Assessing the Relationship between Digital Financial Literacy and Financial Well‐being Exploring the Moderating Effect of Financial Self-Efficacy Section Articles

Abstract

The study explores the effect of Digital Financial Literacy (DFL) on Financial Well-Being (FWB) among young adults. It also investigates the moderating role of financial self-efficacy (FSE) between DFL and FWB. It is a quantitative study based on a questionnaire survey. Data was collected from digitally literate young adults aged 18-26 through an online questionnaire. The questionnaire has three constructs: DFL, FWB, and FSE. The sample size was determined according to itemized sampling criteria. The data was analyzed and the hypotheses were tested through SPSS and PLS-SEM (Partial Least Squares Structural Equation Modeling). The findings showed that DFL and financial self-efficacy have a significant positive direct effect on financial well-being. The proposed moderating hypothesis was not accepted and indicates financial self-efficacy did not moderate the relationship between DFL and financial well-being. It noted that a greater FSE strengthens the positive relationship between DFL and FWB, on the other hand, a lower FSE may lessen the positive effect. Financial organizations, such as banks and fintech organizations, can organize seminars and campaigns to instruct young adults on the proper use of digital financial platforms. Enhancing young adults' DFL and FSE leads to increased financial independence, stability, and well-being to make wise financial decisions while reducing their financial stress. It offers novel insights into the relationship between young adults' financial well-being and their level of financial selfefficacy and DFL.