Lulaj, Enkeleda
A icle
C acking he weal h puzzle: In es iga ing he in e play
o pe sonal inance, expendi u e beha io , and inancial
managemen
Ekonomika
P o ided in Coope a ion wi h:
Vilnius Uni e si y P ess
Sugges ed Ci a ion: Lulaj, Enkeleda (2024) : C acking he weal h puzzle: In es iga ing he in e play o
pe sonal inance, expendi u e beha io , and inancial managemen , Ekonomika, ISSN 2424-6166,
Vilnius Uni e si y P ess, Vilnius, Vol. 103, Iss. 3, pp. 122-142,
h ps://doi.o g/10.15388/Ekon.2024.103.3.8
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Ekonomika ISSN 1392-1258 eISSN 2424-6166
2024, ol. 103(3), pp. 122–142 DOI: h ps://doi.o g/10.15388/Ekon.2024.103.3.8
C acking he Weal h Puzzle:
In es iga ing he In e play o Pe sonal
Finance, Expendi u e Beha io ,
and Financial Managemen
Enkeleda Lulaj
Haxhi Zeka Uni e si y, Kosos o
Email: [email p o ec ed]
ORCID: h ps://o cid.o g/0000-0002-5325-3015
Abs ac . This pape in es iga ed he weal h puzzle by examining he ela ionships among pe sonal inance
(PF), expendi u e beha io (EB), and inancial managemen (FM). Da a om a di e se sample o 2000 indi-
iduals ac oss egions such as Koso o, Ghana, Kenya, Nige ia, Tu key, Pakis an, Nepal, Uganda, Came oon,
E hiopia, India, Indonesia, Albania, Oman, and Egyp we e collec ed h ough an online ques ionnai e om
2023 o 2024, and p ocessed h ough explo a o y and con i ma o y ac o analyses using AMOS and SPSS
p og ams. Resul s e ealed he obus ela ionships among PF, EB, and FM, indica ing hei esilience and
s ong in e nal consis ency, and unde sco ing hei pi o al ole in shaping indi iduals’ inancial s abili y and
well-being. No ably, EB eme ged as a c ucial de e minan , highligh ing he impo ance o aligning spending
habi s wi h amily p io i ies, mode a ing excesses, and consis en ly e iewing o imp o emen s. Mo eo e ,
c i ical a iables wi hin PF and FM unde sco ed he necessi y o s a egic inancial planning, e icien spend-
ing op imiza ion, and he cul i a ion o esilience agains un o eseen inancial obs acles. This esea ch has
signi ican ly ad anced he unde s anding o weal h dynamics and p o ided p ac ical insigh s o policymake s
and educa o s o design a ge ed inancial educa ion ini ia i es ha can imp o e inancial well-being and long-
e m p ospe i y. Fu u e esea ch should concen a e on unde s anding unde lying mechanisms and assessing
in e en ion e ec i eness ac oss mo e a iables and coun ies.
Keywo ds: Weal h Puzzle, Global Finance, Pe sonal Finance, Expendi u e Beha io , Financial Managemen
1. In oduc ion
The impo ance o unde s anding he in ica e dynamics o pe sonal inance (PF), expend-
i u e beha io (EB), and inancial managemen (FM) canno be o e s a ed. In oday’s
apidly e ol ing inancial en i onmen , cha ac e ized by globaliza ion and echnological
ad ances, his unde s anding is pa amoun o indi iduals and amilies s i ing o achie e
long- e m inancial s abili y and p ospe i y. In e ms o he meaning o he weal h puzzle,
acco ding o Wang (2023), he impo ance o p ese ing amily weal h is emphasized by
Recei ed: 26/04/2024. Re ised: 08/06/2024. Accep ed: 21/07/2024
Copy igh © 2024 Enkeleda Lulaj. Published by Vilnius Uni e si y P ess
This is an Open Access a icle dis ibu ed unde he e ms o he C ea i e Commons A ibu ion License, which pe mi s un es ic ed use,
dis ibu ion, and ep oduc ion in any medium, p o ided he o iginal au ho and sou ce a e c edi ed.
Con en s lis s a ailable a Vilnius Uni e si y P ess
Enkeleda Lulaj. C acking he Weal h Puzzle: In es iga ing he In e play o Pe sonal Finance, Expendi u e Beha io and Financial Managemen
123
signi ican ly p omo ing inno a ions b ough by amily weal h ha ha e a posi i e impac
on weal h. As emphasized by Zhao e al. (2023), amilies wi h high inancial li e acy a e
mo e inclined o in es in inancial asse s, highligh ing he co ela ion be ween inancial
managemen (FM), economic beha io (EB), and pe sonal inance (PF), which acili a es
he dis ibu ion o weal h wi hin ulne able amilies. Fu he mo e, Dash and Mohan a
(2024) emphasize ha an indi idual’s inancial awa eness and spending beha io ha e
a di ec impac on he sus ainable inancial and economic pe o mance o bo h amilies
and indi iduals. Simila ly, Wang e al. (2023) poin ou ha inancial managemen and
expendi u e beha io a e in luenced by a amily’s digi al capabili ies o inancial ans-
ac ions, wi h implica ions o weal h isk. In addi ion, Bake e al. (2024) emphasize ha
accu a e inancial managemen can lead o inc eased weal h and be e pe sonal inances
o amilies. Zeng and Yu (2024) emphasize ha amilies can inc ease hei weal h h ough
ca e ul inancial managemen and esponsible pe sonal inance decisions, pa icula ly o
amilies engaged in wo k, unde lining he impo ance o hese decisions in hei inancial
ou comes. Siegel and Thale (1997) highligh he ongoing necessi y o u he esea ch on
he weal h puzzle. They unde line ha i an empi ical esul is challenging o a ionalize,
i quali ies as an anomaly, indica ing he need o con inued in es iga ion.
Thus, he no el y o his pape lies in i s comp ehensi e examina ion o he in ica e
ela ionships among pe sonal inance (PF), expendi u e beha io (EB), and inancial
managemen (FM), explo ing hei global dimensions beyond adi ional app oaches.
While p e ious s udies ha e highligh ed he impo ance o indi idual componen s such
as inancial li e acy o spending beha io , his pape in eg a es hese elemen s in o a ho-
lis ic amewo k o e eal he unde lying pa e ns and dynamics ha shape indi iduals’
inancial ou comes. The pu pose o his pape is wo old: i s , o unco e he unde lying
pa e ns and dynamics ha shape indi iduals’ inancial well-being and weal h accumu-
la ion; second, o p o ide insigh s ha in o m s a egies o imp o ing inancial li e acy,
op imizing spending habi s, and implemen ing e ec i e inancial managemen p ac ices.
The esea ch ques ions guiding his s udy a e: How do PF, EB, and FM in e ac o in luence
indi iduals’ inancial well-being and weal h accumula ion? And wha a e he implica ions
o hese indings o policymake s, inancial ins i u ions, and indi iduals seeking o im-
p o e inancial li e acy and p omo e long- e m inancial s abili y? By add essing hese
esea ch ques ions, his pape aims o con ibu e o a deepe unde s anding o he weal h
puzzle and p o ide ac ionable insigh s o p omo ing inancial esilience and p ospe i y
in an inc easingly complex and dynamic en i onmen .
2. Re iew o li e a u e and hypo hesis de elopmen
2.1. C acking he weal h puzzle h ough pe sonal inance,
spending, and inancial managemen
The in ica e in e play be ween pe sonal inance (PF), expendi u e beha io (EP), and
inancial managemen (FM) has a signi ican impac on he daily li es o households
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wo ldwide. Unde s anding hese dynamics is c ucial o na iga ing he complexi ies o
he mode n inancial en i onmen and p omo ing long- e m inancial well-being. A com-
p ehensi e li e a u e e iew will del e in o exis ing esea ch o elucida e he mul i ace ed
ela ionships among hese ac o s and shed ligh on hei implica ions o household
inancial s abili y, weal h accumula ion, and economic esilience. Ola sson and Pagel
(2024) emphasized ha he weal h puzzle is abou ansac ion le els (PF, EB, and FM),
which documen ha indi iduals pay o hei deb s and sa e mo e a e e i emen , educe
spending om pe sonal inances, and make e ec i e inancial managemen o he puzzle
weal h (pension consump ion, pension sa ings).
Thus, ega ding he (PF, EXP, and FM) ac o s, Louhaichi e al. (2016) emphasize ha
inancial incen i es om he s a e in he o m o paymen s o amilies inc ease inancial
s abili y and imp o e hei well-being and puzzle weal h. Addi ionally, Liu e al. (2024)
emphasized ha inancial knowledge o pe sonal inance inc eases inancial s abili y and
weal h h ough inancial managemen and he accu a e expendi u e beha io , which helps o
educe inancial s ess. Fu he mo e, Abokyi e al. (2024) emphasized ha co ec spending
beha io and inancial managemen in luence heal hy consump ion o indi iduals and
amilies. Çelik and Doğan (2024) emphasize he exis ence o a posi i e and s a is ically
signi ican ela ionship be ween clima e policy unce ain y and economic g ow h, which
in u n a ec s he well-being o he popula ion. Fu he mo e, Lulaj (2024) hen highligh s
he complex ela ionships be ween money, clima e change, sus ainable inance and con-
sume spending pa e ns, emphasizing he need o add ess he gap be ween expec ed and
desi ed spending alues o he global economy in ansi ion economies. Acco ding o
Al unöz (2024), i is emphasized ha he e is a long- e m ela ionship be ween unemploy-
men a iables in mos OECD coun ies ha a ec he pe sonal inances o indi iduals
and amilies. Philippe (1989) examines how nonexpec ed u ili y p e e ences a ec asse
p icing. Despi e elaxing adi ional cons ain s, he s udy ails o esol e he Meh a–
P esco equi y p emium puzzle. Ins ead, i in oduces a new puzzle – he isk- ee a e
puzzle – aising ques ions abou why he isk- ee a e emains low despi e agen s’ s ong
a e sion o in e empo al subs i u ion. In addi ion, Ingale and Palu i (2022), emphasized
ha inancial educa ion and inancial beha io ha e de eloped o e a pe iod o ime as
an in e disciplina y ield ocused on he demog aphic and socioeconomic de e minan s
o coun ies, p o iding insigh s in o he cons uc ion o hypo heses.
2.2. Hypo hesis de elopmen
P elimina y esea ch on he weal h puzzle has been conduc ed in o he s udies, as highligh -
ed in he in oduc ion and li e a u e e iew. This sec ion elabo a es on he weal h puzzle
h ough h ee ac o s: pe sonal inance (PF), expendi u e beha io (EB), and inancial
managemen (FM), which a e c ucial o indi iduals and amilies. Acco ding o Pulina
(2024), he accumula ion o liquid asse s and c edi ca d deb in eu o-a ea coun ies has
a signi ican impac on pe sonal inance, spending beha io , and inancial managemen .
This unde lines he di ec link be ween PF and FM, as asse and deb managemen a ec
o e all inancial heal h and s abili y.
Enkeleda Lulaj. C acking he Weal h Puzzle: In es iga ing he In e play o Pe sonal Finance, Expendi u e Beha io and Financial Managemen
125
The e o e, he ollowing hypo hesis is p oposed:
Hypo hesis 1: The e is a signi ican posi i e ela ionship be ween pe sonal inance and
inancial managemen in he con ex o c acking he weal h puzzle.
Hong (2022) sugges s examining he weal h puzzle h ough he capi al p emium wi h
ansac ion cos s, highligh ing he impo ance o expendi u e beha io in inancial deci-
sion-making. Goyal e al. (2021) u he emphasize ha demog aphic, socioeconomic,
psychological, social, cul u al, inancial li e acy and echnological ac o s in luence he
ela ionships be ween PF, EB, and FM. These indings sugges ha expendi u e beha io
and inancial managemen a e deeply in e connec ed.
Hence, he nex hypo hesis is p oposed:
Hypo hesis 2: The e is a signi ican posi i e ela ionship be ween expendi u e beha io
and inancial managemen in he con ex o c acking he weal h puzzle.
Wong e al. (2023) highligh ha di e ences among amilies due o inancial knowledge,
which includes inancial managemen and spending beha io , po en ia e he ela ionship
be ween EB and PF. Nyaku ukwa and See ha am (2024) a gue ha inc eased inancial
li e acy boos s indi iduals’ well-being and weal h, enhancing he impo ance o FM and
PF. Xiao e al. (2021) ind ha deb is nega i ely ela ed o happiness, unde lining he
ela ionship be ween EB and FM. These s udies unde sco e he in e connec edness o
spending beha io and pe sonal inance.
The e o e, he ollowing hypo hesis is p oposed:
Hypo hesis 3: The e is a signi ican posi i e ela ionship be ween expendi u e beha io
and pe sonal inance in he con ex o c acking he weal h puzzle.
Fu he mo e, Kachepa and Mum az (2023) indica e ha FM and sa ings-o ien ed EB
a e signi ican ly in luenced by inc easing income, educa ion, and age. Gambaco a e al.
(2021) ind ha la ge segmen s o he popula ion in Eu opean coun ies su e economically
om aus e i y measu es, a ec ing PF, FM, and EB. Kukk (2017) inds ha highe amily
esponsibili ies a e associa ed wi h lowe inancial asse holdings, a ec ing PF and FM.
Singh and Malik (2022) sugges ha highe inancial li e acy, be e money managemen
skills, and less impulsi eness in inancial beha io educe inancial ulne abili y. They
ecommend inancial educa ion p og ams o imp o e inancial li e acy and managemen
skills, he eby linking PF, FM, and EB. Ca dona-Mon oya (2022) asse s ha indi iduals
wi h mo e inancial educa ion a e be e equipped o deal wi h nega i e inancial impac s,
he eby educing inancial ulne abili y and s ess.
D awing upon insigh s om exis ing li e a u e, hypo heses we e o mula ed, bols e ing
he heo e ical amewo k o his esea ch. This p ocess es ablishes a obus g oundwo k
o in es iga e he in e connec ions be ween pe sonal inance (PF), expendi u e beha io
(EB), and inancial managemen (FM) wi hin he o e a ching con ex o he weal h puzzle.
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Figu e 1. Concep ual Model
Figu e 1 depic s he concep ual model aimed a c acking he weal h puzzle by in es-
iga ing he in e ac ions among pe sonal inance (PF), expendi u e beha io (EB), and
inancial managemen (FM). Following his concep ual amewo k, he u iliza ion o
Explo a o y Fac o Analysis (EFA) and Con i ma o y Fac o Analysis (CFA) is pi o al
o de eloping and cons uc ing hypo heses (H1: PF<--> FM; H2: EB<-->FM; and H3:
EB<-->PF) ha sugges speci ic ela ionships among he ac o s. H1 implies a ela ionship
be ween PF and FM, indica ing ha s ong pe sonal inance habi s may lead o e ec i e
inancial managemen s a egies and ice e sa. Simila ly, H2 and H3 p opose ela ion-
ships be ween EB, FM, and PF, espec i ely, shedding ligh on he in e connec edness
o hese ac o s. In summa y, he concep ual model and he hypo heses de i ed om i
p o ide a model o unde s anding o he in ica e ela ionships be ween pe sonal inance,
expendi u e beha io , and inancial managemen , con ibu ing o he b oade goal o
un a eling he weal h puzzle.
3. Me hodology
3.1. The pu pose o he pape
I is aimed a c acking he weal h puzzle h ough he in e play o h ee ac o s: pe sonal
inance, expendi u e beha io , and inancial managemen among indi iduals and amilies
in di e en coun ies. The e o e, he pu pose o his pape is o c ack he weal h puzzle
by in es iga ing he ela ionships be ween pe sonal inance (PF), expendi u e beha io
(EB), and inancial managemen (FM). By del ing in o he in e play o hese ac o s (PF,
EB, and FM), he pape seeks o unco e he unde lying pa e ns, dynamics, and impli-
ca ions ha shape indi iduals’ inancial well-being and weal h accumula ion wo ldwide.
So, h ough his esea ch, amilies and indi iduals can imp o e hei inancial li e acy,
op imize hei spending habi s, and implemen e ec i e inancial managemen s a egies.
Ul ima ely, hese e o s aim o os e long- e m inancial s abili y and p ospe i y in a
dynamic en i onmen .
3.2. Da a collec ion
The da a unde wen explo a o y ac o ial analysis (EFA) and i s associa ed es s. As ad o-
ca ed by Wa kins (2018), i is an impo an mul i a ia e s a is ical echnique used o de elop
Enkeleda Lulaj. C acking he Weal h Puzzle: In es iga ing he In e play o Pe sonal Finance, Expendi u e Beha io and Financial Managemen
127
and alida e esea ch heo ies and measu es. EFA, a widely u ilized s a is ical me hod
ac oss a ious disciplines including economics and eliabili y analysis, was chosen o i s
e icacy. Mo eo e , employing Con i ma o y Fac o Analysis (CFA) en ails es ablishing
ela ionships be ween cons uc s ia S uc u al Equa ion Modeling (SEM) Sh es ha e
al. (2023) ac oss he h ee ac o s (PF, EB, and FM). Acco ding Phaki i (2018), CFA and
SEM a e s a is ical me hodologies employed by esea che s o examine hypo heses o
heo ies in a mul i a ia e con ex . S uc u al equa ion modeling (SEM) inds widesp ead
applica ion in he analysis o such da a o he ac o s o pe sonal inance, expendi u e
beha io , and inancial managemen . Fu hemo e, Yuan e al. (2017), he Compa a i e Fi
Index (CFI) gauges he enhancemen in i when ansi ioning om he baseline model o
he p oposed model (PF, EB, and FM).
𝐶𝐶𝐶𝐶𝐶𝐶=1−𝐹𝐹𝑘𝑘
𝐹𝐹𝑜𝑜 (1)
𝐶𝐶𝐶𝐶𝐶𝐶
=𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚0
2−ⅆ𝑓𝑓0,0)−𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚𝑘𝑘
2−ⅆ𝑓𝑓𝑘𝑘,0)
𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚1
2−ⅆ𝑓𝑓0,0) (2)
𝐶𝐶𝐶𝐶𝐶𝐶=1−[[ (𝑚𝑚2−ⅆ𝑓𝑓),0]
[(𝑚𝑚2−ⅆ𝑓𝑓) ,(𝑚𝑚2𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛−ⅆ𝑓𝑓𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛),0]] 3) Shi e al. (2019b)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅=√𝐹𝐹𝑘𝑘
ⅆ𝑓𝑓𝑘𝑘 (3) Shi e al. (2019c)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
=√( 𝑚𝑚2−ⅆ𝑓𝑓,0)
ⅆ𝑓𝑓(𝑁𝑁−1) (4) Shi e al. (2019d)
(1)
He e, FK and F0 deno e he minimum alue o a ce ain disc epancy unc ion o he
p oposed model and he baseline model, espec i ely. Shi e al. (2019a)
𝐶𝐶𝐶𝐶𝐶𝐶=1−𝐹𝐹𝑘𝑘
𝐹𝐹𝑜𝑜 (1)
𝐶𝐶𝐶𝐶𝐶𝐶
=𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚0
2−ⅆ𝑓𝑓0,0)−𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚𝑘𝑘
2−ⅆ𝑓𝑓𝑘𝑘,0)
𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚1
2−ⅆ𝑓𝑓0,0)
(2)
𝐶𝐶𝐶𝐶𝐶𝐶=1−[[ (𝑚𝑚2−ⅆ𝑓𝑓),0]
[(𝑚𝑚2−ⅆ𝑓𝑓) ,(𝑚𝑚2𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛−ⅆ𝑓𝑓𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛),0]] 3) Shi e al. (2019b)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅=√𝐹𝐹𝑘𝑘
ⅆ𝑓𝑓𝑘𝑘 (3) Shi e al. (2019c)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
=√( 𝑚𝑚2−ⅆ𝑓𝑓,0)
ⅆ𝑓𝑓(𝑁𝑁−1) (4) Shi e al. (2019d)
(2)
He e, (x2
0 ) and (d 0) indica e he chi-squa e s a is ic and deg ees o eedom o he baseline
model, while (x2
k ) and (d k) ep esen he chi-squa e s a is ic and deg ees o eedom o
he pos ula ed model, espec i ely. The Compa a i e Fi Index (CFI) se es as a no mal-
ized i index, anging om 0 o 1, whi h highe alues signi ying a be e i . A widely
accep ed benchma k o a sa is ac o y i is a CFI ≥ .95. Shi e al. (2019)
Howe e , he ange be ween 0.05 and 0.08 shows he mos desi able esul , p o id-
ing he bes i . In addi ion, he CFI (Compa a i e Fi Index) is no only less a ec ed by
sample size, bu is also based on compa ing he hypo hesized model o he null model
(Xia and Yang, 2019)
𝐶𝐶𝐶𝐶𝐶𝐶=1−𝐹𝐹𝑘𝑘
𝐹𝐹𝑜𝑜 (1)
𝐶𝐶𝐶𝐶𝐶𝐶
=𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚0
2−ⅆ𝑓𝑓0,0)−𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚𝑘𝑘
2−ⅆ𝑓𝑓𝑘𝑘,0)
𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚1
2−ⅆ𝑓𝑓0,0) (2)
𝐶𝐶𝐶𝐶𝐶𝐶=1−[[ (𝑚𝑚2−ⅆ𝑓𝑓),0]
[(𝑚𝑚2−ⅆ𝑓𝑓) ,(𝑚𝑚2𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛−ⅆ𝑓𝑓𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛),0]] 3) Shi e al. (2019b)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅=√𝐹𝐹𝑘𝑘
ⅆ𝑓𝑓𝑘𝑘 (3) Shi e al. (2019c)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
=√( 𝑚𝑚2−ⅆ𝑓𝑓,0)
ⅆ𝑓𝑓(𝑁𝑁−1) (4) Shi e al. (2019d)
(3) Shi e al. (2019b)
The RMSEA quan i ies he disc epancy a ibu ed o app oxima ion pe deg ee o
eedom in he ollowing manne :
𝐶𝐶𝐶𝐶𝐶𝐶=1−𝐹𝐹𝑘𝑘
𝐹𝐹𝑜𝑜 (1)
𝐶𝐶𝐶𝐶𝐶𝐶
=𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚0
2−ⅆ𝑓𝑓0,0)−𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚𝑘𝑘
2−ⅆ𝑓𝑓𝑘𝑘,0)
𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚1
2−ⅆ𝑓𝑓0,0) (2)
𝐶𝐶𝐶𝐶𝐶𝐶=1−[[ (𝑚𝑚2−ⅆ𝑓𝑓),0]
[(𝑚𝑚2−ⅆ𝑓𝑓) ,(𝑚𝑚2𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛−ⅆ𝑓𝑓𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛),0]] 3) Shi e al. (2019b)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅=√𝐹𝐹𝑘𝑘
ⅆ𝑓𝑓𝑘𝑘
(3) Shi e al. (2019c)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
=√( 𝑚𝑚2−ⅆ𝑓𝑓,0)
ⅆ𝑓𝑓(𝑁𝑁−1) (4) Shi e al. (2019d)
(3) Shi e al. (2019c)
He e, (Fk) ep esen s he minimum alue o a pa icula disc epancy unc ion be ween
he popula ion co a iance ma ix (Σ) and he model-implied co a iance ma ix (Σ0) o
he hypo hesized model. The es ima ed RMSEA om he sample is de ined as ollows:
𝐶𝐶𝐶𝐶𝐶𝐶=1−𝐹𝐹𝑘𝑘
𝐹𝐹𝑜𝑜 (1)
𝐶𝐶𝐶𝐶𝐶𝐶
=𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚0
2−ⅆ𝑓𝑓0,0)−𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚𝑘𝑘
2−ⅆ𝑓𝑓𝑘𝑘,0)
𝑚𝑚𝑚𝑚𝑚𝑚(𝑚𝑚1
2−ⅆ𝑓𝑓0,0) (2)
𝐶𝐶𝐶𝐶𝐶𝐶=1−[[ (𝑚𝑚2−ⅆ𝑓𝑓),0]
[(𝑚𝑚2−ⅆ𝑓𝑓) ,(𝑚𝑚2𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛−ⅆ𝑓𝑓𝑛𝑛𝑛𝑛𝑛𝑛𝑛𝑛),0]] 3) Shi e al. (2019b)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅=√𝐹𝐹𝑘𝑘
ⅆ𝑓𝑓𝑘𝑘 (3) Shi e al. (2019c)
𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅𝑅
=√( 𝑚𝑚2−ⅆ𝑓𝑓,0)
ⅆ𝑓𝑓(𝑁𝑁−1)
(4) Shi e al. (2019d)
(4) Shi e al. (2019d)
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3.3. Da a collec ion
The da a was collec ed om a di e se sample o (n=2000) indi iduals who olun a ily
pa icipa ed in an online ques ionnai e om July 2023 o Feb ua y 2024. Rep esen ing
a ious egions including Koso o, Ghana, Kenya, Nige ia, Tu key, Pakis an, Nepal,
Uganda, Came oon, E hiopia, India, Indonesia, Albania, Oman, and Egyp , hese amilies
con ibu ed o he s udy. This di e se ep esen a ion ensu es a comp ehensi e examina ion
o he weal h puzzle. Pa icipan s we e assu ed o he con iden iali y o hei esponses
and in o med o he pu pose o he esea ch. They pa icipa ed olun a ily, ecognizing
he s udy’s goal o explo ing sus ainable inancial p ac ices h ough he in e play o PF,
EB, and FM. Responses we e collec ed using a Like scale anging om 1 (s ongly
disag ee) o 5 (s ongly ag ee).
Table 1. De ini ion and desc ip ion o he s udy a iables
Code I ems Sou ce
EB1
EB2
EB3
EB4
EB5
EB6
EB7
EB8
EB9
EB10
EB11
EB12
EB13
Expendi u e Beha io (EB)
Randazzo
and
Pi acha
(2019)
Basu
(2021)
Con iden in e ec i ely managing amily expendi u es
Ca e ully plan and budge o amily expendi u es mon hly
Conside amily expendi u es easonable ela i e o income
P io i ize essen ial needs in amily spending
Reduce unnecessa y expendi u es o imp o e budge managemen
Sa is ied wi h he dis ibu ion o amily expenses ac oss ca ego ies
Family spending habi s align wi h alues and p io i ies
Adjus amily spending o ma ch changes in income o ci cums ances
Belie e amily spending is con olled and no excessi e
Ensu e ai dis ibu ion o amily expendi u es among membe s
Regula ly e iew amily spending o imp o emen oppo uni ies
Main ain anspa ency in discussing household expenses
Ensu e household expendi u es align wi h needs
PF1
PF2
PF3
PF4
PF5
PF6
PF7
PF8
PF9
Pe sonal Finance (PF)
Xiao
and Tao
(2021)
Mahdzan
e al.
(2023)
Household expenses acked egula ly o moni o spending pa e ns
Household expenses allow o u u e sa ings wi hou sac i icing essen ials
Family expenses compa e a o ably o o he s in simila si ua ions
Family spending aligns wi h long- e m inancial goals.
Family expenses op imized o inc ease sa ings
Com o able balance be ween co e and disc e iona y spending in he budge
Household expenses suppo a com o able s anda d o li ing
Con idence in he abili y o handle unexpec ed inancial challenges ela ed o
expenses
Household expenses adjus ed o accommoda e changes in income o inancial
goals
Enkeleda Lulaj. C acking he Weal h Puzzle: In es iga ing he In e play o Pe sonal Finance, Expendi u e Beha io and Financial Managemen
129
Code I ems Sou ce
FM1
FM2
FM3
FM4
FM5
FM6
FM7
Financial Managemen (FP)
Zeh a and
Singh
(2023)
Yu e al.
(2023)
Conce ned abou ising cos s a ec ing household expenses
Conce ned abou in la ion impac ing household expenses
P oud o budge adhe ence and esponsible expense managemen
Wo ied abou unexpec ed expenses b eaking he budge
Belie e household expenses a e in luenced by ex e nal ac o s
Wo ied abou deb bu den om amily expenses
S essed abou expenses exceeding he budge
Sou ce: P epa ed by he au ho (2024).
Table 1 p esen s he desc ip ion o he a iables ela ed o c acking he weal h puzzle
in he con ex o in es iga ing he in e play be ween pe sonal inance (PF), expendi u e
beha io (EB), and inancial managemen (FP). Th ough explo a o y ac o analysis, h ee
main ac o s we e c ea ed: PF(1-9), EB(1-13), and FM(1-7) ac o s wi h hei a iables.
4. Resul s and discussions
In oday’s dynamic economic and inancial en i onmen , cha ac e ized by apid globali-
za ion, echnological ad ances, and shi ing socioeconomic pa adigms, unde s anding he
in icacies o pe sonal inance, expendi u e beha io , and inancial managemen is mo e
impo an han e e . Zhao e al. (2024) emphasized ha he weal h puzzle h ough pe sonal
inance, expendi u e beha io , and inancial managemen means choosing he puzzle o
isk- ee a es h ough C-CAPM (Consump ion Capi al Asse P icing Model). Smed e
al. (2022) ound no e idence o suppo a pension ( ood) consump ion puzzle. Acco ding
o (Bacche a and Wincoop, 2021), c acking he weal h puzzle h ough (PF, EB, and FM)
is ela ed o in e es a es and exchange a es o amilies by po en ia ing he puzzle o
delayed excess, he puzzle o o wa d discoun ing, he puzzle o e u n p edic abili y, he
puzzle o high in e es a es, he puzzle o discoun ing. Mo eo e , as indi iduals na iga e
an inc easingly complex inancial e ain, he abili y o make in o med decisions abou
sa ings, in es men s, and consump ion pa e ns becomes pa amoun o secu ing inan-
cial well-being by imp o ing he e iciency o in o ma ion dissemina ion and enhancing
inancial pa icipa ion (Li and Sui, 2023). In summa y, while he discussion p o ides a
comp ehensi e heo e ical amewo k and explo es he mul i ace ed na u e o indi idual
inancial decisions, i would bene i om a mo e obus examina ion o he p ac ical
economic implica ions. By elucida ing how heo e ical concep s ansla e in o ac ion-
able s a egies o indi iduals, he esea ch can imp o e i s ele ance and applicabili y
in add essing eal-wo ld inancial challenges. As such, he ollowing indings p o ide a
de ailed analysis o he p ac ical economic implica ions o he esea ch indings and o e
insigh s o indi iduals seeking o na iga e he complexi ies o weal h accumula ion in
a globalized wo ld. Fo his eason, he ollowing sec ion p esen s de ailed esul s and
discussion o each o he h ee ac o s.
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136
Pe sonal Finance (PF), he in e cep (B) is es ima ed a 3.483, wi h a scale coe icien o
0.928. So, his ela ionship is s a is ically signi ican (p = 0.000), wi h a Wald Chi-Squa e
s a is ic o 2615.020. Fu he mo e, ega ding he in e ela edness o (EB, FM, and FP)
ac o s, i is emphasized ha he in e cep , which indica es he expec ed alue when o he
a iables a e ze o, is 3.498, s a is ically signi ican (p = 0.000). The scale coe icien is
0.760, indica ing he e ec o he p edic o a iables on he combined ac o . The na ow
con idence in e als and he signi ican Wald Chi-Squa e s a is ic (3221.181, d = 1, p =
0.000) con i m he s abili y and obus ness o he model. The e o e, hese esul s indica e
ha all h ee ac o s – EB, FM, and PF – a e signi ican ly associa ed wi h hei espec i e
p edic o a iables. The con idence in e als p o ide u he insigh in o he p ecision o
hese es ima es, wi h na ow in e als sugges ing highe p ecision. O e all, hese indings
s eng hen ou unde s anding o he ela ionships be ween hese ac o s and p o ide a
obus ounda ion o u he analysis and in e p e a ion wi hin he con ex o he model.
Table 6. Robus ness Checks and Sensi i i y Analyses
Pa ame e Es ima es
Fac o s Pa ame e B S d.
E o
95% Wald
Con idence In e al Hypo hesis Tes
Lowe Uppe Wald Chi-
Squa e d Sig.
EB (In e cep ) 3.678 0.0674 3.546 3.810 2977.486 10.000
(Scale) 0.909a0.0909 0.747 1.105
FM (In e cep ) 3.334 0.0696 3.197 3.470 2293.074 10.000
(Scale) 0.969a0.0969 0.797 1.179
PF (In e cep ) 3.483 0.0681 3.350 3.617 2615.020 10.000
(Scale) 0.928a0.0928 0.763 1.129
C acking_ he_
Weal h_Puzzle
(In e cep ) 3.498 0.0616 3.378 3.619 3221.181 10.000
(Scale) 0.760a0.0760 0.625 0.924
No e: Dependen Va iable: EB, FM, PF; Model: (In e cep ); a. Maximum likelihood es ima e.
Table 7 p o ides s ong suppo o he ela ionship be ween EB, PF, and FM, con-
i ming he hypo heses and demons a ing an excellen model i . Each ac o (EB, PF, and
FM) plays a c ucial ole in c acking he weal h puzzle in he con ex o in es iga ing he
in e play o pe sonal inance (PF), expendi u e beha io (EB), and inancial managemen
(FP) and hei a iables. The posi i e and s a is ically signi ican associa ions be ween
hese ac o s emphasize hei in e dependence. The FIT model and pa h diag am analysis
u he con i m he signi ican ela ionships. The implica ions o hese indings ex end o
bo h p ac ical applica ions and u u e esea ch endea o s. P ac ically, policymake s and
inancial educa o s can u ilize hese insigh s o design a ge ed in e en ions and educa-
ional p og ams ha add ess he in e connec ed na u e o pe sonal inance, expendi u e
beha io , and inancial managemen . Fu u e s udies could del e deepe in o unde s anding
he mechanisms unde lying hese ela ionships, explo ing addi ional a iables ha may
Enkeleda Lulaj. C acking he Weal h Puzzle: In es iga ing he In e play o Pe sonal Finance, Expendi u e Beha io and Financial Managemen
137
in luence indi iduals’ inancial decisions, and conduc ing longi udinal esea ch o assess
he long- e m e ec i eness o in e en ions aimed a imp o ing inancial well-being.
Table 7. Ve i ica ion o hypo heses
Hypo -
heses Elabo a ion Tes s Rejec ed/
Accep ed Fu u e Resea ch /Implica ions
H1PF <--> FM Excellen Model Fi
C.I ≈99,9%, 0.90 ≥ α;
0.05≥λ
RMSEA, (90% CI), p=0.055
𝜒𝜒𝑀𝑀
2
, p=0.151, CFI=95%
Accep ed The indings ha e p ac ical impli-
ca ions o policymake s and edu-
ca o s o de elop a ge ed inancial
educa ion in e en ions. Fu u e ese-
a ch should ocus on unde s anding
unde lying mechanisms and assessing
in e en ion e ec i eness h ough
longi udinal s udies.
H2EB <--> FM Accep ed
H3EB <--> PF Accep ed
No e: p<0.001 (***); p<0.05 (**).CFA ***, EFA ***
5. Conclusions and u u e s udies
The pape del ed deep in o he in ica e dynamics ha in luenced indi iduals’ inancial
well-being and weal h accumula ion wo ldwide. Th ough me iculous examina ion o
he ela ionships among pe sonal inance (PF), expendi u e beha io (EB), and inancial
managemen (FM), he esea ch unco e ed hidden pa e ns and o e ed ac ionable s a e-
gies o boos inancial li e acy, e ine spending habi s, and implemen e ec i e inancial
managemen echniques. D awing on da a om a di e se sample o 2000 indi iduals
ac oss egions like Koso o, Ghana, Kenya, Nige ia, Tu key, Pakis an, Nepal, Uganda,
Came oon, E hiopia, India, Indonesia, Albania, Oman, and Egyp , he s udy explo ed he
nuances o PF, EB, and FM. Using explo a o y and con i ma o y ac o analyses, along
wi h eg ession and co ela ion analyses, he esea ch highligh ed he impo ance o hese
ac o s in decoding he weal h puzzle.
Resul s e ealed s ong associa ions among PF, EB, and FM, demons a ing hei e-
silience and high in e nal consis ency. Signi ican co ela ions unde sco ed hei cen al
ole in shaping indi iduals’ inancial s abili y and well-being. In pa icula , spending
beha io eme ged as a c i ical ac o , unde sco ing he need o align spending habi s
wi h amily p io i ies, cu b excesses, and egula ly e iew o imp o emen . The s udy
also highligh ed c i ical a iables wi hin PF and FM, unde sco ing he need o s a egic
inancial planning, op imizing spending, and building esilience o unexpec ed inancial
challenges. The obus ness o he FIT model u he alida ed he e ec i eness o he
p oposed amewo k in un a eling he complexi ies o he weal h puzzle.
5.1. Implica ions o p ac ice and policy
The implica ions o his esea ch ex end beyond academia, o e ing angible bene i s
o indi iduals, amilies, and policymake s alike. By del ing deeply in o he complex
dynamics o pe sonal inance (PF), expendi u e beha io (EB), and inancial manage-
men (FM), his s udy p o ides ac ionable s a egies o enhance inancial li e acy, e ine
ISSN 1392-1258 eISSN 2424-6166 Ekonomika. 2024, ol. 103(3)
138
spending habi s, and p omo e long- e m inancial s abili y. Fo indi iduals and amilies,
he indings o e p ac ical insigh s o op imize inancial decision-making. By aligning
spending habi s wi h pe sonal p io i ies and implemen ing e ec i e inancial managemen
echniques, indi iduals can s eng hen hei inancial well-being and lay he ounda ion o
u u e p ospe i y. Mo eo e , he emphasis on egula e iew and adap a ion encou ages a
p oac i e app oach o inancial planning, empowe ing indi iduals o na iga e un o eseen
challenges and capi alize on g ow h oppo uni ies.
A he policy le el, he esea ch unde lines he impo ance o in eg a ing inancial
educa ion ini ia i es in o na ional agendas. By inco po a ing inancial li e acy p og ams
in o school cu icula and adul educa ion ini ia i es, policymake s can equip ci izens wi h
he knowledge and skills necessa y o make in o med inancial decisions. Fu he mo e,
a ge ed in e en ions aimed a p omo ing esponsible spending beha io and os e ing a
cul u e o sa ings can help mi iga e he isk o inancial ins abili y and educe inequali ies
in weal h accumula ion.
Addi ionally, policymake s can le e age he insigh s gained om his s udy o design
e idence-based policies ha add ess sys emic ba ie s o inancial inclusion and esilience. By
expanding access o a o dable inancial se ices, pa icula ly in unde se ed communi ies,
go e nmen s can empowe ma ginalized popula ions o pa icipa e mo e ully in he o mal
economy and build asse s o e ime. Mo eo e , ini ia i es aimed a p omo ing inancial
planning and building esilience o economic shocks can help sa egua d indi iduals and
amilies agains un o eseen dis up ions, os e ing g ea e economic secu i y and s abili y.
In summa y, his esea ch unde sco es he p ac ical applica ions o unde s anding weal h
dynamics and o e s ac ionable s a egies o indi iduals, amilies, and policymake s o im-
p o e inancial well-being and p omo e long- e m p ospe i y. Inco po a ing hese insigh s in o
policy and p ac ice can build a mo e esilien and inclusi e inancial sys em ha empowe s
indi iduals o achie e hei inancial goals and aspi a ions. Howe e , i ’s impo an o no e
limi a ions such as sample size and egional ep esen a ion. Despi e his, he implica ions
a e subs an ial, aiding amilies in enhancing inancial li e acy. Fu u e s udies could explo e
cul u al in luences on inancial beha io o a mo e comp ehensi e unde s anding.
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APPENDIX – Scales Su ey
A. Expendi u e Beha io (EB)
No. Va iables
S ongly
Disag ee
(1)
Disag ee
(2)
Neu al
(3)
Ag ee
(4)
S ongly
Ag ee
(5)
1Con iden in e ec i ely managing amily expendi u es
2Ca e ully plan and budge o amily expendi u es mon hly
3Conside amily expendi u es easonable ela i e o income
4P io i ize essen ial needs in amily spending
5Reduce unnecessa y expendi u es o imp o e budge
managemen
6Sa is ied wi h he dis ibu ion o amily expenses ac oss
ca ego ies
7Family spending habi s align wi h alues and p io i ies
8Adjus amily spending o ma ch changes in income o
ci cums ances
9Belie e amily spending is con olled and no excessi e
10 Ensu e ai dis ibu ion o amily expendi u es among
membe s
11 Regula ly e iew amily spending o imp o emen
oppo uni ies
12 Main ain anspa ency in discussing household expenses
13 Ensu e household expendi u es align wi h needs
B. Pe sonal Finance (PF)
No. Va iables
S ongly
Disag ee
(1)
Disag ee
(2)
Neu al
(3)
Ag ee
(4)
S ongly
Ag ee
(5)
1Household expenses acked egula ly o moni o spending
pa e ns
2Household expenses allow o u u e sa ings wi hou
sac i icing essen ials
3Family expenses compa e a o ably o o he s in simila
si ua ions
4Family spending aligns wi h long- e m inancial goals.
5Family expenses op imized o inc ease sa ings
6Com o able balance be ween co e and disc e iona y
spending in he budge
7Household expenses suppo a com o able s anda d o
li ing
8Con idence in he abili y o handle unexpec ed inancial
challenges ela ed o expenses
9Household expenses adjus ed o accommoda e changes in
income o inancial goals
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D. Financial Managemen (FP)
No. Va iables
S ongly
Disag ee
(1)
Disag ee
(2)
Neu al
(3)
Ag ee
(4)
S ongly
Ag ee
(5)
1Conce ned abou ising cos s a ec ing household
expenses
2Conce ned abou in la ion impac ing household expenses
3P oud o budge adhe ence and esponsible expense
managemen
4Wo ied abou unexpec ed expenses b eaking he budge
5Belie e household expenses a e in luenced by ex e nal
ac o s
6Wo ied abou deb bu den om amily expenses
7 S essed abou expenses exceeding he budge
