Analysis of key factors influencing individual financial well-being using ISM and MICMAC approach

A growing complexity in the financial world has attracted the interest of academicians and policymakers to examine the financial planning and well-being of individuals. This study attempts to explore the individual level determinants for improving financial well-being. Based upon the literature review, key enablers of individual financial well-being were identified which were then finalized by incorporating expert suggestions. Pursuant to this, six levels hierarchical structure was developed with the application of interpretive structural modeling (ISM) technique. Next, Matriced'ImpactsCroises Multiplication Appliques a un Classement (MICMAC) analysis was applied to determine the dependence and driving power of the identified variables. Our findings demonstrate that socio-economic factors and financial socialization are placed at the bottom level in the ISM hierarchy and all of them are also found to have the highest driving power under the MICMAC classification. On the other hand, healthy financial behaviors emerge on the top level and have the highest dependence power. The results of the study can provide valuable insights to financial educators and policymakers in terms of a better understanding of individual level enablers and their interrelationships. The knowledge of the importance of each enabler can enhance their capability to formulate improved strategies focused on securing the financial future of individuals. The concern of living a financially secured life is growing in a world full of economic uncertainties. Individual differences play a vital role in achieving a higher level of financial well-being. This study is one of the preliminary attempts to identify the individual level factors and rank them according to importance.