Shaping financial well-being: the dynamic role of socialization and knowledge: a structural equation modeling approach

Purpose This study aims to examine the impact of financial socialization on the financial well-being (FWB) of BBA and MBA students at Pokhara University, focusing on the mediating role of financial knowledge (FK). Design/methodology/approach This study employed a causal-comparative research design and a cross-sectional survey approach, using purposive sampling to select 320 BBA and MBA students from Pokhara University and analyzed the mediation role of FK in the relationship between financial socialization and financial well-being (FWB) through structural equation modeling (SEM) using Smart PLS. Findings The study reveals that financial education programs (FEP) significantly enhance both FK and FWB among students. It also shows that FK mediates the relationship between peer and social media influence and FWB, while parental financial education has a limited direct impact on FWB. Research limitations/implications The study’s limitations include its focus on Pokhara University students, restricting generalizability and its cross-sectional design, which limits causal inferences. The study highlights the need for universities to prioritize comprehensive financial literacy programs and peer-led initiatives to enhance FWB. It also urges policymakers to be cautious about relying on social media for financial education, emphasizing the importance of teaching students to evaluate online financial information critically. Further, the study recommends that the government and regulatory agencies prioritize financial literacy programs to ensure the personal FWB of individuals and obtain the overall sustainable economic development of the nation. Originality/value This research provides a novel contribution by emphasizing the mediating role of FK in the relationship between various financial socialization subconstructs and FWB, particularly in the context of higher education students in Nepal, an area that has been underexplored in previous studies.