A Comprehensive Financial Well-Being Model with Emphasis on Financial Culture, Financial Literacy, and Financial Anxiety : A Mixed-Methods Approach Based on Grounded Theory and Structural Equation Modeling

Articles in Press

Document Type : Original Article

Authors
Sura Rafiq Abdulrazzaq Al-Darouq 1
mahdi madanchi zaj 2
fatemeh samadi 3
1 Department of Financial Management, Science and Research Branch, Islamic Azad University, Tehran, Iran
2 Department of Financial Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran
3 Department of Financial Management, East Tehran Branch, Islamic Azad University, Tehran, Iran
10.22034/jmaak.2026.79089.4703
Abstract
Financial well-being has become an important determinant of individuals’ economic, psychological, and social health, particularly in countries facing economic instability such as Iraq. Limited financial education, weak financial culture, and high financial anxiety have significantly shaped financial behaviors and increased financial stress among individuals. This study aimed to develop an integrated model of financial well-being in Iraq by examining the roles of financial literacy, financial culture, and financial anxiety in influencing financial behaviors and overall well-being. A mixed-methods approach was employed. In the qualitative phase, 35 semi-structured interviews with bank employees and customers in Baghdad, Basra, and Mosul were analyzed using grounded theory to identify key constructs and relationships. In the quantitative phase, the proposed model was validated using data collected from 420 standardized questionnaires and analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that financial literacy and financial culture positively influence financial behavior and financial well-being, while financial anxiety has a negative effect. Financial behavior also plays a mediating role in the relationship between these factors and financial well-being. Overall, the results highlight the multidimensional nature of financial well-being in Iraq and provide practical implications for policymakers to enhance financial security through targeted educational and psychological interventions.
Keywords
Financial Well-Being
Financial Literacy
Financial Culture
Financial Anxiety
Financial Behaviors
  1. Adam, S., Brown, T., & Smith, J. (2021). Financial anxiety and decision-making under uncertainty. Journal of Behavioral Finance, 22(3), 210–225. https://doi.org/10.1080/xxxxxx
  2. Agarwalla, S., Barua, S., & Ghosh, S. (2023). Financial literacy and economic empowerment: Evidence from emerging economies. International Review of Economics and Finance, 87, 123–138. https://doi.org/10.1016/j.iref.2023.01.005
  3. Archuleta, K. L., Dale, A., & Spann, S. M. (2013). College students and financial distress: Exploring debt, financial satisfaction, and financial anxiety. Journal of Financial Counseling and Planning, 24(2), 50–62. https://doi.org/10.1891/1052-3073.24.2.50
  4. Arora, A., & Kumar, R. (2024). Mitigating financial stress through financial literacy interventions. Journal of Economic Psychology, 91, 102635. https://doi.org/10.1016/j.joep.2024.102635
  5. Badsaz, A., & Ahmadi, H. (2025). Examining the relationship between financial literacy and financial well-being of employees: A case study of municipal employees in Bushehr Province. Accounting and Management Perspective Journal, 8(104), 58–83. [In Persian]
  6. Barberis, N., & Thaler, R. (2020). Behavioral finance: Progress and problems. Annual Review of Financial Economics, 12, 1–22. https://doi.org/10.1146/annurev-financial-110419-041030
  7. Brüggen, E., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228–237. https://doi.org/10.1016/j.jbusres.2017.06.013
  8. Charmaz, K. (2021). Constructing grounded theory (3rd ed.). Sage Publications.
  9. Corbin, J., & Strauss, A. (2015). Basics of qualitative research: Techniques and procedures for developing grounded theory (4th ed.). Sage Publications.
  10. DeVellis, R. F. (2017). Scale Development: Theory and Applications (4th ed.). Sage.
  11. Falahati, Z., Moein al-Din, M., & Shahrestani, S. (2023). Measuring financial literacy of Yazd electricity distribution company employees and its relationship with their financial, physical, and mental well-being. Accounting and Management Perspective Journal, 6(83), 97–112. [In Persian]
  12. Faridi, S., & Madanchi Zaj, M. (2026). A structural model of financial well-being in Iran: The mediating role of financial self-efficacy and the moderating role of financial inclusion. Journal of Financial Knowledge and Security Analysis, 72 (Winter) . [In Persian]
  13. Farkhbakht Foomani, A., & Ahmadzadeh, Z. (2021). The relationship between financial literacy and employees’ financial well-being considering the role of financial self-efficacy: A case study of financial staff in Gilan University of Medical Sciences. Journal of Innovative Research Approaches in Management and Accounting, 5(18), 136–150. [In Persian]
  14. Frąckiewicz, M. (2023). Financial anxiety and behavioral outcomes: Evidence from European households. Journal of Economic Behavior & Organization, 215, 105–123. https://doi.org/10.1016/j.jebo.2023.05.012
  15. Gerrans, P., Speelman, C., & Campitelli, G. (2020). Financial wellbeing and financial literacy: A systematic review. Journal of Family and Economic Issues, 41, 1–15. https://doi.org/10.1007/s10834-019-09626-6
  16. Glaser, B., & Strauss, A. (1967). The discovery of grounded theory: Strategies for qualitative research. Aldine.
  17. Hasler, A., & Lusardi, A. (2022). Financial literacy around the world: Insights from the OECD/INFE survey. OECD Publishing.
  18. Haynes, S. N., Richard, D., & Kubany, E. S. (1995). Content validity in psychological assessment: A functional approach. Psychological Assessment, 7(3), 238–247.
  19. Huston, S. J. (2010). Measuring financial literacy. Journal of Consumer Affairs, 44(2), 296–316.
  20. Kadoya, Y., & Khan, A. (2020). Financial literacy and household finance: Evidence from Asia. Asia-Pacific Journal of Financial Studies, 49(5), 637–659. https://doi.org/10.1111/ajfs.12272
  21. Kline, R. B. (2016). Principles and Practice of Structural Equation Modeling (4th ed.). Guilford Press.
  22. Klontz, B., Britt, S., & Archuleta, K. (2011). Financial Psychology: Individuals, Couples, and Families. Springer.
  23. Kouzmenko, V., Urban, C., & Smith, L. (2021). Financial literacy, household behavior, and financial well-being. Journal of Financial Counseling and Planning, 32(1), 1–18. https://doi.org/10.1891/1052-3073.32.1.1
  24. Kumar, P., & Mishra, S. (2022). Financial stress as a moderating factor in personal finance decisions. Journal of Behavioral and Experimental Finance, 34, 100–114. https://doi.org/10.1016/j.jbef.2022.100581
  25. Lee, J., & Mortimer, J. (2023). Cultural influences on financial literacy and well-being: Cross-national evidence. Journal of Consumer Affairs, 57(2), 450–478. https://doi.org/10.1111/joca.12412
  26. Li, X., Chen, Y., & Zhang, L. (2022). Financial knowledge, culture, and household financial behavior. International Journal of Bank Marketing, 40(6), 1234–1254. https://doi.org/10.1108/IJBM-05-2021-0219
  27. Liu, Y., Wang, H., & Li, J. (2021). Financial literacy and emotional regulation: The role of anxiety in investment decisions. Finance Research Letters, 38, 101–117. https://doi.org/10.1016/j.frl.2020.101178
  28. Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5
  29. Lusardi, A., & Mitchell, O. S. (2021). Financial literacy and planning: Implications for retirement wellbeing. National Bureau of Economic Research Working Paper, No. 28349. https://doi.org/10.3386/w28349
  30. Mehdi Dokht, M. (2021). The relationship between financial literacy and financial well-being of employees in District 1 Municipality of Khorramabad. Journal of New Research in Entrepreneurship and Business Development, 2(6), 534–546. [In Persian]
  31. Mohammad, R., Khan, A., & Ali, S. (2021). Self-control, risk aversion, and financial behavior: A behavioral finance perspective. Journal of Behavioral Finance, 22(1), 34–48. https://doi.org/10.1080/15427560.2020.1830032
  32. Netemeyer, R. G., Warmath, D., Fernandes, D., & Lynch, J. G., Jr. (2018). How am I doing financially? A construct definition and scale development of perceived financial well-being. Journal of Consumer Research, 45(1), 68–88. https://doi.org/10.1093/jcr/ucx109
  33. OECD. (2020). OECD/INFE international survey of adult financial literacy. OECD Publishing.
  34. Perry, V. G., & Morris, M. D. (2005). Who is in control? The role of self-perception, knowledge, and experience in financial decision-making. Journal of Consumer Affairs, 39(2), 299–313. https://doi.org/10.1111/j.1745-6606.2005.00013.x
  35. Pirayesh-Rad, M., Hajihah, Z., Safa, M., & Gholami Jamkarani, R. (2023). The impact of social responsibility on the relationship between financial literacy, money attitude, and financial well-being. Accounting and Auditing Studies, 12(48), 83–100. [In Persian]
  36. Pirayesh-Rad, M., Safa, M., Hajihah, Z., & Gholami Jamkarani, R. (2025). The effect of financial literacy and money attitude on financial well-being: The mediating role of financial ethics. Financial Accounting and Auditing Research, 17(67), 177–200. [In Persian]
  37. Rai, A., Kumari, P., & Sharma, S. (2021). Cultural determinants of financial literacy and wellbeing. Asian Journal of Economics and Banking, 5(2), 123–140. https://doi.org/10.1108/AJEB-03-2021-0012
  38. Rezaei Deh Abadi, Z., Shahrestani, S., & Zahmatkesh, Z. (2023). Investigating the relationships among financial literacy, financial threats, and individual financial well-being. Accounting and Management Perspective Journal, 6(87), 219–236. [In Persian]
  39. Rezaei, G., Taghizadeh, R., Keshtkar, R., & Ansari, R. (2025). Examining the direct and indirect effects of self-control and future time perspective on financial well-being. Strategic Budget and Finance Research, 6(3), 131–160. [In Persian]
  40. Rezai, S., Ghasemi, V., & Ahmadi, F. (2023). Financial literacy, cultural background, and financial wellbeing in Middle Eastern contexts. Middle East Journal of Management, 10(1), 45–63. https://doi.org/10.1108/MEJM-01-2023-0010
  41. Sages, R., Bhandari, S., & Lee, M. (2022). The impact of financial anxiety on consumer behavior. Journal of Economic Psychology, 91, 102634. https://doi.org/10.1016/j.joep.2022.102634
  42. Serido, J., Shim, S., & Tang, C. (2020). Financial anxiety and well-being: Mechanisms and interventions. Journal of Family and Economic Issues, 41, 221–236. https://doi.org/10.1007/s10834-020-09657-0
  43. Shahhir, O., Samadi Lergani, M., Pourali, M. (2022). Examining the relationship between personality traits, financial well-being, and financial behavior of Iranian certified accountants. Accounting and Management Auditing Knowledge, 11(44), 61–74. [In Persian]
  44. Shahmoradi, N., Abouei Mehrizi, E., & Shirgholami, S. (2024). Examining the effect of electronic financial literacy and financial confidence on accounting students' financial well-being: The mediating role of financial behavior. Financial and Behavioral Accounting Research, 4(15), 1–20. [In Persian]
  45. Shayan, P., & Dastan, M. (2022). Financial culture and household well-being: Evidence from developing countries. Journal of Consumer Policy, 45, 89–112. https://doi.org/10.1007/s10603-022-09491-5
  46. Shefrin, H. (2021). Behavioral corporate finance (2nd ed.). McGraw-Hill Education.
  47. Shim, S., Xiao, J. J., Barber, B. L., & Lyons, A. C. (2009). Pathways to life success: A conceptual model of financial well‑being for young adults. Journal of Applied Developmental Psychology, 30(6), 708–723.
  48. Skidmore, J., & Rowley, K. (2024). Anxiety and household financial decisions: Evidence from longitudinal data. Journal of Financial Counseling and Planning, 35(1), 1–19. https://doi.org/10.1891/JFCP-23-00003
  49. Sorgente, A., & Lanz, M. (2021). Financial well-being and its predictors: A meta-analysis. Journal of Economic Psychology, 82, 102–125. https://doi.org/10.1016/j.joep.2021.102340
  50. Stolper, O. (2022). The effect of financial literacy on household financial resilience. Journal of Consumer Affairs, 56(1), 1–23. https://doi.org/10.1111/joca.12368
  51. Tabatabaei, A. S., Moein al-Din, M., & Shahrestani, S. (2024). Assessing financial literacy and financial self-efficacy of judiciary employees in Yazd Province and its impact on their well-being dimensions. Accounting and Management Perspective Journal, 7(94), 82–100. [In Persian]
  52. Tang, N. (2016). Understanding the financial culture of individuals: Implications for policy and financial education. Journal of Financial Counseling and Planning, 27(1), 1–13. https://doi.org/10.1891/1052-3073.27.1.1
  53. Urban, C., Kouzmenko, V., & Smith, L. (2022). Financial literacy and economic well-being in transitional economies. Journal of Financial Services Research, 61, 1–25. https://doi.org/10.1007/s10693-021-00368-5
  54. Xiao, J. J., & Porto, N. (2023). Financial well-being: Measurement, determinants, and policy implications. Journal of Consumer Affairs, 57(1), 50–75. https://doi.org/10.1111/joca.12400
  55. Zhang, L., & Kim, J. (2021). Financial culture, literacy, and household financial management. Journal of Family and Economic Issues, 42, 1–19. https://doi.org/10.1007/s10834-020-09732-5.