The Impact of Digital Financial Literacy on Financial Behavior among Generation Z in Sri Lanka

ABSTRACT

Digital financial literacy (DFL) has become an essential determinant of financial decision-making in modern economies, especially with the rapid expansion of financial technologies. This study investigates the impact of digital financial literacy on household financial behavior among Generation Z in the Ratnapura District of Sri Lanka. The research adopts a quantitative approach using a structured questionnaire distributed to 379 respondents, with 146 valid responses analyzed. The study is grounded in the Technology Acceptance Model (TAM), emphasizing perceived usefulness and perceived ease of use as key drivers of digital financial behavior. Data analysis was conducted using SPSS and Smart PLS, incorporating descriptive statistics, correlation analysis, and structural equation modeling (SEM). Findings reveal a strong positive relationship between digital financial literacy and financial behavior. Among DFL dimensions, awareness and decision-making significantly influence financial behavior, while digital knowledge, applications, and self-protection show weaker or insignificant relationships. Additionally, DFL positively impacts saving behavior, shopping behavior, and both short-term and long-term financial planning. The study contributes to existing literature by addressing a gap in Sri Lanka regarding household financial behavior and digital literacy. It provides practical implications for policymakers, financial institutions, and educators to enhance digital financial literacy among youth.