Introduction

Financial well-being is an emerging indicator of individual and household financial stability, influencing individuals’ physical, psychological, political and social outcomes (Brüggen et al., 2017). Financial well-being is a multidimensional concept representing individuals’ ability to fulfill their present as well as future financial obligations, feel secure in their financial future, and make independent choices that lead to the enjoyment of life (Kamble et al., 2024). Achieving financial well-being, especially for women, is often constrained by socio-cultural norms, partial freedom, a low level of financial and limited financial inclusion in Pakistan (Saleem et al., 2023). Financial well-being supports human beings to get independence in financial decisions, which in turn contributes to their personal and professional betterment. Financial well-being is a critical factor that determines economic performance and has deep relations with financial capability, financial literacy, financial autonomy, and financial socialization (Mahendru et al., 2020). In emerging economies, where gender disparities are relatively larger across political, economic, educational, employment and social domains, the importance of understanding women’s financial socialization and their well-being becomes particularly significant. The importance of well-being has grown among many disciplines. Financial well-being resolves the issue of work-life balance, which will help mitigate financial stress and increase job satisfaction (Riitsalu et al., 2023). The financially secure employees are likely to be more productive and satisfied with their work. This satisfaction is translated to better job performance, research and innovation and other contributions to organizations (Rahman et al., 2021). Particularly, financial well-being can enhance the employees’ performance in women’s universities and will create a conducive environment for students’ learning, teaching and research activities.

Financial skills, financial capability and financial socialization are requisites of financial well-being. Financial literacy helps individuals to know how to save money for unforeseen future events that arise from socioeconomic stresses like insolvency, job loss, medical expenses, etc. (Lim & Rasul, 2022; Singh & Malik, 2022). Financial well-being represents the capability to manage one’s financial assets effectively and effectively, achieve financial freedom, and maintain present and future desired living standards (Kumar et al., 2023). Financial well-being is an essential prerequisite for individuals’ prosperity because it improves financial standing and boosts well-being in general. Financial well-being warrants that employees can better manage financial challenges with more resilience, thus bringing stability and endurance to their roles (Utkarsh et al., 2020). Individual financial behaviors, financial capabilities, satisfaction, and financial attitudes can be used as a lens to view employees’ financial well-being (Pak et al., 2024).

Women’s financial well-being in developing economies like Pakistan remains an emerging issue due to growing gender disparities in access to financial resources, education, income, and bank finances (Sadiq et al., 2021). The idea of financial well-being, financial security and freedom of choices is relatively an unexplored area (Collins & Urban, 2020), and the phenomenon is significant for researchers to uncover the broader impacts of individuals’ financial stability on their lives and behavioral patterns across the globe (Diener et al., 2020; Kaur et al., 2022; Wilmarth, 2021).

The study supports Amartya Sen’s Capability approach (1993), which evaluates individual well-being more holistically while focusing on their capabilities. Unlike believing in traditional economic indicators, this approach incorporates the real freedoms of individuals that lead to the life they cherish. This approach is derived from the literature on welfare economics and is considered a powerful tool for assessing well-being, poverty, and inequality (Hermann, 2025). Functioning, capabilities and freedom are the core concepts in the approach. Functioning refers to what people are doing and what they want to be, i.e., are they making wise decisions and being financially literate, whether they have an understanding of financial concepts. The approach emphasizes real freedom where women can manage their finances effectively and achieve financial stability. Financial literacy enables individuals to tackle financial challenges to ensure financial stability and progress. Functioning is grounded in financial literacy. Capability is a derived concept and mirrors the various functions an individual might have to achieve financial well-being, and it involves the individual’s choice as well. Consequently, capabilities are the selections an individual makes to achieve financial well-being. To attain well-being, individuals need to have freedoms and possess certain qualities, i.e., should be financially literate. According to the capability approach, individuals’ abilities to live as they want to live is the primary factor in their freedom to attain well-being, i.e., they shouldbe financially autonomous.

The study examines the financial well-being of female employees working at women’s universities in KP province, Pakistan. The study argues that female economic hardships, like unequal access to resources, independence, autonomy, and economic opportunities, constrain their well-being. Understanding the dynamics of female well-being is the main motivation of the study. Previous research focused largely on populations like men, emerging adults, young people, and students (Pak et al., 2024) and provided valuable insights, but these studies overlooked the vulnerable female employees group, taking into account their unique cultural background. The current study attempts to examine the female employees’ population in a province where females face socio-cultural barriers in financial decision-making. Moreover, this study proposes the mediating role of financial capability, which uniquely describes how knowledge, socialization and empowerment translate into women’s financial well-being via the financial capability. The mediation highlights how skills and knowledge develop financial stability and ultimately boost financial well-being. The study enlightens an integrated structure of personal, financial, and contextual factors in determining financial well-being from a financial socialization perspective. The study has a policy impact on university administration and regulators by supporting women’s financial autonomy as well as adding to the body of literature on financial well-being and financial socialization in developing economies.

Literature review and hypotheses development

Financial well-being

Porter and Garman (1993) defined financial well-being as objective, evaluated and perceived aspects of the financial realm. A study in the context of the US reported that budgeting, uncontrolled buying, individual savings, and behavior toward credit cards are related to financial well-being (Gutter & Copur, 2011). In 2017, CFBP distributed a study report comprising 10,804 adults, examining behavior, knowledge, attitudes and skills that assisted people in attaining financial well-being (Kumar et al., 2023). Similarly, She et al. (2023) analyzed the well-being of 526 Chinese workers, taking clarity of financial goals, subjective FK and financial behavior as mediators and found a positive correlation among stated variables in emerging economies. Likewise, knowledge, behavior and attitude are the key components of financial well-being and all have a positive impact on financial well-being as reported by (Bhatia & Singh, 2023; Fan & Henager, 2022; Owusu, 2021; Prakash et al., 2021; Silva & Dias, 2022) while (Prakash et al., 2021; Rahman et al., 2021) argued that along with these stated predictors financial stress is also an essential component of financial WB. Riitsalu et al. (2023) considerd age along with financial knowledge, behavior in predicting financial well-being and conducted 47 semi-structure interviews to determine financial well-being among different age groups and found that the young generation perceives that financial WB in terms of three components, achieving the desired lifestyle, making ends meet, and achieving financial freedom. Financial freedom is conceived differently among different groups of people. The young generation wants to become financially strong and independent, middle-aged people want to support their families, while mature people do not want to become a financial burden on others. Many Authors analyzed financial well-being from a digital financial services and inclusion perspective, and their findings suggest that digital services in today’s world are enhancing financial well-being (Dzogbenuku et al., 2022; Lyons & Hanna, 2021; Nandru et al., 2021).

Financial socialization

Financial socialization represents that individuals get financial knowledge, norms, attitudes, values, and learn how to behave well in personal financial management. Typically, such skills come through interactions with parents, friends and other family members. Financial socialization shapes how individuals learn to manage their money, make prudent financial decisions, and develop healthy habits that positively influence their financial well-being (Pak et al., 2024). Obtaining and developing skills, values, behaviors, and knowledge is financial socialization (Danes, 1994). Fan and Henager (2022) pointed out that parents play an important role in improving children’s knowledge about economic problems, which affect their financial well-being. Wee and Goy (2022) considered the prenatal role in developing financial socialization by predicting personality, financial risk tolerance, and financial knowledge as mediators (Wee & Goy, 2022). They used college students for their empirical data. Several researchers have worked on financial socialization from financial literacy using behavioral perspectives and suggested that financially socialized individuals will perform better in their money management (Khawar & Sarwar, 2021; Pandey & Utkarsh, 2023; Utkarsh et al., 2020). Vijaykumar (2021) examined the association between FS and Indian students’ financial autonomy and self-efficacy and concluded that young people pick up inherent attitudes, norms, beliefs, and behaviors from their family and further disclosed that family discussions related to money are significant in developing specific financial behaviors of youngsters. Gafoor et al. (2025) linked financial socialization with the saving and spending behavior of unskilled internal migrant laborers, and found that learning from parents and socialization remain crucial in emerging adulthood. In a nutshell, financial socialization has a positive effect on financial WB. Therefore, we recommend testing the following hypothesis;

H1: Financial socialization positively affects female employees’ financial well-being.

Financial literacy

Financial literacy implies individuals’ understanding of elementary financial concepts and skills that help them make effective financial decisions. It includes saving, budgeting, investing, credit and loan management, risk-related awareness and digital payments (Shah et al., 2024). Kumar et al. (2023) analyzed financial literacy along with financial socialization, risk tolerance, demographic factors and found that financial literacy is a precursor of individuals’ financial well-being. The elements such as age, gender, income and education levels contribute to financial literacy level (Arora & Chakraborty, 2022; Dewi, 2022). Lone and Bhat (2022) explored how financial literacy adds to financial well-being while self-efficacy served as a mediator. They found a positive impact of financial literacy on self-efficacy and well-being. Hossain et al. (2020) examined financial literacy, finance, and the growth of a firm’s relationship and found a positive relationship between finance, financial literacy and the financial growth of firms in Bangladesh. Koomson et al. (2022) substantiated that families can use financial literacy as a skill-building approach in socializing their young generations. Financial attitude, autonomy, and behavior are major outcomes of financial literacy, and they positively contribute to the female financial well-being (Dogra et al., 2021; Kaur et al., 2022; Kawamura et al., 2021). Hereafter, we formulate the hypothesis.

H2: Financial literacy positively affects female employees’ financial well-being.

Financial autonomy

Financial autonomy denotes the ability to manage one’s financial resources, make informed financial decisions, and control the receipts and payments without relying on others. It reflects an individual’s control over his/her financial matters, enabling the person to independently set and accomplish their goals (Choi et al., 2025). Financial autonomy is the zero or very low level of dependence on others (Collins et al., 1997). It is the capability and liberty to achieve goals (Jariwala, 2020). Kumar et al. (2023) investigated financial autonomy as a mediation mechanism coupled with digital FL, impulsivity, financial capability and ascertained their relationship with financial well-being. On the other hand, Vijaykumar (2021) studied the relationship between financial socialization, autonomy and self-efficacy and reminded that there should be direct discussion with children on financial matters instead of letting them merely observe the situation. This will have a substantial influence on improving their self-efficacy and financial autonomy. Seetah et al. (2022) concluded that domestic or work-related violence against women, sociological issues, and scarcity of opportunities to access financing do affect the financial freedom of women. The judicial system and the sociocultural norms have a major impact on the freedom of females. Consequently, we check the subsequent hypothesis.

H3: Financial autonomy positively affects female employees’ financial well-being.

Financial capability

Financial capability is a whole set combining knowledge, expertise, attitudes, and behaviors that empower individuals to manage their money more effectively, make learned decisions, and accomplish financial well-being. It is broader than financial literacy and includes the confidence and capability to apply the knowledge in actual life situations. Sherraden (2013) designated that financial capability has two components: the capacity for action and the availability of opportunity. It tells about the knowledge and abilities related to money that enable the best possible use of financial resources and, eventually, the making of sound financial judgments. Clark and Ansong (2022) forecasted financial well-being by considering financial shocks, saving habits, income fluctuations, and financial products from the standpoint of financial capability. Results show that tremors and income unpredictability are strong factors of FWB. These findings also recommend that to improve financial well-being, efforts should be taken to promote financial capability. On the other side, Parvathy and Kumar (2022) scrutinized the effect of financial capability on the financial well-being of women in public administrations, with decision-making as a mediator and financial capability. They concluded that the financial well-being of women is largely dependent on financial capability and also reported that decision-making serves as a substantial mediator. Previous research also clarified that increasing individuals’ financial knowledge will strengthen their financial services that in turn will reinforce their financial capability (Cera et al., 2020; Xiao, 2009).

H4: Financial capability mediates between financial socialization and financial well-being.

H5: Financial capability mediates between financial literacy and financial well-being.

H6: Financial capability mediates between financial autonomy and financial well-being.

H7: Financial autonomy positively affects female employees’ financial well-being.

Most of the previous research carried out on adults, emerging adulthood, young people, college and university students, while these studies overlooked the female employees’ perspectives with unique cultural issues. The proposed study incorporates the local women’s perspective involving a new mediation mechanism of financial capability. Many predictors are involved for a better understanding of financial well-being, like financial socialization, financial literacy, financial autonomy and financial capability. The study will provide an integrated structure of personal and contextual factors in determining financial well-being from a financial socialization perspective.

The study’s theoretical framework, as shown by Fig. 1, comprises the effect of financial socialization, financial literacy, and financial autonomy on the financial well-being of female employees in KP universities in Pakistan. Similarly, FC mediates the relationship between financial literacy, socialization and autonomy.

Fig. 1
Fig. 1
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Conceptual model.

The Amartya Sen Capability Approach (1993) was utilized as a theoretical foundation for the study. This paradigm encourages people to evaluate their actions according to the freedom they have and the functions that are considered important. The Capability approach involves two primary themes. First, individuals’ top priority is to gain well-being, and second, well-being requires individuals to possess certain qualities. According to the capability approach, people’s ability to lead fulfilling lives is the primary factor in their freedom to attain well-being. The quality of life that people can genuinely accomplish is directly addressed by the capabilities approach (Hermann, 2025). Researchers examine this quality of life in terms of “functioning” and “capability.” Sen contends that a person’s capacity for life, rather than their abundance of income or subjective well-being, is the best indicator of how well they are doing. However, before we can start evaluating an individual’s ability, we must first decide which functions and to what extent are essential to a happy life, or at the very least, we must design an assessment process to find out. Capability has a broader view of well-being; it tries to evaluate the freedom people want to make a standard living. Individuals live a life that is valuable in terms of the functioning available to that individual (Cera et al., 2020; Gebert et al., 2023; Kumar et al., 2023; Regier, 2023; Talbot, 2023; Velastegui, 2023).

Methodology

Survey instrument

Bearing in mind the study’s objectives, the cross-sectional data were gathered from women’s universities in Khyber Pakhtunkhwa (KP) province with the hypotheses derived from a priori theories. A deductive approach was used to understand the phenomenon of female financial well-being in a new sociocultural context with testing new paths. In this regard, all the employees (having permanent or contract basis) working as teachers or administrators in KP women’s universities were the proposed population. To achieve a sound survey weight and to capture the effect of financial socialization, financial literacy and financial autonomy, we approached both teaching and non-teaching staff who had differences in literacy, autonomy and socialization. This combination was vital for a representative sample and precise analysis. As a sampling technique, the study adopted convenience sampling due to the geographical proximity, availability of data at a given time and willingness of participants to participate in the research. The sample consisted of Shaheed Benazir Bhutto Women University, Peshawar, Women University, Swabi, University of Swat, University of Science & Technology Bannu, Women Campus, Women University, Mardan.

The theme of the study is significant and emerging, especially the socio-economic and cultural setting of Pakistan and KP, necessitates exploring the women’s financial well-being. To meet the objectives of the study, primary data was collected with a survey questionnaire, using a 5-point Likert scale, where Strongly Disagree=1, Disagree=2, Neutral=3, Agree=4, strongly Agree=5. In behavioral finance research, the 5-point Likert scale is an established practice to capture opinions, preferences and individual choices (Shah et al., 2024). This method captures respondents’ preferences accurately and facilitates robust statistical analysis, hence improving the overall psychometric qualities of the data. The five-point Likert scale provides participants with an array of possibilities, permitting them to choose the one that best suits their opinions (Creswell & Creswell, 2003). A questionnaire was adopted from previous studies that was used in the context of financial literacy, financial socialization and financial well-being. The questionnaire was mainly divided into three sections. The first section detailed the purpose of the questionnaire, with thanks to the respondents. The second part was devoted to the demographic details of the respondents, i.e., age, designation, experience, gender, marital status, education and net income. The third section focused on the main constructs to assess them properly. The items relating to financial socialization, financial literacy, financial autonomy, FC and FWB were sourced from (Lone & Bhat, 2022; Rahman et al., 2021; Sabri et al., 2021; Tahir et al., 2021; Vijaykumar, 2021), respectively. The questionnaire’s sections were developed after a detailed assessment of the literature. Table 1 shows the demographic characteristics of respondents.

Table 1 Demographics.
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Measures and ethical considerations

Financial well-being was determined through analyzing participants’ cross-sectional data. A convenience sampling technique was practically suitable to use in far-flung areas of KP universities. We used both ways of survey distribution, i.e., the questionnaires were physically self-administered as well as managed online. To remove incomplete and data-constrained questionnaires, we filtered the data and got 437 good questionnaires that we used for final analysis. As supported by Creswell and Poth (2016) and Bougie and Sekaran (2019), G-power analysis was used to determine the minimum sample size. To determine the suitable sample size, G*Power explains the statistical power (1-β), the standardized significance threshold (α), effect size (ES) and the number of indicators. The findings show that a minimum of 85 respondents were required to provide significant results for the two-tailed test with effect size (0.15), a power level (1-β) of 0.80 and a significance level (α) of 0.05. For more robust and consistent results, we increased the sample size to 437, which is higher than the recommended level as set by (Hair et al., 2013). Our sample was greater than the criterion, i.e., three times greater than this number, 85.

The study followed all the ethical standards, and in this regard, the participant were well-informed about the study’s goals and were assured that their data would be utilized only for research purposes. Before contacting the respondents, informed consent was obtained from them, ensuring their privacy and voluntary contribution. In addition, the personal and sensitive queries were avoided in the questionnaire. Strict precautions were taken to protect the data and observe full research ethics, emphasizing respondents’ well-being and protecting the transparency of their data. We got the confidence of respondents that upon study completion, they will get the findings, so respondents enthusiastically and voluntarily contributed their time. Table 1 shows the demographic characteristics of respondents.

Data analysis and results

Both descriptive and inferential statistics were checked while analyzing the data. SPSS (27) was used for initial data entry, removing outliers, and getting the descriptive results. Structural Equation Modeling (SEM) via Smart-PLS version 4.0.8.7 was employed for checking the model fit and the hypotheses testing. Structural Equation Modeling is a multivariate technique that estimates a number of interconnected dependent relations at once by combining factor analysis and multiple regression elements (Hair et al., 2010). Moreover, SEM is capable of assessing each construct’s validity, reliability, and unidimensionality (Hair et al., 2006). The structural and measurement model are the two steps in the estimation and interpretation of the PLS model (Hair et al., 2011). Convergent and discriminant validity can be used to assess the measurement model. For convergent validity, the Fornell–Larcker criterion, the HTMT matrix, and cross-loadings were used.

Table 2 shows that reliability was assessed through Cronbach’s Alpha, while discriminant validity was checked using AVE and CR values, which were all above the threshold level. For structural model results, we evaluated the coefficient of determination, standard error, t and p value, together with the path coefficients’ level of significance (Hair et al., 2011). This is accomplished by employing Smart PLS 4’s bootstrapping procedure. The research adopted bootstrapping with 5000 resamples to precisely evaluate the significance of the regression coefficients.

Table 2 Composite Reliability.
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Structural model estimation

The tests of reliability and validity were performed to decide whether the constructs were suitable for analysis of the structural model. Reliability is the calculation of the uniformity of the results obtained (Golafshani, 2003). Composite reliability and Cronbach’s alpha were used to evaluate the uniformity of constructs. As the Cronbach’s α ranges from 0.7 to 0.92, all the values, i.e., 0.85–0.92, show that the data have strong reliability (Hair et al., 2019). Similarly, the values of composite reliability (0.85 < CR > 0.92) surpass the threshold level of 0.70, as revealed in Table 3 (Nunnally & Bernstein, 1994). The convergent validity of constructs is higher than 0.50, as 0.49 < AVE ≥ 0.68 (Hair et al., 2014). Table 3 shows that every construct used in this research fulfilled the conditions for applying PLS-SEM and that the measurement model is sound enough for onward structural model analysis. The Fornell–Larker criterion was used to assess the discriminant validity, demonstrating how different and uncorrelated the constructs are with one another (Khan et al., 2022). To ensure discriminant validity, we took the AVE’s square root of variables, which must be greater than their cross-correlations (Fornell & Larcker, 1981). As presented in Table 4, the discriminant validity is established because the constructs’ AVE scores were higher than their square cross-correlations. Likewise, by using the HTMT ratio, the discriminant validity was calculated, where values are greater than 0.85 (Henseler et al., 2015).

Table 3 Factor loadings and measurement model results.
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Table 4 Fornell-Larker criterion & HTMT Matrix.
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Before testing the hypotheses, the model fitness was measured. Table 5 shows that the model has an acceptable range as the SRMR value is 0.05 < SRMR ≤ 0.10, which shows that the model has a good fit (Hu & Bentler, 1999).

Table 5 Model Fit.
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Subsequently, testing the construct reliability and validity, we applied the path coefficient. Figure 2 reveals that R-squared (0.66) pinpoints 66% of the variation in financial capability is determined by financial socialization, literacy, and autonomy. Further, the R-squared of financial well-being is 0.69, which elucidates that 69% of variations in financial well-being are due to financial capability, socialization, literacy and autonomy. Furthermore, to examine the hypotheses, path coefficient analysis is used. By comparative analysis of standardized path coefficients as shown in Fig. 2 and Table 6 revealed that, the effect of financial socialization on financial capability is β 0.000, p < 0.001, financial literacy β 0.000, p < 0.001, financial autonomy β 0.000, p < 0.001 and financial capability on financial well-being is β 0.000, p < 0.001, financial autonomy β 0.000, p < 0.001, financial socialization β 0.000, p < 0.001, has a significant positive impact on financial well-being, so H4, H5, H6, H7, H3, H1 are supported. Table 7 evidences that mediation results that support how financial capability mediates the relationship between the chosen predictors and financial well-being. Figure 3 reveals the path coefficient results. Though financial literacy β 0.142, p > 0.05, has an insignificant impact on financial well-being; hence, H2 is not supported.

Fig. 2
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Structural model.

Table 6 Hypothesis testing.
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Table 7 Mediation Analysis.
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Fig. 3
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Measurement model estimation (Path coefficients).

Discussion and conclusion

Discussion

This study tackled the issue of women’s financial well-being in Khyber Pakhtunkhwa, Pakistan, which is susceptible to socio-economic challenges, especially for women. The study predicted the impact of financial socialization, financial literacy, and financial autonomy on women’s financial well-being with the mediation of financial capability. The study finds that those women who received financial socialization from their parents, peers, or elders experience financial well-being in their work setting. Socialization shapes their behavior and translates into well-being. The result is at par with previous studies that found a positive and significant relationship between financial socialization and financial well-being (Pak et al., 2024). Women who participated in discussions, took guidance, and were somehow involved when their parents were managing financial resources are better equipped to navigate their money management, thereby contributing to financial satisfaction. Women who have strong financial and social networks can better attain financial well-being. Individuals who had a discussion with their parents on different matters like spending behavior, financial investments and the importance of savings were more likely to show a positive attitude towards expenses and savings, which resulted in improved financial well-being as supported by (Sabri et al., 2021; Utkarsh et al., 2020).

The significant result of financial autonomy and financial well-being reminds us that women’s independence in financial matters is crucial for achieving well-being. The result is consistent with past studies (Kumar et al., 2023). The result highlights the KP context, where patriarchal norms and sociocultural issues often restrict women’s financial liberty. Women who participate in decision-making, like family expenditures, household savings and investments, develop confidence and independence (Sadiq et al., 2021). Financial autonomy has a strong impact on WB (Kumar et al., 2023). When individuals develop their financial knowledge and skills, they are expected to adopt the right financial attitude that, in turn, will enable them to perform their financial tasks effectively. This finding underlines the importance of programs and policies that enhance women’s autonomy, particularly in rural and semi-urban settings of KP. Contrary to the earlier studies (Lone & Bhat, 2022; Rahman et al., 2021), this study finds an insignificant relationship between financial literacy and the financial well-being of women in KP. Owing to the lack of opportunities where women can hardly apply their literacy and financial knowledge, cultural norms, limited access to financial resources, low participation in financial decision-making, and issues in structural policies are responsible for the result. Literacy may not attain the desired outcomes unless there are improvements and structural changes in the overall financial system, women’s empowerment, and women’s capacity building. Geopolitical risks or financial risk analysis can also be conducted to understand the differences in results, especially the well-being analysis in the context of risk factors (Li et al., 2024; Tan et al., 2023).

The study finds that financial capability mediates between financial socialization, financial autonomy, financial literacy and women’s financial well-being. The results emphasize that financial well-being is not only dependent on financial knowledge or exposure, but also on the ability where women can apply the knowledge in financial matters. To get a meaningful outcome, there is a bridging role of financial capabilities (saving, investing, budgeting, and credit management) between what the women employees know, their autonomy, and their well-being. Previous studies also found that financial capability can mediate or influence financial well-being (Fan & Henager, 2022; Parvathy & Kumar, 2022; Sabri & Zakaria, 2015). This study widens our understanding of financial well-being by introducing the mediating function of financial capability. Financial capability assesses women’s capacity to use financial knowledge and perform financial activities independently. Our research indicates that financial socialization enhances a woman’s capacity to effectively manage and save money, engage with financial institutions/markets and make well-informed and financially prudent decisions.

Conclusion

This study has addressed an overlooked phenomenon, examining the relationships between the determinants of women’s financial well-being in the unique socio-cultural background of KP, Pakistan. Financial socialization, financial literacy, and financial autonomy were regressed to investigate the women’s financial well-being with the mediation of financial capabilities. The findings are rich and provide valuable insights elucidating different financial antecedents that shape women’s financial well-being, keeping in view their socialization, liberty, education, and capabilities.

We gathered data from female teachers and administrators who are working in the KP universities and analyzed the data through SPSS and PLS-SEM. The study concludes that financial socialization, autonomy and capability significantly influence financial well-being. Interestingly, financial socialization and financial autonomy are the most powerful elements, followed by financial capability. Moreover, by using bootstrapping techniques, we examined the research hypothesis. There is a 69% variation in women’s financial well-being due to financial socialization, autonomy, and capability. Contrary to the other studies, our findings reflect that financial literacy has no significant impact on women’s financial well-being. It may be the result of women’s financial knowledge-action gap, limited financial autonomy, barriers faced by women in financial access, and socio-cultural issues in KP, Pakistan.

Implications of the study

This study contributes profoundly to the literature on women’s financial well-being using a gender-based focus and local context in a developing economy. The framework of the study provides a deeper understanding of financial well-being and expands the scope of existing models. Taking the mediation of financial capability, the study translates financial literacy and socialization that improve women’s financial well-being. Theoretically, this study offers several new insights. Unlike the conventional literature, where financial literacy automatically leads to better outcomes, this study supports the behaviorist approach that knowledge with application can achieve well-being. Similarly, confirming Sen’s Capabilities Approach, the study concludes that merely gaining knowledge is not sufficient; rather, women need to develop skills, build confidence, and, more importantly, have the opportunities to apply the skills for their well-being. This is a refinement to the existing models of financial well-being. Moreover, the focus is on the Asian Pakistani context, where financial behavior is largely dependent on gender and cultural roles. It underscores the importance of local culture and gender roles, referring to cross-cultural theories for future investigation. Finally, the study presented a holistic model of elucidating women’s financial well-being, which can be used as a foundation for fresh academic studies to apply similar models in other local contexts. This will further purify the theoretical understanding of how different psychological, cultural, social, and structural elements hold centrality in women’s financial well-being.

Practically, the study contributes to better policy formulation and managerial improvements. The substantial effect of financial socialization directs development programs where families and communities can collectively create a conducive environment for women’s participation in financial matters. Policymakers, regulators, the State Bank of Pakistan, and NGOs should focus on both financial literacy training and enhancing women’s financial capabilities. This will help build women’s confidence, refining skills, and enable them to solve their real-life financial problems. Women-friendly initiatives aiming to strengthen women’s financial independence need to be prioritized in academia and government policy formulation. In this regard, the educational institutions and universities can be good platforms to enhance women’s financial literacy and socialize them on how to improve their capabilities. Institutions should focus on the legal, cultural, and economic barriers that stop women from engaging in and applying financial knowledge. The Provincial and federal governments of Pakistan should develop such mechanisms to improve women’s inclusion in formal financial services like opening bank accounts, smart money and mobile apps, micro-finance, and credit cards, especially in rural KP, where access is currently limited. This will enhance their financial knowledge, autonomy, and capabilities to achieve their financial well-being.

Limitations and future research direction

The study provides fresh insights to predict women’s financial well-being in Khyber Pakhtunkhwa, yet there are several limitations that we acknowledge. First, we used a cross-sectional research design that limits our ability to investigate the phenomenon at different points in time. So the results over time cannot be firmly confirmed. We suggest that future studies use longitudinal or time-series designs that would provide more cogent evidence of causality. Second, the use of primary data where the preferences were based on self-reported measures may be subject to bias. To avoid such issues, future researchers can incorporate objective financial data to enhance the results. Third, there may be a generalizability issue, as we focused on women in Khyber Pakhtunkhwa, which may not truly represent women in other parts of Pakistan or other developing countries. Fourth, the study was rich in assessing the predictors, but potentially future studies can incorporate more influential variables like personality traits, development of financial markets, spousal support, education level and freedom, and financial inclusion of women in financial services. Finally, we didn’t find support for the significant effect of financial literacy on women’s financial well-being. This may reflect the absence of contextual factors, like structural issues, low financial inclusion, and restrictions on women’s financial decision-making. Further studies can explore such moderating or mediating factors to highlight why financial literacy failed to translate into women’s financial well-being.