The primary focus of the study was to explore how financial knowledge mediates the relationship between socioeconomic factors and saving behavior of households in Pru East District. A descriptive cross-sectional study design was employed. The population consisted of all household heads in Pru East District. A multi-stage cluster sampling and Stratified sampling techniques were used to select a sample of 365 households using structured questionnaires. Structured equation modeling (SEM) was used to assess both the direct and indirect pathways connecting financial knowledge, socioeconomic factors, financial literacy and saving behavior of households. The study’s findings indicated that financial knowledge partially mediates and has an indirect significant association between socioeconomic factors and saving behavior of households. The model demonstrated a strong explanatory power (R² = 0.728). The study concluded that financial knowledge is a crucial means through which socioeconomic factors shape household saving behavior. Thus, financial literacy should be enhanced to facilitate the extension of the disrupted positive correlation between financial literacy and financial well-being, while also mitigating other detrimental contextual effects associated with specific socioeconomic factors.
Jeremiah Kumah (Fri,) studied this question.