How Do Family Financial Socialization and Financial Literacy Dimensions Shape the Financial Well-Being of Indonesian Millennials? A Serial Mediation Analysis

Millennials comprise the vast majority of Indonesia’s population, shape the country’s future, and serve as the backbone of the Indonesian economy. Hence, further empirical investigation on Indonesian millennials’ financial well-being (FWB) is imperative. This study examines how family financial socialization correlates to Indonesian millennials’ FWB and how the financial literacy dimensions (i.e., financial awareness, knowledge, attitudes, skill, and behavior) interact and relate to FWB. Through an online survey questionnaire, data was collected from a sample of 1,026 millennials from several provinces in Indonesia using a convenience sampling technique. Variance-based structural equation modeling was used to assess the measurement via serial mediation models. The results indicate that financial skill and behavior serially mediate the positive relationship between family financial socialization and FWB of Indonesian millennials; the results also reveal that financial skill and financial behavior serially mediate the positive relationship between financial knowledge and FWB. Financial skill and behavior also mediate the indirect relationship between financial awareness and FWB. This study may help address personal finance issues related to millennials’ FWB, giving the government and policymakers crucial information to use when developing initiatives for that generation. To achieve this, the study focuses on multiple dimensions of financial literacy, which remain underexplored in most previous studies. Furthermore, the study’s serial mediation analysis is guided by the complete framework of the Family Resource Management System Theory (FRMST), which has not been fully utilized in previous FWB studies.