Impact of financial literacy, mental budgeting and self control on financial wellbeing: Mediating impact of investment decision making.

The topic of financial wellbeing is a current concern within the realm of personal and household finance. This study aims to examine the influence of cognitive factors, specifically financial literacy, mental budgeting, and self-control, on subjective financial wellbeing. While there exist multiple determinants of financial wellbeing, this research focuses on these particular cognitive factors. The present study aims to examine the mediating role of investment decision-making behavior in the association between cognitive factors and financial well-being. The study employed Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze the data collected from a sample of 449 Chinese university students, with the aim of assessing the empirical associations. The results indicate that financial literacy, mental budgeting, and self-control exert a favorable and noteworthy influence on an individual's financial well-being. The results indicate that individuals with a greater degree of financial literacy are more prone to achieving superior financial well-being. Moreover, individuals who practice mental budgeting, a technique that entails mentally classifying and monitoring their expenditures, demonstrate elevated levels of financial well-being. Likewise, the exercise of self-regulation is identified as a pivotal element that impacts an individual's financial wellbeing. The findings indicate that there is evidence to support the mediator, investment decision-making behavior. This mediator partially mediates the association between the independent variables, namely financial literacy, mental budgeting, and self-control, and financial well-being. The results suggest that individuals with elevated levels of financial literacy, proficient mental budgeting skills, and self-regulatory abilities are inclined towards demonstrating favorable investment decision-making conduct. Consequently, this contributes to their general financial welfare. In general, the study's theoretical implications augment the current knowledge repository, while its practical implications provide feasible perspectives for policymakers, financial institutions, and individuals to foster financial wellness and enhance financial results.