The Role of Digital Financial Literacy, Behavior, and Psychological Factors in Promoting Financial Well-Being and Sustainable Development in Indonesia

The Role of Digital Financial Literacy, Behavior, and Psychological Factors in Promoting Financial Well-Being and Sustainable Development in Indonesia Abstract- This study explores how Digital Financial Literacy (DFL) and Locus of Control (LOC) affect Financial Well-Being (FWB) in young adults in Indonesia, with Financial Behavior (FB) acting as a middle factor. The researchers collected data from 300 people aged 18–50 who use digital financial services. They used a method called PLS-SEM to analyze the results. The findings show that Digital Financial Literacy strongly improves both Financial Behavior and Financial Well-Being, and that good financial behavior helps explain how financial knowledge leads to better financial well-being. On the other hand, Locus Of Control has a small effect on Financial behavior and does not directly improve Financial Well-Being. This suggests that while knowing how to manage money and having good habits are important, psychological traits like Locus Of Control may need extra support through behavior changes. These results can help improve financial education, shape better policies, and create helpful digital financial tools for young Indonesians. The study also supports global development goals (SDGs), such as ending poverty (SDG 1), improving education (SDG 4), providing better jobs (SDG 8), and reducing inequality (SDG 10), by promoting smarter money habits and helping people become more financially ready especially in developing countries. Keywords: Financial well-being, Digital Financial Literacy, Digital Transformation, Financial Development, Youth Empowerment. Please consider reducing the number of keywords to a maximum of five. Selecting the most relevant and specific keywords will enhance discoverability and improve the clarity of the article’s focus