Retnoningrum Hidayah

Type of the article: Research Article

Abstract
The rapid expansion of digital financial services has reshaped how young adults manage money, presenting both new opportunities and behavioral risks. Although financial literacy is widely recognized as a key driver of financial well-being, empirical evidence regarding its direct impact remains mixed. This study examines the indirect pathways through which financial literacy influences financial well-being, focusing on the mediating roles of digital financial literacy, financial capability, financial autonomy, and impulsivity.
A quantitative online survey was administered to 984 Indonesian respondents from Generation Z, and the data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that financial literacy significantly enhances digital financial literacy, which subsequently strengthens financial capability and decision-making processes. Among all mediators, financial capability consistently emerges as the most influential pathway, whereas impulsivity does not demonstrate a meaningful mediating effect. The structural model accounts for 57.3% of the variance in financial well-being, highlighting the central role of digital competence and capability development in shaping positive financial outcomes.
The study contributes to the literature by integrating cognitive, behavioral, and psychological factors into a single explanatory framework of financial well-being among digitally active young adults. From a practical perspective, the findings underscore the need for financial education initiatives that combine foundational literacy with digital financial skills and capability-building elements. Policymakers and financial service providers in emerging economies are encouraged to strengthen accessible digital tools and targeted interventions for younger populations.

Acknowledgments
The authors acknowledge the financial support from the Institute for Research and Community Service (LPPM), Universitas Andalas, through the Flagship Research Scheme (PUJK), Batch I, Contract No. 368/UN16.19/PT.01.03/PJUK/2024. Appreciation is also extended to the Faculty of Economics and Business, Universitas Andalas, for its institutional support and facilities that contributed to the completion of this research.