Determinants of Financial Well-being of Individuals in Gampaha District, Sri Lanka

Amid heightened instability in developing economies in the aftermath of economic crises, understanding the determinants of individuals' financial well-being (FWB) has become a vitally important area of research. This study explores the key predictors of FWB among individuals living in Gampaha District, a region that has recently undergone notable socio-economic transitions. To capture the multifaceted nature of financial decision-making, the study synthesizes insights from the Consumer Financial Protection Bureau (CFPB) Model, Behavioral Finance Theory, and Social Learning Theory. Using a quantitative research approach, data were collected from 350 respondents via stratified random sampling with a structured questionnaire. The analysis focuses on the impact of financial literacy, financial behavior, financial risk tolerance, financial socialization, and financial stress on financial well-being. In testing the hypothesis, Multiple linear regression was employed. The findings indicate that financial socialization emerges as the most influential positive determinant of FWB, emphasizing the critical role of familial and peer-based learning in shaping financial outcomes. In contrast, financial stress exhibits a significant negative association with FWB, reflecting the adverse effects of psychological and emotional strain on financial stability. Further, the results underscore that financial well-being is shaped by an interplay of cognitive, behavioral, social, and emotional factors. Considering these findings, the study calls on policymakers to move beyond conventional financial literacy-focused programs to incorporate interventions that strengthen intergenerational financial socialization and provide psychological support. The study also highlights the importance of a holistic policy approach to enhancing financial resilience and promoting sustainable financial well-being amid ongoing economic uncertainty.