Financial Behavior, Social Relations, Stress and Financial Vulnerability Among Youth in Malaysia

Siti Nurazira Mohd Daud, Russayani Ismail, Shamzaeffa Samsudin
Economic and Financial Policy Institute, School of Economics,
Finance and Banking, Universiti Utara Malaysia

Shahhanim Yahya
Institute for Youth Research Malaysia (IYRES)



The COVID-19 pandemic, the subsequent implementation of the Movement Control Order (MCO), and financial resilience issues during the pre-pandemic period have initiated a study of the extent of financial vulnerability conditions and their link with financial behavior, social relations, and stress conditions among youth in Malaysia. Using data from the Malaysian Youth Index 2020 to include 21,126 respondents, the hypotheses are tested and analyzed through partial least square structural equation modeling (PLS-SEM) techniques. The findings reveal that social relations are the critical antecedent, followed by financial behavior and stress conditions in predicting financial vulnerability, which implies that financial vulnerability can be solved by improving financial behavior, strengthening social relations, and reducing stress conditions. Furthermore, financial behavior has been found to mediate the relationship between social relations and financial vulnerability, as well as stress and financial vulnerability. The nature of interactions between financial behavior, social relations, stress condition, and financial vulnerability would be helpful information for policymakers in encouraging and improving social building programs in society to equip them with cutting-edge financial decision-making tools.

Keywords: financial vulnerability, social relations, financial behavior, stress, youth, PLS-SEM