Mediation Effect of Financial Education between Financial Stress and Use of Financial Technology
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ORIGINAL PAPER
Mediation Effect of Financial Education between Financial Stress and Use of Financial Technology Wookjae Heo1 · Jae Min Lee2 · Abed G. Rabbani3 Accepted: 28 September 2020 © Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract This study investigated the relationship between financial stress and financial technology and included the mediating role of financial knowledge based on the ABC-X model. This study used the 2018 National Financial Capability Study to construct financial stress and the use of financial technology and tested the proposed model with two subgroups: one group with financial education and the other group without financial education. We used confirmatory factor analysis and structural equation modeling to evaluate our model. Results show that respondents with a greater level of financial stress generally tended to more engage in financial technology. When the role of financial knowledge was considered in the model, the relationship between financial stress and the use of financial technology varied by the type of financial knowledge. Although this study did not identify the onset of the coping process directly, the direct effect of financial stress on the use of financial technology in each subgroup regardless of their financial education experience confirms efforts of looking for coping when facing and responding to financially stressful situations. Thus, this study sheds light on the new technology for financial services as a potential tool for better financial management and as a coping mechanism for those with financial stress. Results from this study provide insights for financial practitioners and educators who help US households manage their financial stress. Keywords Financial education · Financial stress · Financial technology · National financial capability study JEL Classification D12 · D14
Introduction Financial stress is the unpleasant feeling that one is unable to meet financial demands, afford the necessities of life, and have sufficient funds to make ends meet (Davis and Mantler * Jae Min Lee jae‑[email protected] Wookjae Heo [email protected] Abed G. Rabbani [email protected] 1
Department of Consumer Sciences, South Dakota State University, Box 2275A, Wagner Hall 149, Brookings, SD 57007‑0295, USA
2
Department of Family Consumer Science, Minnesota State University, Mankato, 102 Wiecking Center, Mankato, MN 56001, USA
3
Department of Personal Financial Planning, University of Missouri, 239 E Stanley Hall, Columbia, MO 65211, USA
2004). The feeling normally includes the emotions of dread, anxiety, and fear, but may also include anger and frustration. Conventional theory holds that people’s responses to a stressful experience are classified into two broad categories: emotion-focused or problem-focused strategies (Carver et al. 1989). Some stressful experiences may evoke emotionfocused strategies, while others may evoke problem-focused strategies. When it comes to financial stress, there has been evidence that people
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