Role of financial risk attitude and financial behavior as mediators in financial satisfaction

Abstract

PurposeThe purpose of this paper is to examine the relationships between financial knowledge, socialization and financial satisfaction with financial risk attitude and financial behavior as a mediator after demonetization and introduction of GST.Design/methodology/approachThe sample consisted responses of 286 individuals from the city of Allahabad, Uttar Pradesh, India and making financial decisions for the household for at least last two years. The data were analyzed using exploratory factor analysis and mediation regression analysis.FindingsAll sub-scales used to measure constructs had satisfactory reliabilities and internal consistencies. It was found that financial risk attitude and financial behavior both mediate the relationship between financial socialization and financial satisfaction as well as between financial knowledge and financial satisfaction.Research limitations/implicationsThis research is based upon survey method and voluntary participation. Hence one can question generalization of findings to larger samples. Moreover, the study is limited to a restricted geographical region which could affect the generalization of findings.Practical implicationsResults provide insights into the antecedents of financial satisfaction of individuals from tier II city of India. Financial planners may utilize this study for enhancement of financial satisfaction of their clients and hence retention of the same.Originality/valueA majority of researchers use survey without evaluation validity of instruments in the selected context and sample. This research contributed to the literature and practice by testing validation of constructs of financial satisfaction in India.