Digital smarts, financial starts: How digital financial literacy influences spending, saving, and financial well-being

Abstract

In recent years, digital financial literacy (DFL) has garnered considerable attention due to the growing integration of digital technologies into daily life. While younger generations are often assumed to be naturally adept with technology, studies suggest that their skills in managing finances in the digital environment remain limited. This study investigates the impact of DFL on spending behaviour, saving habits, and financial well-being (FWB) among members of Generations Y and Z. Using purposive sampling, data were collected through an online questionnaire, yielding responses from 167 participants. The findings indicate that DFL positively and significantly influences saving behaviour and FWB but does not have a significant effect on spending behaviour. Furthermore, saving behaviour mediates the relationship between DFL and FWB, however spending behaviour does not moderate this relationship. From a theoretical perspective, this study contributes to the relatively sparse literature on DFL and its role in shaping financial behaviours among Gen Y and Gen Z. Practically, the results highlight the importance of improving individuals’ skills in using digital tools and platforms to enhance their financial decision-making. Future research could benefit from including factors such as digital trust and awareness of digital security to gain a more comprehensive understanding of financial behaviour in the digital age. Additionally, adopting a longitudinal approach could provide valuable insights into how DFL develops over time and influences financial practices across different stages of life.