Strengthening Financial Health for Sustainable Finance: Evidence from Young Working Adults in Malaysia

Abstract

Strengthening financial health is a key priority as young working adults face rising living costs and rapid digitalisation. This study examines a Financial Health Index (FHI) conceptualising financial health across four dimensions: financial knowledge, financial attitude, financial socialisation, and digital financial literacy. Using survey data from 217 young working adults in Malaysia, the study employs descriptive statistics, correlation analysis and regression analysis to assess the level of financial health and examine its relationship with financial well-being. The findings indicate moderate to high financial health, with higher performance in digital financial literacy (M=4.62), financial socialisation (M= 4.27) and financial attitude (M=4.25), but lower financial knowledge (M=3.52). The FHI positively correlates with financial well-being (r=0.45, p<0.001). Furthermore, direct path analysis shows that financial attitude (= 0.318, p< 0.001) and digital financial literacy (= 0.284, p<0.001) are the primary drivers of financial well-being, whereas financial knowledge and socialisation exert minor direct effects. The study highlights financial health as a vital foundation for ethical and sustainable finance and long-term economic stability among young working adults.