Household financial health is crucial as financial distress significantly impacts individual well-being and mental health. This study explores the role of collectivism in financial well-being, focusing on its impact on financial distress and the mediating effect of adherence to financial plans. The research further investigates how household financial decision-making dynamics moderate the relationship between collectivism and individual financial behaviors. Using a multi-method approach, the study integrates data from the Longitudinal Internet Studies for the Social Sciences (LISS) panel and a targeted survey via Prolific. Study 1 employs machine learning and the DALEX framework to identify collectivism as the most significant predictor of financial distress among various personality traits. Study 2 further examines the mechanisms linking collectivism to financial distress, proposing and testing a conceptual model. The results reveal that collectivism positively influences adherence to financial plans, which in turn mediates its negative relationship with financial distress. Additionally, the study highlights the moderating role of household financial decision-making power, showing that greater autonomy in financial decision-making strengthens the positive impact of collectivism on stick-to-plan behavior. These findings contribute to understanding the intersection of personality, financial behavior, and household dynamics, providing practical implications for designing financial education programs and policies that promote financial resilience and reduce financial distress, especially in cultural contexts where collectivist values are prominent.
