Determinants of financial well-being among Millennials and Generation Z in Indonesia

Abstract

Technological advancements have transformed the lives of Millennials and Generation Z, particularly in the realm of payments. The variety of payment methods has expanded to include QRIS, e-money, bank transfers, and cash. The growing convenience of payment requires enhanced consumer financial literacy. Moreover, perspectives on deferred payment and financial attitudes are essential for sustainable financial planning. This study seeks to analyze the determinants affecting financial well-being among Generation Z and Millennials in Indonesia. Both quantitative and qualitative methodologies were employed. Data collection using purposive sampling. Three hundred respondents were recruited. The instruments employed were assessed for validity and reliability. Instrument and hypothesis testing employed structural equation modeling with partial least squares (SEM-PLS). The hypothesis test results demonstrate that financial attitude is the predominant factor affecting financial well-being. Financial literacy does not directly affect financial well-being; rather, it influences it indirectly by mediating financial behavior. The attitude towards pay-later options does not significantly affect financial behavior or financial well-being. The originality of this study resides in its analysis of financial literacy, attitudes towards deferred payment, and financial attitudes concerning behavior and well-being.