Financial Anxiety and Financial Well-Being Among Banking Customers: The Moderating Effect of Income Level

Abstract

Financial anxiety has emerged as a critical psychological determinant of individuals' financial decision-making and overall financial well-being, particularly in developing economies characterized by economic uncertainty. Despite growing scholarly interest in financial well-being, empirical evidence examining its association with financial anxiety among banking customers in Pakistan remains limited. This study investigates the relationship between financial anxiety and financial well-being among banking customers and examines whether financial well-being differs across gender and income groups. A quantitative cross-sectional research design was employed, and data were collected from 423 banking customers in the provinces of Punjab and Sindh using a structured questionnaire based on validated measurement scales. The data were analyzed using descriptive statistics, Pearson correlation, multiple linear regression, independent-samples t-test, and one-way analysis of variance (ANOVA). The findings reveal a significant negative relationship between financial anxiety and financial well-being, indicating that higher levels of financial anxiety are associated with lower levels of perceived financial security and financial satisfaction. Regression analysis further demonstrates that financial anxiety is a significant negative predictor of financial well-being. Additionally, statistically significant differences in financial well-being were observed across gender and income groups, with male respondents and higher-income individuals reporting comparatively greater financial well-being. These findings contribute to the behavioral finance and financial psychology literature by providing empirical evidence from Pakistan's banking sector and underscore the importance of addressing psychological factors alongside economic conditions in promoting financial well-being. The study offers practical implications for banking institutions, financial educators, and policymakers by highlighting the need for targeted financial literacy initiatives, financial counseling services, and customer-centered interventions aimed at reducing financial anxiety and enhancing long-term financial well-being.