The interplay of skills, digital financial literacy, capability, and autonomy in f inancial decision making and well-being

Abstract

Covid-19 and the unprecedented surge in financial technology contributed to unexpected financial challenges, affecting the relevance of f inancial decision making and perceived financial well-being. This paper examines the mediating effects of digital financial literacy, financial autonomy, financial capability, and impulsivity on financial decision making and perceived financial well-being. The data come from 512 re spondents in Delhi/NCR (National Capital Region), India, using a snowball-sampling technique and partial least squares structural equation modeling to test 13 structural hypotheses with SmartPLS3.3. Partial least squares (PLS) prediction is employed to estimate the out-of-sample predictive power of the proposed model. Our findings reveal that skills directly affect financial decision making and perceived financial well being, and digital financial literacy emerges as a direct and mediating predictor of financial decision making. The dominance of financial capability and financial autonomy as mediators in financial decision making and financial well-being become more evident, and impulsivity fails to have mediating effects on financial decision making. The results have academic, regulatory, and managerial implications, all of which calls for more concerted efforts at recognizing the unique interaction among skills—financial decision making—perceived financial well-being, the cu mulative effect of which enhances the critical ability to deal with environmental challenges, manage socioeconomic pressures in a sustainable manner, and translate the benefits into prudent gender-specific policy decisions and practices.