Digital Financial Literacy and Financial Well-being: The Mediating Role of Impulsivity, Self Control and Financial Behavior

Abstrak

Digital financial service innovations have become part of people's financial lives, especially among the younger generation. However, increased access to digital financial services has not been matched by adequate literacy, which ultimately impacts individuals' financial well-being. This study analyzes the influence of digital financial literacy, impulsivity, self-control, and financial behavior on the financial well-being of millennials in Java. In this study, digital financial literacy is treated as a multidimensional construct consisting of digital financial knowledge, experience, and skills. This study assesses how these three dimensions of digital financial literacy influence impulsivity, self-control, and financial behavior, as well as how these psychological factors contribute to financial well-being, including the mediating role they play. Applying a quantitative approach with Structural Equation Modelling (SmartPLS), data from 310 respondents were analyzed. The results show that all dimensions of digital financial literacy reduce impulsivity and increase self-control and financial behavior. Self-control and financial behavior are proven to improve financial well-being, while impulsivity has no significant effect. In addition, self-control and financial behavior mediate the relationship between digital financial literacy and financial well-being, while impulsivity does not play a mediating role. These findings conclude that good digital literacy shapes more disciplined financial management patterns, thereby improving the financial well-being of the millennial generation.