Exploring the Influence of Financial Socialization on University Students' Financial Well-Being using a Two-Stage PLS-ANN Approach

This study investigates the influence of financial socialization, which consists of financial behavior, financial education programs, parental financial education, and peer influence, on the financial well-being of university students. Responses were collected from 395 university students enrolled in undergraduate and graduate programs across colleges in Nepal using a purposive sampling technique. This study uses structural equation modeling (SEM) to examine the effects of financial socialization on the financial well-being of university students. An artificial neural network (ANN) was used to analyze the complex and nonlinear relationships. The results show that all hypotheses are statistically significant. This indicates that financial behavior, financial education programs, parental financial education, and peers contribute significantly to the financial well-being of university students. Financial behavior emerged as the strongest predictor of financial well-being, followed by financial-education programs. The ANN analysis shows that the nonlinear relationship between financial well-being and parental financial education ranks higher than peer influence, in dissimilarity to the PLS-SEM results. The findings emphasize the interplay of the behavioral, educational, and social dimensions of financial development on financial well-being through complex pathways. This study contributes to understanding the multifaceted financial socialization process and provides guidance for prioritizing interventions that focus on behavioral change while addressing the educational and social aspects of financial development to improve the financial well-being of university students and young adults.