An Empirical Investigation into the Influence of Financial Attitude, Financial Knowledge, and Financial Behaviour on Individuals' Financial Satisfaction

Abstract

Objectives: This study aims to explore the key determinants of individuals’ financial satisfaction within the Albanian context. It focuses on analysing the roles of financial knowledge, financial attitude, and financial behaviour in shaping financial satisfaction. Prior Work: Grounded in behavioural finance theory, the study builds upon existing literature examining how financial literacy and behaviour influence financial well-being. However, limited research has addressed these factors collectively within the Albanian or broader transitional economy context. Approach: The research adopts an integrated framework using Partial Least Squares Structural Equation Modelling (PLS-SEM) to assess the complex relationships among latent variables. The study utilises a multi-indicator measurement model where financial knowledge, financial attitude, and financial behaviour are conceptualised as exogenous predictors of financial satisfaction. Results: Empirical findings reveal that financial attitude and financial behaviour significantly and positively impact financial satisfaction, while financial knowledge does not show a statistically significant direct effect. Implications: The results provide actionable insights for policymakers, educational institutions, and financial stakeholders in Albania. They underscore the need for policies and programmes that not only enhance financial knowledge but also promote positive financial attitudes and responsible behaviour. Value: This paper contributes original insights into financial satisfaction in a post-communist transition country, offering practical recommendations for improving financial well-being in emerging economies.