Effect of Money Psychology on Financial Decision-Making Behavior among Employees in Public and Private sector Institutions in Rwanda
Mfitiryayo Jean de Dieu – Department of Development Studies and International Relations, School of Social Sciences, Kigali Independent University ULK, Kigali, Rwanda
Sibomana Providence – Department of Rural Development, Faculty of Business and Development Studies, Kibogora Polytechnic KP, Nyamasheke, Rwanda
Fred K. Wamalwa – Department of Development Studies, Faculty of Arts and Social Sciences, Catholic University of Eastern Africa, Nairobi, Kenya
Email: mfitiryayo@gmail.com
Abstract: Financial decision-making has become increasingly complex due to changing economic conditions, expanding consumer credit, and digital financial transformation, yet poor financial outcomes persist despite stable incomes and improved access to financial services. This study examined the effects of money attitudes, financial self-control, financial anxiety, and financial confidence on financial decision-making behavior among employees in public and private sector institutions in Rwanda, while assessing the moderating role of financial literacy. Guided by Money Attitude Theory, Self-Control Theory, Behavioral Life-Cycle Theory, and the Theory of Planned Behavior, the study adopted a quantitative cross-sectional design targeting 650 employees using a census approach stratified by public and private sectors. Data were collected through a structured five-point Likert-scale questionnaire and analyzed using SPSS version 28. Descriptive statistics, Pearson correlation, multiple regression, and mean-centered moderated regression were employed. Results showed that the four money-psychology dimensions significantly and positively predicted financial decision-making behavior, jointly explaining 55.4% of its variance (R² = .554, F(4, 645) = 200.50, p < .001). Financial confidence was the strongest predictor (β = .488), followed by financial self-control (β = .184), financial anxiety (β = .135), and money attitudes (β = .130), all significant at p < .001. Financial literacy significantly moderated all four relationships, with modest negative interaction effects. All five null hypotheses were rejected. The studyrecommends interventions to strengthen financial confidence and self-control, promote constructive money attitudes, address financial anxiety, and enhance financial literacy.
8 Replies to “Effect of Money Psychology on Financial Decision-Making Behavior among Employees in Public and Private sector Institutions in Rwanda”
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Your topic”Effect of money psychology on financial decision making Behavior among Employees in public and private sector institutions in Rwanda” is a good and relevant research topic , especially in fields of finance, economics, business,and psychology. This topic is relevant and important because it addresses how people’s psychological attitudes to ward money can influence how they make financial decision,such as saving, spending, borrowing and investing.
In this century the life has become expensive. Where an expenditure is more than income.
This research is very important because most people are not satisfied. Expenditure is more than income
Exllent
The topic is relevant, clear, and researchable because it examines how employees’ psychological attitudes and perceptions toward money influence the way they make financial decisions. It addresses an important issue in Rwanda, where employees in both public and private institutions are required to make decisions concerning saving, spending, investment, borrowing, and financial planning.
For me the private and public sector employees need to invest in the a side business for money grow.
This is an insightful study that clearly shows how financial confidence, self-control, and financial literacy can influence better financial decision-making.