Financial Behavior, Income, and Self-Control in Investment Decisions: The Moderating Role of Financial Literacy

Abstract

This study aimed to examine the effects of financial behavior, income, and self-control on investment decisions, with financial literacy as a moderating variable among the workforce in Kupang City. A quantitative approach was employed using primary data collected through questionnaires from 400 respondents selected through purposive sampling, and the data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results showed that financial behavior, income, and self-control had positive and significant effects on investment decisions, while financial literacy also had a significant direct effect but did not moderate the relationships between the independent variables and investment decisions. These findings indicated that investment decision-making was influenced more by behavioral and psychological factors than by financial knowledge alone. The study concluded that improving investment decisions required not only enhancing financial literacy but also strengthening financial discipline and self-control. However, the study was limited to a specific regional context and relied on self-reported data. This research contributed to the literature by integrating economic, behavioral, and psychological perspectives in explaining investment decisions.

Keywords

Behavioral Finance Financial Behavior Financial Literacy Income Investment Decisions Self-Control