Financial Literacy as a Mediator between Emotional Spending and Financial Well-Being among Postgraduate Students

Scholarly studies and real-life observations confirm that financial literacy is a necessary life skill. Financial literacy can affect how a person manages their wealth, spending habits, and ultimately their overall financial wellness. Emotional spending increases due to stress, societal pressures, or lifestyle factors. This trend is of growing concern for young adults transitioning to independence. Among this population, postgraduate students represent a significant group. This research uses a quantitative design to measure the effect of financial literacy on emotional spending behavior. The quantitative design is incorporated through a closed-ended survey administered to 392 postgraduate students. The survey instrument measures constructs such as financial literacy, financial well-being, and emotional spending patterns, while examining their interrelationships. The research used Structural Equation Modeling (SEM), specifically the Partial Least Squares (PLS) method in Smart PLS 4.0, to analyze the data and test the hypothesized relationships among the variables. The present study intends to identify gaps in financial knowledge amongst postgraduate students, while bringing out the relationships among financial literacy, emotional spending, and ultimately influencing financial well-being.