Does Digital Investment Engagement Translate into Financial Well-Being? Digital Financial Literacy and Financial Parenting Among Indonesian Generation Z

Digital platforms are making it easier for Generation Z to invest. However, whether the ease of access actually improves financial well-being is still uncertain. This study answers two questions. First, does digital investment behavior mediate the relationship between digital financial literacy and financial well-being? Second, does financial parenting remain related to financial well-being when digital influence and peers are analyzed simultaneously? Survey data from 225 Indonesian Generation Z respondents who expressed interest in investment products were analyzed using partial least squares structural equation modeling (PLS-SEM). Digital financial literacy was formulated as a reflective–formative high-level construct that includes digital literacy, financial knowledge, and attitudes towards digital finance. Digital financial literacy (b = 0.614) and financial parenting (b = 0.268) were positively associated with financial well-being, while the model explained 52.3% of the variance. Digital investment behavior, social media use, and herding behavior did not show a significant relationship with financial well-being. Two mediation pathways were tested separately. The indirect influence of digital financial literacy on financial well-being through digital investment behavior was not significant (b = −0.022), as was the indirect effect of social media use on financial well-being through digital investment behavior (b = −0.010). The estimated results remained consistent when herding behavior was excluded from the model. In this group of respondents, financial well-being was more related to financial competence and financial socialization in the family than to investment activities.