Financial self–efficacy, Financial Literacy and Subjective Financial Well-being of University Staff in Kenya

Abstract

Financial literacy is an important aspect of the subjective financial well-being of public sector employees. In addition, financial self-efficacy plays a crucial role in determining the personal finances of adults across the board. Globally, financial literacy levels across the board. Hence, the study examined the moderating effect of financial self-efficacy on the relationship between financial literacy and subjective financial well-being among university staff in Western Kenya. The study was guided by Subjective well-being Theory with a target population of 9,786 employees drawn from eight universities in Western Kenya: Moi University, Maseno University, Masinde Muliro University of Science and Technology, Kisii University, University of Eldoret, Jaramogi Oginga Odinga University of Science and Technology, Kibabii University and Rongo University. A sample size of 385 individuals was drawn based on Yamane's formula (1967). The study adopted multistage sampling techniques, and data was collected through a self-administered questionnaire. The Cronbach alpha coefficient > 0.7 indicated that the research instruments were reliable. The study used both descriptive and inferential statistics to analyse the data. The correlation analysis indicated that subjective financial well-being is correlated with financial literacy (r = 0.698, p< 0.05) and financial self-efficacy (r = 0.259, p< 0.05). Financial literacy explained 40.19 % of variations in financial well-being, while self-efficacy explained 9.49 % of variations in subjective financial well-being. The moderating effect of financial self-efficacy explains 49.93 % of variations in the subjective financial well-being of university staff. The study rejected all the null hypotheses and concluded that self-efficacy has direct and indirect effects on the subjective financial well-being of university staff. The study recommends that universities introduce seminars and workshops on personal finances, prioritise the work-life balance among staff and provide regular employee development programmes. The policy recommendations include the institutionalisation of employee wellness campaigns. Further studies may examine the impact of financial capabilities on the financial well-being of staff and students