaviours and strengthening their internal LOC, offering critical insights for policymakers and government bodies. This research emphasises the need to develop targeted, nuanced policies to improve financial decision-making and resilience among economically disadvantaged households, fostering financial stability and overall well-being.

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