Consumer spending self-control, financial well-being and life satisfaction : the moderating effect of relative deprivation from consumers holding debt

Abstract

PURPOSE : The purpose of this study is to investigate the roles of financial well-being and relative deprivation in the relationship between consumer spending self-control (CSSC) and life satisfaction. DESIGN/METHODOLOGY/APPROACH : A cross-sectional study was conducted amongst employed South African credit-active respondents. An online self-administered questionnaire via an online paid-for consumer panel resulted in 608 respondents. Covariance-based structural equation modelling was used for the mediation and moderation models. FINDINGS : The findings of this study revealed that financial well-being mediated the relationship between CSSC and life satisfaction, and relative deprivation moderated the relationship between financial well-being and life satisfaction. PRACTICAL IMPLICATIONS : This study helps financial institutions and academic researchers obtain a better understanding of financial well-being, and emphasises the need for financial organisations to educate and communicate how financial well-being influences life satisfaction. Institutions can provide access to educational platforms that offer courses and tools on financial literacy topics to ensure healthy consumer spending. ORIGINALITY/VALUE : This study mainly contributes to CSSC and financial well-being literature. The interrelationships in this article were informed by the causality orientations in self-determination theory that consider human motivation. The role of financial well-being as an intervening factor and the interaction effect between financial well-being and relative deprivation on life satisfaction were uncovered. This article will help financial organisations to consider initiatives that will assist consumers in controlling their spending behaviour to improve financial well-being and life satisfaction. The ability of individuals to meet financial obligations reduces financial organisations’ exposure to credit risk, ensuring that consumers manage their finances responsibly to achieve financial independence.