From financial self-efficacy to financial behaviors: the role of financial advice seeking and stress

Purpose Previous research has demonstrated that financial self-efficacy (FSE) plays a significant role in shaping desirable financial behaviors. However, this relationship might be strengthened or weakened in the presence of financial stress and financial advice seeking during pandemics or similar unexpected events. This research aims to examine the relationship between FSE and financial behaviors under economic uncertainties. Design/methodology/approach The data used in the study was collected between November 17, 2021 and December 15, 2021, and related to economic, demographic, health and psychological attributes before and during the COVID-19 pandemic. The research employs a theoretical framework integrating the financial help-seeking theory with the stress and coping theory to explore these relationships. A moderated mediation model was used to analyze the relationship between financial behavior and FSE. The technique of structural equation modeling (SEM) using the R-Lavaan package was applied to analyze the moderated mediation framework and hypotheses of this study. Findings Financial advice seeking plays different roles in the relationship between FSE and financial behaviors in the presence or absence of financial stress. Consumers are more likely to seek external financial advice to engage in positive financial behaviors when experiencing financial stress. Consumers with higher levels of FSE engaged in more positive financial behaviors. Consumers who have sought financial advice in the past or are actively seeking financial advice are more likely to engage in positive financial behaviors. Originality/value This study introduces and justifies a moderated mediation framework to investigate the relationship between FSE and financial behaviors during financial crises. This study has confirmed the relationship between FSE and financial behaviors while considering the roles of financial advice seeking and financial stress during a pandemic. The findings have practical implications for consumers, financial service providers and policymakers in preparing for unexpected financial shocks and enhancing financial resilience.