What Determines Personal Financial Behaviour? A Research on Individual Personality Traits and Emotions

This study examines the determinants of personal financial behaviour, with a focus on personal emotions and personality traits. Drawing on survey data from 428 individuals in Vietnam, the research employs a structural equation model (SEM) approach framework combined with a qualitative research method to explore the relationship between individual personality traits and financial behaviour. The findings reveal that personality traits such as conscientiousness, openness, and emotional stability are positively associated with sound financial behaviours, including consumption, saving, and investment. In contrast, extraversion and agreeableness are negatively associated with effective credit management, as individuals with these traits are more prone to impulsive behaviour and poor budgeting. Additionally, the results highlight that individuals with better emotion control tend to make more rational financial decisions and exhibit more effective personal financial management overall. The study contributes to the behavioural finance literature by integrating psychological factors into a model of financial behaviour from a theoretical perspective, offering empirical evidence from a developing country context, and providing practical insights for financial education and policy design. By integrating psychological dimensions into financial capability programs, stakeholders can better support individuals in achieving sustainable financial health and resilience.