The Role of Financial Self-Efficacy in the Relationship Between Financial Literacy and Emergency Fund Preparedness
DOI:
https://doi.org/10.69569/jip.2026.243Keywords:
Emergency fund preparedness, Financial literacy, Financial self efficacy, Mediation analysis, Minimum-wage earnersAbstract
Despite the established relationship between financial literacy and emergency fund preparedness, limited studies have examined the psychological mechanisms through which financial knowledge influences preparedness, particularly among minimum-wage earners in the Philippine context. This study examined the role of financial self-efficacy in the relationship between financial literacy and emergency fund preparedness among minimum-wage earners in Davao del Sur. Using a quantitative descriptive-correlational design with mediation analysis, the researchers collected data from 200 respondents employed in various commercial establishments through purposive and quota sampling. A structured questionnaire measured financial literacy, financial self-efficacy, and emergency fund preparedness. The study used descriptive statistics, Pearson Product-Moment Correlation, and bootstrapping mediation analysis to analyze the data. Results showed that respondents demonstrated high financial literacy (M = 3.59, SD = 0.61) and financial self-efficacy (M = 3.48, SD = 0.72), while emergency fund preparedness was moderate (M = 3.30, SD = 0.80). Financial literacy was significantly associated with emergency fund preparedness (r = .498, p < .001) and financial self-efficacy (r = .519, p < .001). Likewise, financial self-efficacy showed a significant positive relationship with emergency fund preparedness (r = .649, p < .001). Mediation analysis further revealed that financial self-efficacy partially mediated the relationship between financial literacy and emergency fund preparedness, as evidenced by a significant direct effect (β = .220, p < .001) and indirect effect (β = .277, p < .001). The findings indicate that financial literacy enhances emergency fund preparedness both directly and indirectly by strengthening individuals’ confidence in managing their finances. These results highlight the importance of integrating financial capability-building initiatives with interventions that enhance financial self-efficacy to improve the financial resilience of minimum-wage earners.
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