The Digital Financial Inclusion Paradox in Personal Financial Management among Gen Z and Millennials in Yogyakarta and Semarang

Ratri Paramitalaksmi; Tutut Dewi Astuti; Azfa Mutiara Pabulo; Roselina Ahmad Saufi

doi:10.61194/ijtc.v7i3.2640

Authors

Ratri Paramitalaksmi Universitas Mercu Buana Yogyakarta
Tutut Dewi Astuti Universitas Mercu Buana Yogyakarta
Azfa Mutiara Pabulo Universitas Mercu Buana Yogyakarta
Roselina Ahmad Saufi University Wales

DOI:

https://doi.org/10.61194/ijtc.v7i3.2640

Keywords:

fintech financial inclusion, financial literacy, personal financial management, young generation

Abstract

Financial technology has widened young people’s access to digital financial services, yet broader access does not automatically lead to better personal financial management. This study examines a sample-specific indication of the digital financial inclusion paradox by testing financial literacy, fintech-based financial inclusion, and lifestyle as determinants of personal financial management among Gen Z and Millennial fintech users in Yogyakarta and Semarang. Using a quantitative cross-sectional design, data were collected from 200 respondents selected through purposive sampling and analyzed using SEM-PLS with SmartPLS 3. The results show that financial literacy had no significant effect on personal financial management (β = 0.003; t = 0.030; p = 0.976). Fintech-based financial inclusion had a significant negative effect (β = -0.186; t = 2.677; p = 0.007), whereas lifestyle had a significant positive effect (β = 0.173; t = 2.105; p = 0.035). The model explained only 7.1% of the variance in personal financial management, indicating limited explanatory power. Supplementary Multi-Group Analysis showed no significant path differences between Gen Z and Millennials; however, this result should be interpreted cautiously because measurement invariance was not fully established. Overall, the findings provide preliminary and sample-specific evidence that fintech access may not strengthen personal financial management when it is not supported by behavioral control, digital financial literacy, and awareness of digital credit risks.

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