The Interplay of Social Influence, Financial Literacy, and Saving Behaviour among Saudi Youth and the Moderating Effect of Self-Control

Abstract

This study examined the impact of social influence, i.e., parents and peers, on the level of financial literacy among Saudi young adults (students). It also assessed the effect of financial literacy on the development of saving behaviour and the role of self-control as a moderator in the relationship between financial literacy and saving behaviour among the same respondents. The study’s sample included 270 respondents (male and female) from an applied college affiliated with King Faisal University. The study employed partial least squares structural equation modelling (PLS-SEM) for data analysis and interpretation. Some intriguing findings were generated. It was discovered that the influence of both parents and peers can positively predict financial literacy. Furthermore, financial literacy can positively impact young people’s saving habits. One surprising finding was that self-control negatively moderated the relationship between financial literacy and saving behaviour. Self-control was found to dampen the ties between Saudi young people’s financial literacy and saving behaviour.