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FINANCIAL PLANNING BEHAVIOUR: A SYSTEMATIC LITERATURE REVIEW AND NEW THEORY
DEVELOPMENT

* Original Article
* Open access
* Published: 03 October 2023

* Volume� 29,� pages 979–1001, (2024)
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Financial planning behaviour: a systematic literature review and new theory
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* Kingsley Hung Khai Yeo1,
* Weng Marc Lim 1,2,3 &
* Kwang-Jing Yii1�

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ABSTRACT

Financial resilience is founded on good financial planning behaviour.
Contributing to theorisation efforts in this space, this study aims to develop a
new theory that explains financial planning behaviour. Following an appraisal of
theories, a systematic literature review of financial planning behaviour through
the lens of the theory of planned behaviour (TPB) is conducted using the
SPAR-4-SLR protocol. Thirty relevant articles indexed in Scopus and Web of
Science were identified and retrieved from Google Scholar. The content of these
articles was analysed using the antecedents, decisions, and outcomes (ADO) and
theories, contexts, and methods (TCM) frameworks to obtain a fundamental grasp
of financial planning behaviour. The results provide insights into how the
financial planning behaviour of an individual can be understood and shaped by
substituting the original components of the TPB with relevant concepts from
behavioural finance, and thus, leading to the establishment of the theory of
financial planning behaviour, which posits that (a) financial satisfaction
(attitude), (b) financial socialisation (subjective norms), and (c) financial
literacy, mental accounting, and financial cognition (perceived behavioural
controls) directly affect (d) the intention to adopt and indirectly shape, (e)
the actual adoption of financial planning behaviour, which could manifest in six
forms (i.e. adoption of cash flow, tax, investment, risk, estate, and retirement
planning). The study contributes to establishing the theory of financial
planning behaviour, which is an original theory that explains how different
concepts in behavioural finance could be synthesised to parsimoniously explain
financial planning behaviour.

SIMILAR CONTENT BEING VIEWED BY OTHERS

THE INFLUENCE OF ATTITUDE TO MONEY ON INDIVIDUALS’ FINANCIAL WELL-BEING

Article 04 March 2020

CONDUCTING RESEARCH IN FINANCIAL PLANNING

A STRUCTURAL DETERMINANTS FRAMEWORK FOR FINANCIAL WELL-BEING

Article 16 September 2021
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Avoid common mistakes on your manuscript.

INTRODUCTION

BACKGROUND OF FINANCIAL PLANNING

Personal financial planning is critical to maintaining a healthy financial
status and fulfilling future financial needs (Mahapatra et al. 2019). In
essence, personal financial planning is a process of managing personal wealth to
obtain economic satisfaction (Kapoor et al. 2014). This encompasses six areas of
financial planning, namely cash flow planning, tax planning, investment
planning, risk management, estate planning, and retirement planning (Altfest
2004). Ideally, comprehensive financial planning should involve all six areas.
However, the specific life stage of an individual, such as retirees, and life
realities, such as retrenchment, may dictate the primary focus and/or relevance
of these areas. For example, retirees might not be actively engaged in tax
planning, and a retrenched worker might not be in a position to engage in
investment planning. More importantly, personal financial planning is a profound
concept that theoretically reflects and practically safeguards individuals’
financial resilience, and thus, it can be understood from two unique lenses:
academic and practice.

From an academic perspective, the field of personal finance is
interdisciplinary; it covers a wide range of areas, including economics, family
studies, finance, information technology, psychology, and sociology (Schuchartdt
et al. 2007). Different disciplines have varied theories that play a supporting
role in understanding individuals’ financial behaviour and money management
(Copur and Gutter 2019). However, the theories explaining personal finance are
often borrowed rather than created, a situation that is common for emerging
interdisciplinary fields (Murray and Evers 1989) such as personal finance (Lyons
and Neelakantan 2008), which encompasses close to 250 publications only in
Scopus by the end of 2022.Footnote 1

From a practice standpoint, Palmer et al. (2009) argued that it is necessary to
develop financial planning for each individual that can deal with the
uncertainty of the economic environment. Hanna and Lindamood (2010) echoed that
personal financial planning can provide individuals sufficient economic benefits
such as increasing wealth, preventing financial loss, and smooth
consumption.Footnote 2 However, many individuals lack sufficient financial
capability, skills, and knowledge to be able to effectively manage their
personal finances (Chen and Volpe 1998).

PROBLEMS AND IMPORTANCE OF FINANCIAL PLANNING

Over time, the society is facing increasing challenges of high living expenses
and various financial difficulties given the constant development of complexity
in financial matters (Baker et al. 2023; Mahapatra et al. 2019). Individuals’
ability to manage their personal finances and financial affairs has been gaining
attention across the world, wherein being financially healthy gets prioritised
by individuals in their lives (e.g. changing investment approach and
contributing more to retirement savings to hedge against inflation; Personal
Capital 2022).

Birari and Patil (2014) state that individuals should practice and gain basic
financial skills to manage their expenditures and acquire well-developed
planning to avoid being in financial difficulties. Many factors may lead to
irrational financial behaviours from individuals—for example, excess
consumption, aggressive trading, lack of savings, and retirement planning.
However, one of the major root causes that propels irrational financial
behaviour as well as the many financial difficulties that people encounter is
inarguably the lack of financial literacy (Organization for Economic Cooperation
and Development 2020).

According to the Organization for Economic Cooperation and Development (2013),
financial literacy consists of financial knowledge, skill, attitude, awareness,
and behaviour to make a rational financial decision and achieve individual
financial well-being. In other words, financial literacy is the ability to
utilise knowledge and skills to manage financial matters effectively (Pailella,
2016; Tavares et al. 2023).

Noteworthily, financial behaviour in individuals’ daily lives cannot be
separated from financial literacy. Tan et al. (2011) state that the process of
personal financial planning requires individuals to acquire not only cognitive
ability but also financial literacy. According to Ali et al. (2014), financial
literacy should be given serious attention from individuals because it is able
to affect their welfare. Indeed, financial literacy has been proven to have a
positive impact on financial planning. Specifically, individuals who lack
financial literacy will often end up in debt (Lusardi and Tufano 2009) and will
most likely increase their financial burden (Gathergood 2012). By having
sufficient relevant information, individuals can analyse their financial
situation and make decisions wisely.

GAPS AND NECESSITY TO THEORISE FINANCIAL PLANNING BEHAVIOUR

As mentioned, extant understanding of financial planning is mainly derived from
borrowed theories. While this practice remains acceptable, it is important that
new theories are developed to enrich understanding of financial planning,
particularly from a behavioural perspective, as the issue of good or poor
financial planning is dependent on the individual and his or her financial
planning behaviour. With the maturity of the literature on financial planning,
the time is now opportune to engage in new theory development (Kumar et al.
2022).

The need for theory development is further accentuated as there is a notable
lack of theory development in explaining financial planning behaviour.
Noteworthily, existing frameworks and models remain piecemeal and do not fully
cover the whole spectrum of financial planning. After an appraisal of theories
related to financial planning (“Evolution of theories” Section), the theory of
planned behaviour (TPB) has been found to be the most suitable theory on
parsimonious grounds (i.e. the capability and capacity of the theory’s core
components to act as an organising frame) and its track record of theory
spinoffs (e.g. the theory of behavioural control; Lim and Weissmann 2023) to
explain an individual’s financial planning behaviour. Therefore, an integration
of the respective antecedents, decisions, and outcomes (ADO) to form a new,
holistic theory is required to document the complexity and the extent of
considerations required to explain financial planning behaviour. Such an
integration can and will be pursued via a systematic literature review (Lim et
al. 2022a, b).

GOALS AND CONTRIBUTIONS OF THIS STUDY

The goal of this study is to establish a formal theory to explain financial
planning behaviour. To do so, a systematic literature review is conducted,
wherein the SPAR-4-SLR protocol is adopted to guide the review process, whereas
the antecedents, decisions, and outcomes (ADO) framework (Paul and Benito 2018)
and the theories, contexts, and methods (TCM) framework (Paul et al. 2017) are
adopted and integrated to analyse the findings of the review—a best practice
demonstrated and recommended by Lim et al. (2021). In doing so, this study makes
two noteworthy contributions.

From a theoretical perspective, the integrated framework contributes to
integrate fragmented knowledge and reduce the production of isolated knowledge
on financial planning behaviour. In addition, the framework clarifies the state
of existing insights and empowers the discovery of new insights on financial
planning behaviour. Certainly, insights gathered from a well-structured
framework can provide a better start to add to existing knowledge and increase
growth in the field (Kumar et al. 2019; Lim et al. 2022a, b). More importantly,
the nomological structure of the framework also enables the study to establish a
new theory called the theory of financial planning behaviour, which can act as a
multi-dimensional behavioural guideline that involves planning, developing, and
assessing the operation of cash flow, tax efficiency, investment planning, risk
management, estate planning, and retirement planning within an individual.

From a practical standpoint, the insights from the study are expected to
contribute to future financial service professionals gaining advantages in the
understanding of financial planning behaviour in catering to the future needs of
the public. Additionally, policymakers would benefit from utilising the
information to effectively provide financial education programs to enhance
individuals’ financial well-being. Further implications for this study focusing
on consumers and managers are also discussed towards the end of this study.

THEORETICAL BACKGROUND

EVOLUTION OF THEORIES

Over the past decades, several theories have been used by researchers on
financial planning and the determining factors that influence it. The evolution
of theories relating to financial planning is based on the concept of
behavioural finance. These theories remain important in financial planning
research (Asebedo 2022; Overton 2008). The most well-known theory related to
behavioural finance is the TPB (Ajzen 1991). It has been widely used on
different research topics to predict and explain individuals’ behaviour or the
insufficient control of their behaviour (Ajzen 1985, 1991, 2002). Noteworthily,
the TPB is an extension of the theory of reasoned action, which suggested that
human behaviour is determined by the intention to perform a certain behaviour,
whereby the intention can be determined by attitudes and subjective norms
(Fishbein and Ajzen 1975).

In addition, Maslow’s (1943) hierarchy of needs has been used by Chieffe and
Rakes (1999) to identify and rate the different segments of financial services
best suited to each level of income group. The hierarchical approach of this
theory provides a framework that explains different financial planning services
related to each income group. According to Xiao and Noring (1994) and Xiao and
Anderson (1997), the notion of Maslow’s hierarchy of needs clearly explains an
individual’s financial needs in the form of a hierarchy. The framework of a
hierarchical form of financial planning indicates that individuals would only
strive for a high level of financial needs after a lower level of financial
needs is met. It is recommended for individuals to fulfil their needs step by
step to avoid facing financial difficulties.

Another theory that has been applied to financial planning is the life-cycle
hypothesis (Modigliani and Brumberg 1954), which is an economic theory that
explains an individual’s saving and spending behaviour throughout their
lifetime. The theory also points out that individuals want to have smooth
consumption by saving more if their income increases and borrowing more when
their income ceases. Shefrin and Thaler (1988) state that individuals mentally
place their assets into three different accounts, which are current income,
current assets, and future income. According to Modigliani and Brumberg (1954),
this theory assumes that individuals will fully utilise their utility for future
consumption and aim to accumulate savings and resources for future consumption
after retiring. The model explains that individuals’ consumption and saving
decisions are formed from a life-cycle perspective. Such individuals will begin
with low income when they start working, and their income will slowly increase
until it reaches a peak level. Taking a behavioural enrichment (or behaviourally
realistic) perspective of the life-cycle theory, Shefrin and Thaler (1988) state
that the behavioural life-cycle hypothesis includes mental accounting,
self-control, and framing, which represent three important behavioural features
that are usually missing in the economic perspective of the traditional
life-cycle theory. The authors mention that individuals use mental accounting to
control their propensity to spend on their assets. The willingness to spend is
usually related to their current income. According to Warneryd (1999),
individuals usually have a specific method to mentally allocate their
expenditures into different accounts. In addition, the marginal propensity to
save and consume will be different in each account. According to Shefrin and
Thaler (1988), individuals may face difficulties in controlling their spending,
and thus, these individuals may form personal behavioural incentives and
constraints. For example, individuals would possess the intention to save and
create assets when constraints are available. They also explain that
individuals’ preferences are not fixed but vary depending on the constantly
changing economic environment and social stimuli (Duesenberry and Turvey 1950;
Katona 1975). Furthermore, the life-cycle theory faces some challenges while
explaining individuals’ behaviour, such as assuming that individuals will act
rationally, be consistent, and make wise intertemporal choices throughout their
lifetime (Deaton 2005). The life-cycle theory explains that individuals’ saving
decisions are based on their preferences for either present or future
consumption. The theory also assumes that individuals determine a desirable age
of retirement and level of consumption to fully utilise their utility throughout
their lifetime.

Prospect theory is an economic theory that assumes individuals treat losses and
gains differently, showing how an individual decides among several choices that
involve uncertainties (Kahneman and Tversky 1979). This theory explains that
their decisions are easily affected by psychological factors and that they are
logical decision-makers. However, when individuals decide on whether to purchase
or not, they are most likely affected by their cognitive biases. The theory also
postulates that making losses will cause a larger emotional impact on
individuals rather than a comparable amount of gain. Thus, individuals will
prefer choosing the option with perceived gains. For example, individuals would
prefer the option of a sure gain instead of a riskier option with a chance of
receiving nothing or making a loss. Hence, the theory summarises that
individuals are mostly loss averse when they face several choices. Individuals
are more sensitive towards losses and would most likely prefer avoiding losses
and prefer sure wins. This can be explained by the fact that the emotional
impact of losses on an individual is greater than an equivalent gain.

The financial capability model is another prominent theory. Financial
capability, which has been gaining prominence across the globe, is defined as
the capability and skills of individuals to make rational and effective
judgements on managing their financial resources (Noctor et al. 1992). Nowadays,
individuals have been urged to ensure that they acquire sufficient resources for
their retirement and provide a financial safeguard for any sudden occurrence.
According to Atkinson et al. (2007), the financial capability model has been
studied and is related to individuals’ financial behaviour, attitude, and
knowledge. The researchers identified five different components under the
financial capability model: (1) making ends meet (managing personal financial
resources, i.e. individuals who have acquired financial knowledge skill sets can
finance their resources well and meet financial goals); (2) keeping track
(managing money, i.e. planning and recording personal daily expenses to avoid
overspending); (3) planning ahead (this helps individuals to be future oriented,
i.e. always planning and managing their financial resources to be prepared for
any financial uncertainties in the future); (4) choosing products (accumulating
resources and managing different assets’ risks, i.e. making a rational decision
in choosing financial products and diversifying risks); and (5) staying informed
(being updated and studying financial matters in the current market and economy,
i.e. individuals have to be eager to keep track on financial matters happening
in the market, such as changes in the overnight policy rate (OPR) and stock
market movement).

After a review of all the theories (Table 1), the TPB has been found to be the
most suitable theory to serve as a foundational lens for a review on financial
planning behaviour with the aim of establishing a new theory in this field.
Unlike the other theories (e.g. Maslow’s hierarchy of needs, life-cycle
hypothesis including behavioural life-cycle hypothesis, financial capability
model, prospect theory), the TPB is an adaptable yet parsimonious theory that
has a track record of spinning off new theories (e.g. the theory of behavioural
control; Lim and Weissmann 2023). Noteworthily, the TPB can be applied to
financial behaviours (Bansal and Taylor 2002; East 1993; Xiao and Wu 2006),
wherein the three antecedents of the TPB (attitude, subjective norms, and
perceived behavioural control) are found to be associated with intention and
contribute to financial behaviour (Shim et al. 2007; Xiao et al. 2007). Unlike
other theories, the mediating effect of financial literacy, which provides an
important lens to understand good and poor financial planning, can be applied to
the TPB to explain an individual’s intention on financial behaviour. More
importantly, it is necessary to understand how the TPB can further explain
individuals’ behaviour before examining financial literacy through a behavioural
approach. The theory assumes that intention is the best factor to predict an
individual’s behaviour, which, in turn, is examined by attitude and social
normative perceptions towards an individual’s behaviour (Montano and Kasprzyk
2015). Furthermore, individuals’ experiences normally affect their financial
decision-making and the way they manage their personal finances. Therefore,
financial literacy can be explained as an individual’s confidence and capability
to make full use of their financial knowledge (Huston 2010) and manage financial
matters (Lusardi and Mitchell 2014), which they would have perceived control
over. In this regard, the theory can be applied to examine how the financial
literacy process works on each individual. Moreover, Lusardi and Mitchell (2014)
explain that the favour of financial literacy is more than that of financial
capability, where individuals are responsible for their own financial decisions.
Hence, financial literacy acknowledges the perceived control of individuals on
their financial decisions. That being said, an individual will only show
positive financial behaviour when they perceive the value of their behaviour
based on their attitude. Therefore, financial behaviour will not be decided
based on their financial knowledge but based on their attitude, which is the
main component of this theory. In other words, the evaluation of financial
knowledge will be better captured through the components of the TPB (e.g.
perceived behavioural control), though conceptual contextualisation is necessary
to better resonate with the financial planning behaviour of individuals. To aid
this task, the next section provides a deeper discussion to understand the
fundamental tenets of the TPB.

Table 1 Evolution of theories
Full size table

THEORISATION OF THE THEORY OF PLANNED BEHAVIOUR

According to Xiao (2008), the TPB is one of the best and most suitable theories
related to financial behaviour that studies and predicts human behaviour. In
essence, the TPB is an extension of the theory of reasoned action, which
initially posits that attitude and subjective norms shape the intention to
perform a behaviour, which, in turn, predicts the actual performance of that
behaviour (Ajzen 1991). However, behavioural intention does not always translate
into behavioural performance (Lim and Weissmann 2023), which is the main reason
why the TPB was proposed to overcome the limitation of the theory of reasoned
action, with the inclusion of perceived behavioural control in the TPB as a
mechanism to recognise the volitional control that individuals possess in
translating or not translating behavioural intention into behavioural
performance (Ajzen 1991, 2002).

Perceived behavioural control can be expressed as follows: Given an individual’s
available resources and choices, how easy or hard it is to display a certain
behaviour or act in a certain way? In this regard, the performance of an
individual’s behaviour depends on his or her ability to act on said behaviour
(Ajzen 1991). The TPB posits that the perceived control on certain behaviour
will be greater when the individual has greater resources (social media, money,
time) and choices (Lim and Weissmann 2023). Indeed, several researchers have
found that perceived behavioural control has a positive relationship with
intention and behaviour (Fu� et al. 2006; Lee-Patridge and Ho 2003; Mathieson
1991; Shih and Fang 2004; Teo and Pok 2003).

Subjective norms can also be used to predict individual behavioural intention.
As one of the original components of the theory of reasoned action, subjective
norms refer to social influence and the social environment affecting an
individual’s behavioural intention (Fishbein and Ajzen 1975). It is defined as
an individual’s perception of the possibility that social agents approve or
disapprove a behaviour (Ajzen 1991; Fishbein and Ajzen 1975). It focuses on
everything around individuals, such as social networks, cultural norms, and
group beliefs. This is known as a direct determinant of behavioural intention in
the theory of reasoned action and the TPB. Through the lens of subjective norms,
an individual is said to be willing to perform a certain behaviour even though
he or she does not favour performing such behaviour while being under social
pressure and social influence (Venkatesh and Davis 2000). Kuo and Dai (2012)
state that as subjective norms become more positive, an individual’s behavioural
intention to perform or act on a certain behaviour becomes more positive.
Several studies have shown a significant relationship between subjective norms
and intention (Chan and Lu 2004; May 2005; Teo and Pok 2003; Venkatesh and Davis
2000). Sharif and Naghavi’s (2020) research on family financial socialisation
also finds that the behaviour of acquiring relevant norms and information on
financial socialisation is associated with subjective norms. The informational
subjective norms are known to predict perceived information. Ameliawati and
Setiyani (2018) mention that subjective norms in the TPB represent financial
socialisation. Their study describes subjective norms as financial socialisation
to research the influence of financial management behaviour. In addition, the
research of Jamal et al. (2015) on the effects of social influence and financial
literacy on students’ saving behaviour used the TPB to develop the model. The
author uses subjective norms to represent the social pressures influencing
students’ intentions to save. It analyses the influences of parents and peers on
the impact on the students’ saving behaviour. Hence, subjective norms have a
significant effect on the intentions of individuals towards financial planning
behaviour.

Attitude has been identified as a construct that guides an individual’s
intention, which results in them acting on a particular behaviour. In essence,
attitude can be defined as the evaluation of the positive and negative effects
on individuals performing an act or behaviour (Fishbein and Ajzen 1975), and by
extension, reflects the individual’s belief in certain behaviours or acts that
contribute positively or negatively to a person’s life (Ajzen and Fishbein
2000). There are two components of attitude: the attitude towards a physical
object (money, savings, pension) and the attitude towards behaviour or
performing a certain act (using savings or money to practice financial
planning). Keynes (2016) and Katona (1975) state that most individuals possess
positive attitudes towards personal saving. Many studies have determined a
significant relationship between attitudes and intention (Lu et al. 2003;
Ramayah et al. 2020; Wu and Chen 2005). Therefore, attitude can be one of the
most important factors to determine and predict human behaviour (Ajzen 1987).
According to Xiao (2008), the more favourable the attitude of an individual on
performing a behaviour, the easier it is for the individual to perform the
behaviour and the stronger the behavioural intention. Further understanding of
an individual’s attitude can help to predict their intention and behaviour.

Intention can be defined as an individual’s perception of performing a
particular act or behaviour (Fishbein and Ajzen 1975). In this regard, intention
is said to produce a direct effect on an individual’s behaviour as it signals
the willingness of an individual to act (Ajzen 1991). The TPB explains that the
degree of intentions that are converted into behaviour is determined by the
amount of volitional control. Behaviour such as saving money is not considered
as full volitional control given the lack of resources and opportunities able to
affect the capability to perform the behaviour. While individuals can control
their behaviour, their actual behaviour can easily be predicted by their
intention accurately, but this does not prove that the measure of correlation is
perfect between intention and behaviour (Fishbein and Ajzen 1975). Moreover,
strong bias always exists in individuals, where they will overestimate the
possibility of acting on desired behaviour and underestimate the possibility of
acting on undesired behaviour. This can cause inconsistencies between intention
and behaviour (performing an actual action) (Ajzen et al. 2004). Behaviour and
intention will show high correlation whenever the interval time between them is
low (Fishbein and Ajzen 1981). Yet, intention is known to change over time, and
thus, if the interval between intention and behaviour is greater, the
possibility of change in intention is higher (Ajzen 1985).

Behaviour refers to an observable response to a specific target (Fishbein and
Ajzen 1975). In essence, the performance of a given behaviour is a direct
outcome of the intention to perform that behaviour as well as an indirect result
of attitude, subjective norms, and perceived behavioural control (Ajzen 1991),
as discussed above.

The TPB has been widely used in different fields of research over the past
decades: medicine (Hagger and Chatzisarantis 2009; McEachan et al. 2011),
marketing and advertising (King et al. 2008; Yaghoubi and Bahmani 2010), tourism
and hospitality (Han 2015; Quintal et al. 2010), information science (Lee 2009;
Shih and Fang 2004), and, last but not least, human behaviour (Kobbeltvedt and
Wolff 2009; Perugini and Bagozzi 2001). All the studies listed above have
concluded on the positive and significant effect of attitude, subjective norms,
and perceived behavioural control on an individual’s intention to act on
behaviour. In the financial context, Shih and Fang (2004) apply the TPB to an
individual’s financial decisions regarding internet banking. The study concludes
that the TPB can be successfully applied to understand an individual’s intention
to use internet banking. Lau et al. (2001) and Lee (2009) also apply the TPB to
study investors’ intentions on online banking and trading online. To provide a
more accurate account for financial planning behaviour, a systematic literature
review is conducted and reported in the next sections.

METHODOLOGY

STUDY APPROACH: SYSTEMATIC LITERATURE REVIEW

This study conducts a systematic literature review to develop comprehensive
insights into financial planning behaviour based on the TPB. As mentioned above,
the TPB is the extension of the theory of reasoned action, and it strongly
posits that an individual’s behaviour is determined by the three factors
(attitude, subjective norms, and perceived behavioural control) and is backed by
their behavioural intention (Ajzen 1991).

A systematic literature review is known as a ‘research synthesis’, an extensive
process of summarising primary research based on an explicit research question,
where it attempts to identify, select, synthesise, and assess all the evidence
by providing answers to the research question (Donthu et al. 2021; Lim et al.
2022a, b). In this regard, systematic literature reviews not only summarise and
synthesise existing knowledge but also facilitate knowledge creation (Kraus et
al. 2022; Mukherjee et al. 2022). Moreover, systematic literature reviews
gathered eligible and pertinent evidence based on a preset criterion to answer a
specific research question, and thus, a transparent and explicit systematic
methodology can be used for systematic literature reviews to analyse and reduce
biases (Harris et al. 2014; Paul et al. 2021).

Systematic literature reviews can be conducted through various methods.
Generally, systematic literature reviews can be domain-based, theory-based, and
method-based (Palmatier et al. 2017; Paul et al. 2021). In this study, a
theory-based review was used for new theory development. Specifically, the
theory-based review is chosen over the other approaches because it serves the
purpose of analysing a specific role played by a theory in a given field. One of
the examples given by Hassan et al. (2015) is the role of the TPB in the field
of consumer behaviour. In this study, the TPB was applied to financial planning
behaviour.

STUDY PROCEDURE: SPAR-4-SLR

Few protocols exist for systematic literature reviews. The most common protocol
used by researchers in conducting systematic literature reviews is the preferred
reporting items for systematic reviews and meta-analysis (PRISMA) by Moher et
al. (2009). PRISMA is a comprehensive protocol that helps researchers to develop
systematic literature reviews. It gathers and reports decisions that researchers
have justified from their reviews. However, an uprising protocol was proposed by
Paul et al. (2021) to address the existing limitations of PRISMA, namely the
Scientific Procedures and Rationales for Systematic Literature Reviews protocol
or the SPAR-4-SLR protocol. As shown in Fig.� 1, the protocol consists of three
stages and six sub-stages, followed by sequences.

1. (1)

Assembling This stage constitutes the (1a) identification and (1b)
acquisition of literature that is yet to be synthesised.

2. (2)

Arranging This stage entails the (2a) organisation and (2b) purification of
literature in the stage of being synthesised.

3. (3)

Assessing This stage reflects the (3a) evaluation and (3b) reporting of
literature that has been synthesised.

Fig. 1

Review process

Full size image

Systematic reviews assembling, arranging, and assessing the literature according
to the SPAR-4-SLR protocol are expected to: (1) provide significant insights and
(2) stimulate nuanced agendas for knowledge advancement in the review domain.
Substantially, by providing such significant insights and agendas using the
SPAR-4-SLR protocol, (1) the review is comprehensively justified for logical and
pragmatic reasons, and (2) each stage and sub-stage is reported with full
transparency.

The researchers begin with assembling in the (1a) identification stage,
identifying the research domain and research question. The research domain of
this study is behavioural finance with a specific focus on financial planning.
The research question of this study is ‘How can the TPB be contextualised to
develop a theory of financial planning behaviour?’ Thus, academic articles
selected should focus on financial planning (i.e. the focus of this review) and
the TPB (i.e. the theory contextualised for this review). The source quality was
established based on Scopus or Web of Science indexing in line with Paul et al.
(2021). Moving on to the (1b) acquisition stage, the search mechanism will rely
on Google Scholar, which is free and can be easily accessed for article
search.Footnote 3 The search period will begin from 2000 to 2020 (20� years) as
most articles on the TPB and financial planning behaviour started to appear in
the early 2000s. Related articles searched between these years are included in
this study. The search was conducted multiple times with different keywords
based on American and British spelling as well as different combinations: (1)
‘financial planning’ + ‘theory of planned behavior’, (2) ‘financial
planning’ + ‘theory of planned behaviour’, (3) ‘personal financial
planning’ + ‘theory of planned behavior’, and (4) ‘personal financial
planning’ + ‘theory of planned behaviour’.Footnote 4

Next, the researchers move onto arranging in the (2a) organisation stage,
wherein the organising code for this study is ADO and TCM, which rely on the
suggested frameworks used, the ADO framework (Paul and Benito 2018; Pansari and
Kumar 2017) and the TCM framework (Paul et al. 2017). Refer to Fig.� 2 for the
overview of ADO on the insights of the TPB on financial planning behaviour and
its supporting TCM. In the (2b) purification stage, the articles gathered are
filtered in this process. The researchers decided which articles to include and
exclude from the study. The criteria to exclude articles in this stage include
duplicate articles, irrelevant articles, inaccessible articles, and lastly,
non-journal-title articles; 41 articles were excluded based on the criteria, and
30 articles proceeded to the next stage.

Fig. 2

The state of the art of the antecedents, decisions, and outcomes of financial
planning behaviour and its supporting theories, contexts, and methods

Full size image

Finally, the researchers move into assessing in the (3a) evaluation stage, which
involves the analysis and the agenda proposal. The study utilised content
analysis, a methodical approach for coding and interpreting textual data from
the selected articles to draw meaningful conclusions (Kraus et al. 2022). This
systematic technique, which was executed by one author (a doctoral scholar) and
cross-validated by another author (a senior academic) with an intercoder
reliability of ± 95% and differences clarified and resolved, enabled the
researchers to identify, categorise, and analyse patterns within the text,
contributing to a comprehensive understanding of the subject matter (Patil et
al. 2022). The theory development and future research agenda were formulated
through conceptual extrapolation and sensemaking (i.e. scanning, sensing, and
substantiating) (Lim and Kumar 2023). This process entailed critically examining
the existing theories, extracting key concepts, and extrapolating these to
propose new research directions. Thus, this study provided a roadmap for future
studies, fostering further evolution in the field of financial planning
behaviour. In the (3b) reporting stage, the reporting conventions used include
figures, tables, and words. No ethical approval is required since the review is
based on accessible secondary data (journal articles), which can be accessed by
anyone with subscription (Lim et al. 2022a, b).

RESULTS

PROFILE OF TPB AND FINANCIAL PLANNING BEHAVIOUR RESEARCH

The systematic review of 30 articles covered different insights into the
existing research of the TPB and financial planning behaviour, covering the six
components of financial planning (i.e. cash flow planning, tax planning, risk
management, investment planning, estate planning, and retirement planning)
(Fig.� 2). Appendix 1 summarises the articles in Appendix 2 based on the
approaches of Paul and Mas (2019) and Harmeling et al. (2016). The articles are
classified based on author citations, years, number of citations, methods,
sample, related financial planning components and variables, and lastly
findings. The findings of each article briefly explained how the construct of
the TPB is a predictor or shows a significant effect on financial planning
behaviour.

Based on this review, which begins from 2000 to 2020, the past two decades of
research in the field of behavioural economics (later known as behavioural
finance) have been on continuously identifying and explaining an individual's
finances from an extended social science perspective, which includes psychology
and sociology. Behavioural finance can be defined as the field of study where
psychological factors affect an individual's financial behaviour (Shiller 2003).
The combination of the TPB and financial planning has proven to be impactful
with over 3000 citations among the 30 articles. The articles utilised four
different methods: the quantitative approach (n = 24), the qualitative approach
(n = 3), the mixed method approach (n = 1), and the conceptual approach (n = 2).

Lastly, the TPB (i.e. attitude, subjective norms, perceived behavioural control,
and behavioural intention) has been found to be a good predictor of financial
planning behaviour (i.e. cash flow planning, tax planning, risk management,
investment planning, estate planning, and retirement planning) and possesses
positive relationships with each component of financial planning. For example,
the TPB was found to be positively related to the intention to invest, mental
budgeting behavioural intention, influencing savings and investment, and the
intention to prevent risky credit behaviour, among others.

CONTEXTUALISING THE TPB FOR FINANCIAL PLANNING BEHAVIOUR

Table 2 and Fig.� 3 show the contextualisation of the TPB for financial planning
behaviour, leading to the establishment of the theory of financial planning
behaviour. Pansari and Kumar (2017) suggest the use of such a table to compare
and explain each construct of the framework. The table, which leverages the
findings from the review depicted in Fig.� 2, clearly illustrates how the TPB
can be contextualised to explain financial planning behaviour. Attitude can
manifest as financial satisfaction, wherein individuals who are dissatisfied,
not fully satisfied, or wish to be more satisfied with their financial state
will develop a positive disposition towards financial planning. Subjective norms
can manifest as financial socialisation, wherein individuals learn about
societal expectations of financial planning when they socialise with others
(e.g. family, friends, work colleagues). Perceived behavioural control can
manifest as financial literacy, mental accounting, and financial cognition,
wherein the effect of financial satisfaction and financial socialisation is
mediated through financial literacy, which may be shaped by the capability to
perform mental accounting and the capacity for financial cognition. These
factors can collectively shape the individual's intention to engage in financial
planning, which, in turn, motivates the actual behaviour of engaging in
financial planning, which can take six forms, namely cash flow planning, tax
planning, investment planning, risk management, estate planning, and retirement
planning.

Table 2 Summary of concepts and definitions in contextualising the TPB into the
theory of financial planning behaviour
Full size table
Fig. 3

Visual representation of contextualising the TPB into the theory of financial
planning behaviour

Full size image

REFLECTIONS AND WAYS FORWARD

Behavioural decision-making has been one of the most significant research
interests for economists over the past decades. Past researchers (Xiao and Wu
2006; East 1993; Bansal and Taylor 2002) have applied the TPB to financial
behaviour. The three antecedents of the TPB (attitude, subjective norms, and
perceived behavioural control) were found to be associated with the intention of
an individual and contribute to financial behaviour (Shim et al. 2007; Xiao et
al. 2007). Unlike other theories, the mediating effect of financial literacy can
be applied to the TPB to explain financial behaviour intentions. The variables
of mental accounting and financial cognition were not frequently used by the
researchers in the study of financial planning, while in this study, both
variables are positioned as relevant components of perceived behavioural control
in the TPB.

The concept of mental accounting has been extensively studied in the research
area of psychology on financial decisions (Mahapatra and Mishra 2020). However,
past studies on mental accounting in financial planning are insufficient. The
formation and influences of mental accounting as a cognitive process—which
consists of the concepts of current income, current assets, and future income as
well as mental budgeting—play an important role in the personal financial
planning process to each individual. It serves as a guideline in the process of
financial planning and provides useful insights. Budgeting plays a key role in
managing the financial life of an individual in terms of short-term (e.g.
prioritising spending in different categories) and long-term (e.g. setting aside
money for investment and future use) financial planning.

Previous research has applied mental accounting with the theory of the
behavioural life-cycle model. Shefrin and Thaler (1988) mentioned that people
mentally divide their incomes into current income, current assets, and future
income, where the marginal propensity to consume (MPC) for each account is
relatively different. Mental accounting is helpful and crucial for individuals
to plan for their future financial needs so that they can deal with any
unexpected financial difficulties in the future. However, there are still gaps
to fill to come out with optimal financial decisions. Therefore, given the need
of individuals for personal financial planning, it is necessary to apply mental
accounting to each individual by determining their spending and saving
tendencies.

Moreover, the 2008 global financial crisis and the COVID-19 pandemic have also
taught the world painful lessons; the need for financial literacy and cash flow
control has been highlighted and considered by the public. A study conducted by
Shahrabani (2012) on the effect of financial literacy and intention to control
personal budget concludes that individuals with high levels of financial
knowledge and literacy can influence the intention to have budgetary control.
The study shows a positive relationship between the intention to budget and
financial knowledge. Selvadurai and Siraj (2018) study financial literacy
education and retirement planning in Malaysia. The authors mention that mental
accounting is closely related to financial literacy education. Financial
literacy can enhance mental accounting as it affects the behaviour of an
individual in planning their savings and expenditure. In particular, individuals
who acquire financial literacy education are most likely able to control their
expenditure by not spending more than their income, which results in having
sufficient savings in the long run. The relationship between mental accounting
and financial literacy has been proven to be indispensable.

Cognitive ability also plays an important role in financial literacy as it
entails understanding financial knowledge and the ability to perform with
available resources. While the relationship between financial cognition and
financial literacy is strong, individuals can use their cognitive abilities to
solve financial problems. Yet, the cognitive biases exist and influence
financial decision-making. Agarwal and Muzumder (2013) state that individuals
with no cognitive ability are most likely to face difficulties while making
financial decisions. Also, individuals must at least acquire good memory skills,
conceptual ability, and financial sophistication to be involved in financial
activities. According to Fu et al. (2010), understanding the attitude of an
individual enables one to predict their intentions and behaviour. This could
also influence the formation of their attitude. Lusardi and Mitchell (2014)
mention that cognitive abilities are a significant component of financial
literacy to determine desirable financial decision-making. In the case of
financial literacy, a link between cognitive abilities and the adaptability of
financial decision-making has been studied extensively in the field of personal
finance. An individual must acquire cognitive skills to make a sound financial
decision in an effortless way, which consists of the ability to recall and
utilise financial knowledge (memory) and to implement various numerical
operations (numeracy) (Chirstelis et al. 2010; McArdle et al. 2009). Three
variables were discussed under the model of financial cognition: financial
attitude, risk attitude, and financial knowledge.

Based on the information mentioned above, the mediating effect of financial
literacy on mental accounting and financial cognition is indispensable.
Policymakers and researchers should work on improving financial literacy and
forming positive financial behaviours. Several studies have proven that
financial literacy has slowly become a significant component of rational
financial decision-making and that it also provides implications for financial
behaviour. Individuals or families with higher levels of financial literacy will
have an advantage compared to others and higher wealth accumulation as they have
the knowledge and skills to participate in financial activities (Schmeiser and
Seligman 2013). Past studies have proven that financial literacy plays a
remarkable role in determining financial outcomes in terms of the components of
financial planning (Hilgert et al. 2003). Hence, the need for financial literacy
in financial planning is indispensable, and it should be considered by
individuals as it affects their welfare.

However, no one has attempted to contextualise the TPB and financial planning
with the variable of mental accounting and financial cognition with the
mediating effect of financial literacy to understand and determine financial
behaviour. Thus, this new theory clarifies the conceptualisation and
operationalisation of the theory of financial planning behaviour between the
variables of mental accounting and financial cognition, and, most importantly,
the mediating effect of financial literacy. However, the new theory, in its
present and encompassing form, has yet to be tested empirically, and therefore,
this warrants future research across different financial products across
countries and populations to establish its generalisability.

DISCUSSION AND CONCLUSION

This study developed a new theory called the theory of financial planning
behaviour using the TPB of Ajzen to understand the financial behaviour of
individuals in managing their personal finances. This study examines how the TPB
can be contextualised into a theory that more relevantly explains financial
planning behaviour. The theoretical background section of this study presents a
comprehensive review of the evolution of theories as well as theorisation for
the TPB. With a systematic review of the literature, it can be concluded that
the constructs of the TPB can be contextualised to better explain financial
planning behaviour—that is, the review results showed how different concepts and
factors affect the financial planning of an individual by substituting the
original components of the TPB with financial variables. Moving on, this study
concludes with an articulation of its implications for academics, consumers, and
managers.

IMPLICATIONS FOR ACADEMICS

The main theoretical contribution of this study is the establishment of the
theory of financial planning behaviour. Noteworthily, this new theory represents
a noteworthy attempt to demonstrate how a grand theory such as the TPB can be
contextualised and thus transformed into a new theory that resonates with
realities in the field, in this case, financial planning. The systematic
literature review methodology has also proven itself as a useful approach to
source for scholarly evidence to offer preliminary support for the new theory.

Another noteworthy contribution is the extrapolation of perceived behavioural
control, which answers the call by Lim and Weissmann (2023) to identify or
source for new forms of behavioural control, going beyond the traditional
psychological conceptualisation of self-efficacy. Through this study, three
types of perceived behavioural control were revealed: financial literacy, mental
accounting, and financial cognition. Moreover, the interdependent relationships
between these three forms of perceived behavioural control were also identified
and theorised, wherein the capability of mental accounting and the capacity for
financial cognition shape the financial literacy of the individual, which, in
turn, mediates the effects of financial satisfaction (attitude) and financial
socialisation (subjective norms) on that individual’s intention and actual
behaviour to engage in financial planning.

For researchers seeking to apply the theory of financial planning behaviour in a
study, they might operationalise the variables in the following way. Financial
satisfaction, financial socialisation, and financial literacy could be assessed
using the scales validated by Madinga et al. (2022). Financial cognition and
mental accounting, being somewhat newer constructs in the literature, might
require the development of new scales, which could be validated through
exploratory and confirmatory factor analysis. For data analysis, researchers
might employ a structural equation modelling (SEM) approach to test the
relationships between these constructs, as SEM allows for the simultaneous
examination of multiple relationships among observed and latent variables. This
technique also enables researchers to test the mediating role of financial
literacy in the relationship between financial satisfaction, financial
socialisation, and financial planning behaviour, thereby assessing the
robustness of the proposed theory. If researchers are interested in examining
the moderating effects of certain variables (e.g. age, education, or household
income), they could use moderation analysis to determine whether the strength or
direction of these relationships varies under different conditions.

To this end, the theory of financial planning behaviour should serve as a useful
foundational theory to understand a myriad of individual financial planning
behaviour such as cash flow planning, tax planning, investment planning, risk
management, estate planning, and retirement planning. In this regard, future
research is encouraged to explore for new mechanisms that can positively
influence or strengthen the variables espoused by the new theory, such as
financial satisfaction (e.g. mechanisms that can prompt individuals to evaluate
their financial satisfaction—e.g. advertising), financial socialisation (e.g.
platforms to encourage individuals to socialise within a financial setting—e.g.
metaverse and social media groups), and financial literacy (e.g. ways to enhance
mental accounting capability and financial cognition capacity). Nonetheless,
this study does not discount the possibility of discovering additional
attitudinal, normative, and control variables, which could lead to possible
extensions to the theory of financial planning behaviour, as in the case
witnessed by TPB. Thus, the new theory herein is intended to inspire new ideas,
not to limit them.

IMPLICATIONS FOR CONSUMERS

This study reaffirms the importance of financial planning to safeguard financial
resilience in individuals' daily lives. Adopting financial planning entails
endless benefits for consumers who do so. Noteworthily, it is important to
determine short-term and long-term financial goals and to achieve them via
financial planning. Having these goals in mind can provide a sense of direction
and purpose in life.

This study is important for all consumers who wish to make ideal financial
decisions. Consumers may adopt better cash flow management by implementing
financial planning to have a stable financial flow. A cash flow plan can provide
an estimation of future income and expenses to achieve financial efficiency and
create an emergency fund. Hence, implementing financial planning may help to
relieve financial stress and plan for future needs.

Also, consumers can not only gain monetary benefits but also improve their
financial literacy. The world has slowly become more financialised, where
financial products have developed rapidly and become more complex (Kumar et al.
2023; Goodell et al. 2021), which requires consumers to be financially literate
before making ideal financial decisions (She et al. 2023; Bannier and Schwarz
2018). Thus, financial institution managers and policymakers are working on
improving the financial literacy of consumers and forming positive financial
behaviour.

Indeed, financial literacy is a significant component of rational financial
decision-making, and it also provides implications towards financial behaviour.
Individuals or families with higher levels of financial literacy will have an
advantage compared to others as well as higher wealth accumulation as they have
the knowledge and skills to participate in financial activities.

Crucial to developing financial literacy is the capability to do mental
accounting and the capacity for financial cognition. That is to say, consumers
must seek financial education, be it formally or informally, so that they are
able to identify and evaluate the different options for financial planning.
Similarly, consumers should allocate adequate resources (effort, time) to think
about financial planning, which is not a low but rather high involvement
process.

IMPLICATIONS FOR MANAGERS

Promoting financial planning has always been a major challenge for financial
managers. The newly established theory of financial planning behaviour emerging
from the grand TPB can be put into practice by authorities. The findings of this
study can be used by financial managers to understand the financial planning
behaviour of consumers.

Based on the results and implications of past studies, introducing financial
planning behaviour can benefit banks as well as investment and insurance
companies that aim to promote consumer financial well-being. It can provide
insights into how different factors affect the intention and adoption of
financial planning.

Financial literacy needs to be considered as it is an important mediating factor
that influences the intentions and behaviour of consumers. For example, whenever
a bank introduces financial products to a prospect, that bank must ensure that
the prospect is financially literate or else provide sufficient financial
knowledge before the prospect develop a financial plan or purchase any financial
product from that bank. This is to ensure that their customers possess knowledge
of and clarity on the program or product.

In addition, financial institution managers are encouraged to focus on factors
(i.e. mental accounting, financial cognition, financial socialisation, financial
satisfaction, and financial literacy) that influence customer behaviour towards
financial planning before implementing financial programs. For example,
understanding the budgeting styles and minimum level of financial satisfaction
of customers may help to develop relevant and applicable financial plans for
them. Consider a middle-aged client, John, who has recently experienced a job
loss. John is feeling uncertain about his financial future and seeks advice from
a financial advisor. The financial advisor, following the theory of financial
planning behaviour, would first evaluate John's financial literacy level to
assess his understanding of financial products and concepts. Then, the advisor
would use the theory's constructs such as mental accounting (how John organises
his finances and prioritises spending), financial cognition (how John
understands his financial situation), and financial satisfaction (how content
John is with his current financial state) to develop a comprehensive financial
plan. For instance, the financial advisor may realise that John's financial
cognition is low, indicating a lack of understanding of the severity of his
financial situation. Therefore, to improve his financial cognition, the advisor
would emphasise financial education and assist John in developing better mental
accounting habits, such as setting up separate 'pots' for his savings, expenses,
and investments. This approach is aligned with promoting financial literacy and
ensuring the client's knowledge and clarity on his financial plan, which are
aspects underscored in our theory.

IMPLICATIONS FOR POLICYMAKERS

The findings of this study serve to inform and guide policymaking in significant
ways. Policymakers play a crucial role in shaping the financial landscape that
influences financial planning behaviour. A key aspect is the importance of
financial literacy, which suggests that national education policies should
incorporate financial education from early learning stages. Special focus should
be given to underprivileged and marginalised communities, who may lack access to
financial literacy resources. This might involve legislation mandating financial
institutions to fund these education programs as a part of their corporate
social responsibility.

This study also illuminates the role of mental accounting and financial
cognition in financial planning behaviour. This could inspire policymakers to
collaborate with technology developers to create user-friendly digital tools and
applications that promote mental accounting practices. Such initiatives should
be supported by national policies encouraging technological innovation in the
financial sector.

Furthermore, the impact of financial satisfaction on financial planning
behaviour underscores the need for regulation in financial advertising.
Policymakers should ensure that financial advertising does not create
unrealistic expectations that lead to dissatisfaction, and transparency should
be mandated, with severe penalties for institutions found to be misleading
consumers.

Moreover, the study's findings encourage the creation of financial socialisation
platforms. Policies should support the development of both online and offline
platforms for learning, sharing, and discussing financial planning strategies
and experiences. Policymakers should work with technology companies, local
communities, and financial institutions to ensure these platforms are safe,
accessible, and inclusive.

Lastly, the responsibility of policymakers extends to the protection of citizens
from unfair financial practices. Legislation should ensure transparency in
financial markets, particularly regarding fees, interest rates, and risks
associated with financial products. Policymakers may also consider mandating
financial counselling for complex financial decisions, such as mortgages or
large investments, to increase financial satisfaction.

LIMITATIONS AND FUTURE RESEARCH DIRECTIONS

Notwithstanding the contributions of this study, several limitations exist that
may pave the way for future research.

First, financial planning behaviour remains in the infant stage and thus the
newly established theory was limited to available evidence. In this regard, this
study does not discount the possibility of extending the theory of financial
planning behaviour in enriching ways, such as by adding new dimensions of the
original TPB components (e.g. additional forms of perceived behavioural
control).

Second, the theory of financial planning behaviour has not been empirically
examined in its entirety. Thus, future research is encouraged to adopt or adapt
this newly established theory in empirical investigations to ascertain its
reliability, validity, and generalisability.

Third, the systematic literature review herein was limited to a single
theoretical lens (TPB). As indicated through the theoretical foundation
discussion, multiple theories exist to explain financial planning behaviour. In
this regard, it is important to acknowledge that the development of theories in
this area is continuously evolving. As other theories mature, it would be
beneficial for future research to consider conducting similar reviews using
those theories, to provide a more comprehensive understanding of financial
planning behaviour. This could potentially uncover novel insights and lead to
the development of new frameworks that could more holistically explain
individuals' financial behaviours.

Fourth, the outcomes of financial planning have not been theorised. While the
assumption is that good financial planning results in financial resilience,
further investigation is needed to empirically verify this assumption. Further
exploration of other possible outcomes is also encouraged, both at the
micro-level (e.g. life satisfaction, quality of life) and at the macro-level
(e.g. country happiness and financial strength).

Fifth, the relationships in the theory of financial planning behaviour are
inherently linear. Nonetheless, as experience in financial planning accumulates
over time, this study does not discount the possibility of a cyclical loop that
reinforces the said relationships. In this regard, future research that
extrapolates the theory through a longitudinal perspective is also encouraged.

Sixth, the research landscape of financial behaviour is broad and includes other
aspects such as financial counselling and financial therapy. Although these
areas were not covered in this study, they may be relevant in the context of the
TPB and could contribute to a more comprehensive understanding of financial
behaviours. Thus, future research could consider investigating these areas using
the TPB, which could also include other related theories, as a guiding
theoretical framework. The expansion of search terms in subsequent studies would
allow for a more diverse exploration of financial behaviours, potentially
enhancing the generalisability and applicability of the findings. Furthermore,
it may also reveal a broader range of factors influencing financial planning
behaviour and related areas. Hence, researchers are encouraged to extend the
current study by exploring the use of TPB alongside related theories in
different areas of financial behaviour.

In closing, while this study viewed financial planning within the context of
behavioural finance, it is crucial to underscore the fact that financial
planning is a distinct profession with its own body of literature. Financial
planning transcends the boundary of understanding and predicting individual
financial behaviours. It encompasses a broad spectrum of activities, from cash
flow management to estate planning, which are geared towards enhancing an
individual's economic satisfaction. Each of these areas possesses a unique set
of complexities and necessitates a specialised set of knowledge and skills. The
profession of financial planning is dedicated to addressing these complexities
and enhancing individuals' financial well-being. Our exploration of financial
planning behaviour through behavioural finance should be seen as a facet of the
broader, multi-dimensional discipline of financial planning. Future research
should therefore endeavour to add to the rich and varied literature of financial
planning to offer a more holistic and nuanced understanding of financial
behaviour.

NOTES

1. Based on a search for “personal finance” in the “title, abstract and
keywords” and the subject area of “business, management and accounting” in
Scopus on 25 December 2022.

2. Smooth consumption refers to consumption that balances or optimises spending
and saving during different life phases to achieve the greatest overall
standard of living (Morduch 1995).

3. Instead of Scopus or Web of Science, which are subscription-based, Google
Scholar was used as the search mechanism because it is free to use and thus
more accessible. Source quality can still be maintained by referring to
Scimago Journal Ranks, which relies on Scopus, and Web of Science Master
Journal List, albeit manually. With the journal lists acting as a
cross-check mechanism and without the need for bibliometric data, Google
Scholar is deemed to be adequate for the search and review. This practice is
similar to that of existing reviews (e.g. Lim and Weissmann 2023; Lim et al.
2021).

4. Unlike Scopus or Web of Science, which use search string, Google Scholar use
search keywords.

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AUTHOR INFORMATION

AUTHORS AND AFFILIATIONS

1. Faculty of Business, Design and Arts, Swinburne University of Technology,
Jalan Simpang Tiga, 93350, Kuching, Sarawak, Malaysia

Kingsley Hung Khai Yeo,� Weng Marc Lim� &� Kwang-Jing Yii

2. School of Business, Law and Entrepreneurship, Swinburne University of
Technology, John Street, Hawthorn, VIC, 3122, Australia

Weng Marc Lim

3. Sunway Business School, Sunway University, Jalan Universiti, 47500, Sunway
City, Selangor, Malaysia

Weng Marc Lim

Authors
1. Kingsley Hung Khai Yeo
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2. Weng Marc Lim
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3. Kwang-Jing Yii
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CONTRIBUTIONS

KHKY did conceptualisation, investigation, methodology, data curation, formal
analysis, visualisation, writing—original draft; WML done conceptualisation,
investigation, methodology, supervision, writing—review and editing; K-JY was
involved in conceptualisation, investigation, methodology, supervision,
writing—review and editing.

CORRESPONDING AUTHOR

Correspondence to Weng Marc Lim.

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APPENDICES

APPENDIX 1: ARTICLES ON FINANCIAL PLANNING BEHAVIOUR AND TPB

No.

(n = 30)

Article

Year

(2000 to 2020)

Citation

(n = 2898)

Method

(n = 4)

Sample

(n = 43,361)

Related financial planning components and financial variables

Findings

Aziz et al. (2017)

2017

Conceptual

Investment planning

Risk management

TPB (attitude, subjective norms, and perceived behavioural control) informs the
adoption of family Takaful

Nosi et al. (2017)

2017

Quantitative

7480

(Italian people aged 25 to 35� years)

Retirement planning

TPB (attitude, subjective norms, and perceived behavioural control) predicts
longevity annuity-buying intention

Paramita (2018)

2018

Quantitative

(Investors)

Investment planning

TPB (behavioural intention) leads to doing certain actions such as investment in
stocks

Ali et al. (2014)

2014

Quantitative

180

(Academic staff)

Investment planning

TPB (attitude and perceived behavioural control) possesses a positive
relationship with investors’ intention to invest

Warsame and Ireri (2016)

2016

Quantitative

553

(Residents from Qatar)

Investment planning

TPB (attitude and perceived behavioural control) has a positive direct effect on
behavioural intention to use Sukuk

Habibah et al. (2018)

2018

Quantitative

275

(Pakistani households)

Cash flow planning

Mental accounting

TPB (attitude and past behaviour) significantly affects mental budgeting
behavioural intention

Cloutier and Roy (2020)

2020

Quantitative

1323

(Canadian university students)

Cash flow planning

Risk management

TPB (perceived behavioural control and self-efficacy) of high levels are more
likely to not have risky credit behaviour

Danes and Yang (2014)

2014

Conceptual

Financial socialisation

Financial literacy

Cash flow planning

The greater the TPB (attitude) towards performing a behaviour and the greater
the perceived social approval, the stronger the chances of performing a certain
behaviour are perceived to be and the stronger the behavioural intention

Shim et al. (2009)

2009

703

Quantitative

2098

(First-year college students)

Financial socialisation

Cash flow planning

TPB (attitude, subjective norms, and perceived behavioural control)
significantly influences financial behaviour

Al Balushi et al. (2018)

2018

Qualitative

385

(SMEs)

Cash flow planning

Investment planning

TPB (attitude, subjective norms, and perceived behavioural control) is a
significant predictor of SMEs’ intention to adopt Islamic financial instruments

Croy et al. (2012)

2012

Quantitative

2339

(Australian superannuation funds individuals)

Investment planning

Retirement planning

TPB (subjective norm) is the most influential predictor towards the intention of
retirement savings decisions

Taing and Chang (2020)

2020

Quantitative

402

(Cambodian citizens)

Tax planning

TPB (attitude, subjective norms, and perceived behavioural control) is a
significant predictor of tax compliance intention

Magwegwea and Lim (2020)

2020

Quantitative

16,406

(Nonretired households)

Retirement planning

TPB (attitude, subjective norms, and perceived behavioural control) is
associated with preparing and calculating retirement saving needs

Xiao and Wu (2008)

2008

Qualitative

329

(Debt management plan clients)

Cash flow planning

TPB (attitude, subjective norms, and perceived behavioural control) directly
affects the target behaviour

Griffin

(2012)

2012

Qualitative

432

(Employees)

Retirement planning

TPB (attitude, subjective norms, and perceived behavioural control) is a
predictor of retirement planning behaviour

Koropp

(2014)

2014

164

Quantitative

118

(Germany family firms)

Cash flow planning

TPB (attitude and subjective norms) positively affects financing behaviour of
family firms

Gopi and Ramayah (2007)

2007

389

Quantitative

144

(Internet stock trading investors)

Investment planning

TPB (attitude, subjective norms, and perceived behavioural control) shows a
positive relationship towards behavioural intention on online stock trading

Xiao and Wu (2006)

2006

Quantitative

326

(Debt management plan clients)

Cash flow planning

TPB (attitude and perceived behavioural control) is positively associated with
the behavioural intention of debt-reducing behaviour

Xiao et al. (2011)

2011

300

Quantitative

2098

(First-year students)

Financial literacy

Cash flow planning

TPB (subjective norms, perceived behavioural control, and behavioural intention)
prevents risky credit behaviours

Rutherford and Devaney

(2009)

2009

172

Quantitative

3476

(American households)

Cash flow planning

TPB (attitude, subjective norms, and perceived behavioural control) affects
credit card users’ behaviour

Kimiyagahlam et al. (2019)

2019

Quantitative

900

(Adults)

Retirement planning

TPB (attitude, subjective norms, and perceived behavioural control) shows a
positive relationship with retirement planning behaviour

Akhtar and Das (2018)

2018

Quantitative

920

(Investors)

Investment planning

Financial literacy

TPB (attitude and perceived behavioural control) shows a strong positive effect
on investment intention

Husin and Rahman

(2016)

2016

Quantitative

384

(Muslim individuals)

Investment planning

TPB (attitude and perceived behavioural control) shows a positive relationship
towards intention to participate in family Takaful schemes

Nurwanah et al. (2018)

2018

Quantitative

560

(Taxpayers)

Tax planning

TPB (attitude and subjective norms) shows a significant effect on the
behavioural intention of tax compliance

Kumar et al. (2018)

2018

Quantitative

396

(Investors)

Investment planning

TPB (attitude, subjective norms, and perceived behavioural control) shows a
positive relationship towards the individuals’ behavioural investment intentions

Lai (2019)

2019

Quantitative

385

(Investors)

Investment planning

TPB (attitude, subjective norms, and perceived behavioural control)
significantly affects individuals’ stock investment intentions

Hofmann et al. (2007)

2008

111

Quantitative

141

(Students)

Investment planning

TPB (attitude, subjective norms, and perceived behavioural control) can be used
to explain bidding behaviour

Sultana et al. (2018)

2018

Mixed

343

(Investors)

Investment planning

TPB (attitude, subjective norms, and perceived behavioural control) can be used
to explain investment decisions

Raut (2020)

2020

Quantitative

448

(Investors)

Investment planning

Financial literacy

TPB (attitude, subjective norms, and perceived behavioural control) is
successfully applied to understand investors’ intentions

Kimiyaghalam et al. (2017)

2017

Quantitative

520

(Adults)

Financial socialisation

Retirement planning

TPB (attitude, subjective norms, and perceived behavioural control) is
successfully applied to explain individuals’ retirement planning

1. NA not available, TPB theory of planned behaviour.

APPENDIX 2: LIST OF ARTICLES REVIEWED

Akhtar, F. and Das, N. (2019). Predictors of investment intention in Indian
stock markets. International Journal of Bank Marketing 37(1): 97–119.

Ali, S., Zani, R. M., and Kasim, K. (2015). Factors influencing investors'
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Yeo, K.H.K., Lim, W.M. & Yii, KJ. Financial planning behaviour: a systematic
literature review and new theory development. J Financ Serv Mark 29, 979–1001
(2024). https://doi.org/10.1057/s41264-023-00249-1

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* Received: 14 June 2023

* Revised: 31 July 2023

* Accepted: 05 September 2023

* Published: 03 October 2023

* Issue Date: September 2024

* DOI: https://doi.org/10.1057/s41264-023-00249-1

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KEYWORDS

* Behavioural finance
* Financial literacy
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* Systematic literature review
* Theory of planned behaviour
* Theory of financial planning behaviour

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