Financial Literacy and Financial Well-being of Australian Consumers: A Moderated Mediation Model of Impulsivity and Financial Capability

We test a moderated mediation model for a twofold purpose. First, to examine the mediating role of financial capability (FC) in the association between financial literacy (FL) and financial well-being (FW). Second, to analyze if non-impulsive future-oriented behavior (NIB) moderates the associations of FL with FC and FL with FW. We use the PROCESS macros in IBM SPSS Statistics to test the moderated mediation model and analyze the 2016 wave of the Household, Income and Labour Dynamics in Australia Survey. The empirical analysis shows that FC partially mediates the association between FL and FW. Furthermore, the moderated mediation analysis shows that NIB strengthens the associations of FL with FC and FL with FW. Specifically, the positive associations of FL with FC and FL with FW significantly increase for those consumers who score high on NIB. The findings have implications for the financial services industry. Professional financial planners can positively improve the ability of consumers to deal with their financial matters by highlighting the importance of FL and NIB. To our knowledge, this is the first study to assess a moderated mediation model, which examines the role of FC as a mediator variable and NIB as a moderator variable in the association between FL and FW.