Exploring the role of digital financial literacy and personal financial behavior in shaping financial stress and well-being in the digital age

As societies navigate digital transformation, understanding the psychological and behavioral links between Digital Financial Literacy (DFL), Personal Financial Management Behavior (PFMB), and Financial Well-Being (FWB) is essential for advancing Sustainable Development Goals (SDGs 1, 8, and 10). This study analyzes how DFL helps individuals in the NCT of India manage digital financial services and its psychological effects on FWB and PFMB across diverse demographic groups. Using Partial Least Squares Structural Equation Modeling (PLS-SEM) on data from 499 participants, the study confirmed the model's accuracy. The results show how PFMB links financial knowledge with financial stress and sustainability, especially in managing short-term habits. Future financial security has a greater psychological impact on FWB than present-day money stress. The model explains 50.9 % of FWB variation and 40.9 % of PFMB variation. DFL influenced PFMB and FWB differently for males versus females and salaried versus self-employed individuals. The study recommends that policymakers invest in digital financial education, risk management training, and the mindful use of digital financial tools to enhance psychological and financial resilience. • Short-term financial habits contribute more to financial behaviour, while confidence in future financial security plays a greater role in financial well-being. • Digital financial risk control and knowledge emerge as the most influential components of digital financial literacy. • Attitudes toward digital finance negatively relate to digital literacy, indicating psychological resistance and the need for attitudinal interventions. • Gender, occupation type, and education level moderate the effects of digital financial literacy on financial outcomes, suggesting the need for targeted strategies. • The study supports integrating digital financial literacy into educational and workplace wellness programs.