How do students’ digital financial literacy and financial confidence influence their financial behavior and financial well-being?

Abstract

Purpose: An understanding of financial literacy is important not only for business actors but also for individuals and households; even there is a need to introduce this all-important skill to children early. There is a projection that the financial behavior of the young generation will have a better influence on the global economy than that of the previous generation. Therefore, it is crucial that today’s young generation understands financial literacy. This study aims to measure how digital financial literacy and financial confidence can influence both the financial behavior and financial well-being of the younger generation.
 Design/methodology/approach: The participants in this study are university students from all over Indonesia. This is a quantitative research project that uses online questionnaires, and the collected data is processed using structural equations mode-partial least squares (SEM-PLS) with the Smart-PLS application. Questionnaires have been distributed and obtained by 353 respondents to be processed by the Smart-PLS application.
 Finding: The result indicates that digital financial literacy has a significant effect on financial behavior, and financial behavior also has a significant effect on financial well-being. Meanwhile, financial confidence influences both financial well-being and financial behavior.
 Conclusion: This research contributes to the body of knowledge by providing information to the public about the importance of digital financial literacy for individuals to control their financial behaviour amidst the rapid growth of financial technology. Furthermore, the research findings are enriched with literature on digital financial literacy, which is still rarely studied. However, a limitation of this study is the fact that the respondents are mainly women. Therefore, there should be further research involving a higher number of respondents and covering a wider research location.

How do digital financial literacy, financial behavior, and skills affect financial well-being? An Exploratory Study on Gen Z

“…The result from the mediation analysis show that financial behaviour mediates the relationship between DFL and FWB, however the mediation role of financial skill on the relationship between DFL and FWB is not statistically supported. The finding of this study appears to be aligned with the findings of some studies that found that DFL has a significant effect on financial behavior, and financial behavior also has a significant effect on FWB (Respati et al, 2023). Another study that share similar results is Setiawan et al (2022), who found that DFL also positively affects the current saving and spending behavior.…”

“…Another study in India found that skills directly affect financial decision-making and perceived financial well-being, and digital financial literacy emerges as a direct and mediating predictor of financial decision-making (Kumar et al, 2023). The mediation effect of financial behavior on the relationship between DFL and FWB is also evident in the literature, confirming the indirect association between the two constructs (Jhonson et al, 2023;Respati et al, 2023). Centered on the discussion mentioned above, this study is conducted with the following two objectives.…”

“…The government, as the policymakers and the community as active participants must have a proper understanding about the benefits and risks presented by this digital fintech (Setiawan et al, 2020). Previous empirical evidence showed that DFL influence FWB directly or indirectly (Choung et al, 2023;Jhonson et al, 2023;Respati et al, 2023). Another study found that skills have a direct influence on financial decision making and perceived financial well-being, with digital financial literacy emerging as a direct and indirect predictor of financial decision making (Kumar et al, 2023).…”

“…Moreover, according to Setiawan et al (2022), the current saving and spending behavior contributes to future saving and spending foresight, leading to a better FWB. A similar study found that DFL has a significant effect on financial behavior, and financial behavior has a significant effect on university students' financial well-being (Respati et al, 2023). Furthermore, The Bureau of Consumer Financial Protection conducted composed financial skills' measurement and tested them as part of the 2016 National Financial Well-Being Survey (BCFP, 2018).…”

The impact of entrepreneurial course instructors' abilities on students' learning outcomes and the mediating role of students' self-efficacy: A case study of schools in China

“…This indicates that entrepreneurship education was a flourishing field in the past. The previous educational system frequently helped students build their professional abilities to start their own business strategies [15,16].…”