Psychological Factors Influence On Financial Vulnerability: A Conceptual Paper

Abstract

The recent financial and economic crisis highlights a worsening in the economics and financial situation of household to deals with debt burden, financial distress and unexpected expenses. In the context of increasing rising poverty and social inclusion a discussion on this phenomenon is required in order to identify the major factor may influence individual financial vulnerability which cause inability to assess and make effective decision regarding personal finances. This is library research where content analysis method was applied. This paper aims to identify the elements of psychological factors and its influence on financial vulnerability and proposes a conceptual model to further understand the area of research context. Besides, this paper then develop into concrete research hypotheses for future studies. Findings and discussion will serve as a useful guideline to develop comprehensive understanding on major factors related to financial vulnerability among individual especially in Malaysia. In addition, this study can be a platform and source of reference for others to propose an indicator to overcome the issues of financial vulnerability and reduce financial fragility.