The Role of Financial Literacy and Financial Quotient as Determining Factors of the Emotional Quotient

This study aims to assess financial literacy’s impact on financial well-being, analyze the relationship between financial literacy and financial quotient, and explore the interplay between financial and emotional quotient. The leading information source for this study is primary data. The research’s target population consists of small and medium-sized businesses in the Yogyakarta Special Region that are involved in the food and beverage sector. The sample chosen consisted of 170 respondents who are small and medium-sized enterprise (SMEs) operators, using a proportional simple random sampling technique—data analysis utilizing the AMOS Structural Equation Modeling (SEM) model. The findings indicated a correlation between financial literacy and financial quotient, as well as a correlation between the impact of financial quotient and emotional quotient. An individual’s financial literacy directly influences their financial intelligence. An individual with a high level of emotional intelligence also tends to have good financial capability in managing finances and improving the welfare of himself and his family members. Nevertheless, the level of financial knowledge does not affect emotional intelligence. Evidence also suggests that emotional intelligence does not necessarily enhance and promote an understanding of financial literacy.