Digital financial literacy and quality of life: the moderating role of smartphone addiction and financial stress

Purpose Despite growing enthusiasm for digital financial literacy (DFL) as a tool to enhance household well-being, its actual behavioural impact remains uncertain. Many individuals with digital financial skills still suffer from poor financial outcomes and low quality of life (QoL). This study draws on social cognitive theory and perceived risk theory to explore the psychological mechanisms behind this paradox, incorporating financial stress and investment decision-making (ID) as mediators and smartphone addiction (SA) as a behavioural moderator. Design/methodology/approach Based on data from 406 urban-rural residents in central China, we used partial least squares structural equation modelling (PLS-SEM) and artificial neural networks (ANN) to assess both linear and non-linear effects. Findings Results show DFL significantly promotes ID and QoL, but its effects weaken under high smartphone addiction. Interestingly, financial stress does not directly impact ID or QoL, indicating possible psychological defence or cognitive overload. ANN analysis confirms the primary roles of DFL and ID in shaping QoL and identifies smartphone addiction as a key inhibitor in the DFL–stress path. Originality/value This study contributes to behavioural finance by revealing hidden frictions that limit DFL’s functional effectiveness. We advocate for redesigning digital financial interventions to address behavioural disruptors, with implications for targeted education, app-based nudges, and psychological support tailored to high-stress or digitally saturated populations.