Personal Loans and Well-being: The Moderating Role of Financial Literacy and Spousal Employment in the Military Context

Abstract

This study examines how taking personal loans affects the economic and psychological well-being of officers in the Sri Lanka Air Force (SLAF). It also examines whether financial literacy and spousal employment change this relationship. Data were collected through a structured survey from 317 SLAF officers. The findings show that personal loans are positively related to both economic and psychological well-being. Importantly, officers whose spouses are employed reported higher well-being, showing that spousal employment helps reduce the negative effects of debt. However, financial literacy did not significantly influence the relationship between loans and well-being. This suggests that having another income in the household is more helpful than simply having financial knowledge. The study recommends that military financial programs consider family income when assessing financial risks and provide better support for officers through targeted counselling. These findings are useful for improving well-being in military settings where debt is common.