Amanda Dwi Kurnia, Salsabella Nur Ikhsaniyah, Maharani Zuroida, Aldi Saputro, Irwan Adimas Ganda Saputra

The Dynamics Of Impulse And Control In Generation Z’s Financial Well-Being

Introduction

The dynamics of impulse and control in generation z’s financial well-being. Explore Gen Z's financial well-being, examining how FOMO and financial knowledge, moderated by self-control, impact their decisions. Uncover FOMO's dual role in a digital world.

Abstract

Generation Z is entering adulthood, which is why their status as digital natives exposes them to high online distractions, particularly the fear of missing out (FOMO). Recent data shows that 77% of Generation Z purchasing decisions are influenced by social media, so this study aims to evaluate the effect of FOMO and financial knowledge on financial well-being with self-control as a moderating variable. An online questionnaire, 322 Gen Z respondents were selected using the Hair formula. Data were analyzed by path analysis through SmartPLS 4.0. The results suggest noteworthy impacts of both FOMO and financial well-being (FWB) on this demographic, such that while each factor contributes to explaining individual financial well-being, only one of them acts as a moderator. The variance in financial well-being explained by this model is the 61.9% with an acceptable data fit. FOMO can be a motivator to seize financial opportunities. Overall, this study deepens the insight into financial behavior by providing a brief overview of both sides of FOMO in the digital world, and incorporating self-control as a psychological filter when making financial decisions.

Review

This study, "The Dynamics Of Impulse And Control In Generation Z’s Financial Well-Being," addresses a highly pertinent and timely topic by investigating the complex interplay of digital influences and psychological factors on the financial well-being of Generation Z. The authors effectively highlight the unique challenges faced by this demographic, such as high online distractions and the pervasive influence of social media on purchasing decisions, establishing a compelling rationale for evaluating the effects of FOMO and financial knowledge. The incorporation of self-control as a moderating variable is particularly insightful, promising to offer a nuanced understanding of how individuals navigate financial decisions in a digitally saturated environment. Methodologically, the research employs an online questionnaire with a robust sample size of 322 Gen Z respondents, selected using the Hair formula, and utilizes path analysis via SmartPLS 4.0, which is a suitable approach for examining complex relationships. The abstract reveals significant findings, indicating noteworthy impacts of both FOMO and financial well-being on this demographic, with self-control playing a crucial moderating role. The model demonstrates strong explanatory power, accounting for 61.9% of the variance in financial well-being with an acceptable data fit. A particularly intriguing finding is the suggestion that FOMO can paradoxically act as a motivator for seizing financial opportunities, adding a valuable dimension to the understanding of this commonly perceived negative influence. Overall, this study makes a significant contribution by deepening our insight into the evolving financial behavior of Generation Z, a critical demographic as they transition into adulthood. By exploring both sides of FOMO and integrating self-control as a key psychological filter, the research offers valuable perspectives for academics, financial educators, and policymakers alike. The findings are highly relevant for designing targeted interventions and educational programs aimed at enhancing financial literacy and well-being in the digital age, effectively bridging the gap between digital native experiences and sound financial decision-making.

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