Determinants Of Financial Stress In Indonesia: The Moderating Role Of Digital Knowledge

Abstract

This study aims to examine the effects of Current Money Management Stress (CMMS), Expected Future Financial Security (EFFS), and Digital Knowledge (DK) on Financial Stress (FS) and Financial Behavior (FB), as well as to test the mediating role of FS and the moderating role of DK within the proposed research model. This research adopts a quantitative approach using survey data collected from respondents in Indonesia and analyzes the data using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that CMMS is the most dominant factor in increasing FS, suggesting that short-term financial management pressure significantly raises individuals’ levels of financial stress. EFFS has a negative effect on FS, although its influence is relatively weaker compared to short-term financial pressure. DK does not have a significant effect on FS. In the context of Financial Behavior, CMMS negatively affects FB, while EFFS and DK has positive and significant effects. Interestingly, FS has a positive and significant effect on FB, indicating that under certain conditions, financial stress may encourage individuals to demonstrate more active or controlled financial behavior. Furthermore, FS partially mediates the relationship between CMMS and FB, but does not mediate the relationship between EFFS and FB. The moderating role of DK in the relationship between FS and FB is not supported. Overall, the results highlight the dominant role of short-term financial pressure in shaping Financial Stress and Financial Behavior, while cognitive factors and future-oriented perceptions function as supporting elements in financial decision-making.