Psychological needs and financial well-being: the role of consumer spending self-control

Abstract

Financial service providers continually strive to develop innovative financial products and services that address customer needs and aim to improve customers’ financial well-being. Previous studies discovered that psychological need satisfaction is positively associated with psychological well-being and growth, while psychological need frustration is associated with problematic behaviour and ill-being. However, uncertainty still exists as to whether psychological needs are associated with financial well-being. Furthermore, whereas psychological need satisfaction is associated with positive day-to-day behaviours such as exhibiting self-control, psychological need frustration has been associated with irresponsible spending. Spending can be a psychological coping mechanism, and as such, the regulation of spending behaviour may aid financial well-being. Therefore, the main purpose of this article is to explore the relationship between psychological needs and financial well-being, and to assess whether consumer spending self-control can act as a regulating mechanism in this relationship. Data were collected by means of a self-administered questionnaire distributed via an online paid-for consumer panel to credit-active South African consumers. The results revealed that CSSC had a mediating effect on the relationships between psychological needs and financial well-being. This highlights the importance of developing and promoting consumer spending self-control as a strategy for financial well-being.