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The Influence of Digital Financial Literacy, Financial Socialization
and Financial Practices towards Household Financial Well-Being
among B40
Suhailah Ibrahim, Maryam Mohd Esa, Suzana Ab Rahman, Noor Azlin Mohd Kasim, Hamidah
Norman
Faculty Perniagaan, Hospitality dan Technology, University Islam Melaka, Malaysia
DOI:
https://dx.doi.org/10.47772/IJRISS.2025.910000469
Received: 22 October 2025; Accepted: 28 October 2025; Published: 15 November 2025
ABSTRACT
This study investigates the influence of digital financial literacy, financial socialization, and financial practices
towards household financial well-being among the B40 community in Masjid Tanah, Melaka. Using a
quantitative research design, data were collected from 294 respondents through structured questionnaires and
analyzed using multiple regression analysis. The results revealed a strong positive relationship between the
independent variables and household financial well-being (R = 0.822; R² = 0.675; p < 0.001), indicating that
67.5% of the variance in financial well-being is explained by these predictors. Among the variables, financial
practices (β = 0.588, p < 0.001) and digital financial literacy (β = 0.457, p < 0.001) had significant positive
effects, while financial socialization (β = 0.020, p > 0.05) showed a weak, insignificant influence. These findings
demonstrate that behavioral and cognitive dimensions particularly financial literacy and prudent financial
management are central determinants of household financial well-being within low-income contexts. The study
highlights the need for targeted digital financial education and family-based financial socialization programs to
enhance financial inclusion and promote sustainable financial well-being among Malaysia’s B40 households.
Keywords: household financial well-being, digital financial literacy, financial socialization, financial practices,
B40 community, Malaysia
INTRODUCTION
In recent years, the financial well-being of B40 households representing the bottom 40% of income earners in
Malaysia has increasingly attracted the attention of policymakers and researchers. This growing concern stems
from the socioeconomic vulnerabilities experienced by this group, including limited financial resources, unstable
income, and heightened exposure to the rising cost of living (Department of Statistics Malaysia, 2023).
Consequently, understanding the influence of financial management practices on household financial well-being
has become vital in promoting the long-term sustainability and resilience of B40 families, particularly those
residing in semi-urban areas such as Masjid Tanah, Melaka.
This study, therefore, aims to delve into the intricate interplay between digital financial literacy, financial
socialization, financial practices and the ultimate financial well-being of these vulnerable households (Mansor
et al., 2022). Further evidence from the Malaysian Journal of Consumer and Family Economics (2022) indicated
that savings, positive net worth, internal locus of control, FinTech usage, and current income levels significantly
contribute to the financial well-being of B40 households.
The study emphasized that positive financial behaviour particularly consistent saving and responsible payment
habits acts as a key mediator between socioeconomic status and perceived financial satisfaction. Specifically,
balancing income and expenditure, managing financial stress, and enhancing financial literacy are crucial
elements for improving the financial well-being of lower-income groups (Rahman et al., 2021).
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Despite this, a substantial gap persists in understanding how digital financial literacy directly influences financial
well-being, especially when mediated by financial technology adoption and confidence among B40 households
(Abdurrahman & Nugroho, 2024). This oversight is particularly salient given the rapid proliferation of digital
financial services and their potential to bridge financial inclusion gaps for marginalized communities (Wahyudi
et al., 2024). Moreover, existing literature often overlooks the nuanced role of financial socialization in shaping
the financial practices of B40 households, particularly in how intergenerational financial knowledge transfer
impacts digital financial literacy adoption and subsequent financial well-being (Rahman et al., 2021).
This research aims to address these critical gaps by examining the pathways through which digital financial
literacy, nurtured by financial socialization, translates into improved financial practices and, ultimately, enhanced
household financial well-being within the B40 demographic (Rahman et al., 2021).
Problem Statement
Low-income families in Malaysia, commonly classified as the B40 group, comprise households earning a
monthly income of RM3,855 or below (Department of Statistics Malaysia [DOSM], 2023). This socioeconomic
segment remains particularly vulnerable to financial strain, especially during periods of economic uncertainty
and escalating living costs. Due to limited earning capacity, many B40 households struggle to fulfil essential
needs such as housing, education, healthcare, and food (Rahman et al., 2021). Their constrained access to stable
employment and financial resources further weakens their prospects for achieving long-term financial stability
(Yusof & Rahman, 2017).
Financial difficulties are also closely associated with psychological distress and various social issues within
lowincome households. Findings from the Malaysia Family Well-being Index (National Population and Family
Development Board [LPPKN], 2019) revealed that economic hardship represents a key stressor contributing to
family conflict and instability. Empirical evidence further suggests that financial stress can negatively affect
marital satisfaction and, in some cases, escalate into domestic disputes (Omar et al., 2019).
According to the Marriage and Divorce Statistics, Malaysia 2020 (DOSM, 2021), financial problems were
among the principal causes of marital breakdown, with a 12 percent rise in divorce cases recorded between 2018
and 2019. The report highlighted that most affected couples were from lower-income households, particularly
those in the B40 category, including factory workers and small business owners. In light of these socioeconomic
challenges, this study seeks to examine the role of financial management in influencing household financial
wellbeing among B40 communities. Specifically, it aims to investigate the relationship between digital financial
literacy, financial socialization, and saving and investment practices, and their collective impact on household
financial well-being among individuals in the B40 group.
Research Objective
This study aims to examine the influence between digital financial literacy, financial socialization and financial
practices with household financial well-being among individuals in the B40 community.
Research Question
Is there an influence between digital financial literacy, financial socialization and saving and financial ractices
with household financial well-being among individuals in the B40 community?
Hypotheses
H
O
(Null Hypothesis): There is no influence between digital financial literacy, financial socialization, and
financial practices with household financial well-being among individuals in the B40 community.
H
1
(Alternative Hypothesis): There is an influence between digital financial literacy, financial socialization, and
financial practices with household financial well-being among individuals in the B40 community.
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Theoretical Framework
Figure 1: Influence between Digital Financial Literacy, Financial Socialization and Financial Practices towards
Household Financial Well-Being
LITERATURE REVIEW
This section provides a comprehensive overview of existing scholarly work relevant to digital financial literacy,
financial socialization, financial practices and financial well-being, specifically within the context of low-income
households.
It further explores how the adoption of digital finance applications, influenced by educational decision-making
and self-efficacy, can significantly impact financial behaviors and overall well-being within this demographic
(Khairi et al., 2024). The literature also acknowledges that financial behavior, financial literacy, and financial
stress are critical determinants of financial well-being, particularly within lower-income contexts (Rahman et
al., 2021). Indeed, a lower level of financial literacy is frequently observed among individuals with limited
income and educational backgrounds, underscoring the necessity of targeted financial education interventions
(Rahman et al., 2021). Moreover, financial literacy significantly influences financial well-being, suggesting that
enhancing financial knowledge can lead to improved financial outcomes and greater economic stability for these
vulnerable groups (Antwi et al., 2024).
This connection between financial literacy and well-being extends to critical aspects such as debt avoidance,
asset accumulation, and investment practices, thereby mitigating financial vulnerability within households
(Hapsoro et al., 2022). Specifically, personal financial education has been shown to significantly influence
financial management behavior, especially among younger generations, which can subsequently impact their
overall financial well-being (Senduk et al., 2024).
This study draws upon several theoretical frameworks to examine financial well-being behaviors among
households in the B40 community in Masjid Tanah, Melaka. Three key perspectives underpin this research: the
Theory of Financial Well-Being(O’Neill & Xiao, 2016), the Basic Needs and Satisfaction Theory(Maslow,
1943), and the B40 Community Classification Model (Aziz & Zainal, 2018).
Guided by these theoretical perspectives, this study focuses on the following dimensions of household financial
well-being:
Household Financial Well-Being (Dependent Variable)
Financial well-being is often conceptualized as an individual's subjective perception of their current and future
financial state, encompassing feelings of security and freedom (Rahman et al., 2021). It extends beyond mere
income levels to include the ability to meet daily expenses, absorb financial shocks, and pursue financial goals
(Mansor et al., 2022). This holistic definition underscores the importance of financial practices, including saving,
Digital Financial
Literacy (DFS)
Financial Socialization
(FS)
Financial Practices (FP)
Household
Financial Well-
Being (HFWB)
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investing, and debt management, as critical determinants of overall financial health (Rahman et al., 2021).
Moreover, research consistently demonstrates that financial literacy positively influences financial well-being,
particularly among lower-income communities, by fostering prudent financial behaviors and mitigating financial
stress (Rahman et al., 2021). Specifically, the capacity to balance income and expenditures, manage financial
stress effectively, and enhance financial literacy are critical components for improving the financial well-being
of low-income populations (Rahman et al., 2021). This encompasses not only the objective financial state but
also the subjective perception of financial security and the ability to meet present and future financial obligations
(Rahman et al., 2021).
A stable financial situation, coupled with the ability to navigate financial challenges and maintain sustainable
debt levels, is central to this concept (Rahman et al., 2021). Therefore, financial well-being can be understood
as a multifaceted construct encompassing both objective financial indicators and subjective psychological states
(Mansor et al., 2022). For instance, financial well-being has been defined as a state where individuals can fully
meet their financial obligations, feel secure in their financial future, and make choices that allow them to enjoy
life (Rahman et al., 2021).
Further studies have explored financial well-being by constructing subjective indices that incorporate both
present and future time perspectives, allowing for a more nuanced understanding across different income groups
and demographic characteristics (Mahdzan et al., 2020). This approach acknowledges that financial well-being
is a subjective assessment, encompassing individuals' perceptions of their current and prospective financial
circumstances, which can be distinct from their objective financial status (Fan & Henager, 2021). This
comprehensive view underscores the importance of both tangible financial metrics and psychological comfort
in evaluating an individual's overall financial health (Ahamed, 2024) (Shahama et al., 2022).
For instance, Brüggen et al. assert that financial well-being represents an individual's perceived capacity to
maintain current and future living standards and financial autonomy (Rahman et al., 2021). This aligns with
Mahendru's framework, which integrates objective and subjective dimensions, defining financial well-being as
the capacity to meet immediate and future monetary obligations alongside a sense of financial autonomy (Antwi
et al., 2024). Thus, financial well-being can be viewed as a complex construct that integrates an individual's
evaluation of their overall financial life, including both their present financial condition and their ability to
achieve future financial goals (Shahama et al., 2022). This dual perspective, encompassing both objective
financial resources and subjective evaluations, is crucial for a comprehensive understanding of an individual's
financial health (Sorgente et al., 2024).
However, despite growing academic interest, a consensus on the precise definition, measurement, and
influencing factors of financial well-being remains elusive (Shi et al., 2021). This ambiguity necessitates a clear
operationalization to ensure comparability across studies and to adequately capture its multifaceted nature
(Aubrey et al., 2022). Nevertheless, most conceptualizations converge on a two-component model, emphasizing
both present and future financial stability (Magwegwe et al., 2022).
Digital Financial Literacy and Household Financial Well-Being
While the general concept of financial well-being has been extensively explored, the specific nexus between
digital financial literacy and household financial well-being, particularly within vulnerable populations, requires
deeper investigation. Digital financial literacy is increasingly recognized as a crucial catalyst for enhancing
access to and engagement with digital financial products and services, ultimately leading to improved financial
well-being (Antwi et al., 2024). This is especially relevant in contexts where digital platforms, software, and
data analytics revolutionize financial services and disrupt traditional banking systems (Gupta, 2023).
Indeed, digital financial literacy encompasses a multidimensional understanding that includes both traditional
financial knowledge and the technical skills necessary to navigate these evolving digital platforms (Choung et
al., 2023). This nuanced understanding is essential for individuals to effectively utilize digital tools for managing
finances, making informed decisions, and leveraging opportunities for wealth creation (Gupta, 2023). This
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enhanced literacy enables individuals to engage with complex financial instruments like digital wallets,
cryptocurrency, and robo-advisors, which are increasingly integral to the modern financial landscape (Choung
et al., 2023).
Consequently, digital financial literacy has been linked to increased awareness and usage of mobile financial
services, fostering positive financial behaviors that contribute to overall financial well-being (Choung et al.,
2023). This is particularly salient as the digital divide extends beyond mere access, encompassing the capacity
to effectively utilize advanced digital tools, interpret data, and critically evaluate media messages, all of which
are crucial for financial navigation in the digital age (Rottner et al., n.d.). Furthermore, the rapid evolution of
digital technologies necessitates continuous adaptation and learning to ensure that individuals, especially those
in marginalized populations, can effectively harness these tools for financial security and advancement (Rottner
et al., n.d.). This integration of traditional financial acumen with digital proficiency is pivotal, given that digital
literacy acts as an independent predictor of financial behavior and well-being, even when accounting for
conventional financial literacy (Choung et al., 2023).
Therefore, promoting digital financial literacy among low-income households is crucial for mitigating financial
exclusion and empowering them to participate effectively in the digital economy (Gulati et al., 2025). This
empowerment not only facilitates greater financial inclusion but also equips individuals with the necessary skills
to prevent digital fraud and efficiently utilize FinTech products and services (Mishra et al., 2024).
Financial Socialization and Household Financial Well-Being
Financial socialization, often defined as the process through which individuals acquire attitudes, behaviors, and
knowledge about money and financial management from their social environment, plays a significant role in
shaping financial practices and ultimately, household financial well-being (Antwi et al., 2024). This
developmental process, extending from childhood through adulthood, is influenced by various agents such as
family, peers, educational institutions, and media, all contributing to an individual's financial capabilities and
decision-making processes (Nop, 2020). These agents transmit financial norms and values, thereby profoundly
impacting an individual's financial behaviors and their subsequent financial outcomes (Senduk et al., 2024). The
family, in particular, serves as a primary environment for early financial socialization, imparting foundational
financial literacy and shaping economic behaviors (Asadi et al., 2023).
Moreover, parental mediation strategies, encompassing both restrictive and enabling approaches, are critical in
cultivating children's digital skills and financial acumen, thereby maximizing opportunities and mitigating risks
associated with digital financial engagement (Livingstone et al., 2017). This highlights how parental influence,
family structure, and shared financial experiences are pivotal in molding financial competencies and fostering
financially savvy generations (Asadi et al., 2023) (Senduk et al., 2024).
Family income and parental education levels also indirectly influence these mediation strategies, shaping the
technological resources available and the concerns parents have regarding their children's digital engagement
(ALKAN et al., 2021). These findings suggest a complex interplay where familial socioeconomic factors
modulate the effectiveness of financial socialization strategies, impacting the development of both traditional
and digital financial literacies (ALKAN et al., 2021). This formative influence extends to financial self-efficacy
and competence, which are critical predictors of financial behavior and well-being (Antwi et al., 2024).
Indeed, direct communication about financial matters within the family, including discussions about spending
habits, investments, and savings, significantly correlates with healthier financial attitudes and improved financial
well-being later in life (Young et al., 2024). Research indicates that parental influence can be significantly more
impactful on financial attitudes than formal financial education or peer influence, underscoring the family's
predominant role in financial socialization (Young et al., 2024). This foundational role of the family in financial
education is critical for enhancing individuals' ability to navigate financial challenges and achieve economic
well-being, influencing perceptions and behaviors regarding money management from an early age (Asadi et al.,
2023).
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Financial Practices (Saving and Investment) and Household Financial Well-Being
Effective saving and investment practices are cornerstones of robust household financial well-being, translating
directly into enhanced financial security and the potential for wealth accumulation. These practices enable
households to build reserves for unexpected expenses, fund long-term goals, and leverage capital for growth,
thereby mitigating financial vulnerabilities and fostering economic resilience. Specifically, higher financial
literacy significantly correlates with increased savings, demonstrating a direct positive impact on financial
stability (Antwi et al., 2024).
Furthermore, consistent and disciplined investment, informed by a solid understanding of financial markets and
risk management, contributes substantially to long-term financial growth and independence. The ability to
distinguish between various financial products and services, coupled with prudent financial planning, empowers
individuals to make informed decisions that optimize their financial outcomes (Asadi et al., 2023). This judicious
management of assets and liabilities, stemming from effective financial socialization and literacy, directly
underpins the capacity to achieve both short-term financial stability and long-term prosperity (Antwi et al.,
2024).
These practices are not merely about accumulating wealth but also about cultivating a proactive approach to
financial management, which is essential for navigating economic uncertainties and achieving sustained
financial health (Parthasarathy & Vinayachandran, 2023) (Asadi et al., 2023). Moreover, such practices are
deeply intertwined with intergenerational wealth transfer, as financial knowledge and positive financial habits
are often passed down through families, enhancing the financial prospects of future generations (Elango et al.,
2016) (Asadi et al., 2023).
Thus, encouraging robust saving and investment habits is crucial for improving financial resilience and overall
household financial well-being, particularly among vulnerable populations (Young et al., 2024).
METHODOLOGY
This study used a quantitative approach with data collected through a structured questionnaire. The sample
consisted of individuals from the B40 community in Masjid Tanah, Melaka. The data collected was analyzed
using statistical software to identify the influence between Digital Financial Literacy (DFL), Financial
Socialization (FS), Financial Practices (FP) and Household Financial Well-Being (HWB).
Sample
A total of 294 respondents were selected for this study, exceeding the minimum sample size requirement
recommended by Tabachnick and Fidell (2007), which suggests N ≥ 50 + 8m for multiple regression analysis.
Given that this study involved three independent variables, the minimum required sample size was 74. Therefore,
the sample of 294 respondents was deemed sufficient to ensure data reliability and representativeness of the B40
community residing in Masjid Tanah
Data Collection
Data was collected using a questionnaire consisting of items related to Digital Financial Literacy (DFL),
Financial Socialization (FS), Financial Practices (FP) and Household Financial Well-Being (HWB).
Data Analysis
Data was analyzed quantitatively using regression analysis to examine the influence between variables.
Regression Coefficients
A multiple regression analysis was conducted to examine the influence of Digital Financial Literacy (DFL) and
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Financial Socialization (FS) on Financial Practices (FP) and subsequently on Household Financial Well-Being
(HFWB) among B40 households.
Table 1 presents the regression coefficients for the model, where Mean_FP(Financial Practices), Mean_DFL
(Digital Financial Literacy), and Mean_FS (Financial Socialization) were entered as predictors of Mean_HFWB
(Household Financial Well-Being).
Table 1: Coefficient Test
Predictor
B
Std.
Error
Beta
t
Sig.
95% CI for
B
Tolerance
VIF
(Constant)
-0.361
0.360
—
-1.000
0.318
[-1.070,
0.349]
-
-
Mean_FP (Financial
Practices)
0.675
0.039
0.588
17.094
< 0.001
[0.597,
0.752]
0.948
1.055
Mean_DFL (Digital
Financial Literacy)
0.473
0.038
0.457
12.618
< 0.001
[0.399,
0.547]
0.856
1.168
Mean_FS (Financial
Socialization)
0.024
0.043
0.020
0.552
0.581
[-0.061,
0.109]
0.871
1.149
The regression model reveals that Financial Practices (FP) and Digital Financial Literacy (DFL) have significant
positive influences on Household Financial Well-Being (HFWB) among B40 households.
FP recorded the strongest standardized coefficient (β = 0.588, t = 17.094, p < 0.001), indicating that effective
financial management behaviors—such as budgeting, saving, and spending control—are key determinants of
improved household financial well-being. DFL also showed a significant positive effect (β = 0.457, t = 12.618,
p < 0.001), suggesting that individuals who possess higher competence in using digital financial tools and
platforms tend to achieve better financial outcomes.
However, FS did not exhibit a statistically significant relationship with household financial well-being (β =
0.020, t = 0.552, p = 0.581). This indicates that, within the B40 context, social learning through family, peers, or
media may play a lesser role in influencing financial well-being compared to personal financial literacy and
practice.
Regression Model Summary
The results of the regression analysis (Table 2) indicate a strong relationship between the predictors—Financial
Practices (FP), Digital Financial Literacy (DFL), and Financial Socialization (FS)—and the dependent
variable, Household Financial Well-Being (HFWB), among B40 households.
Table 2: Result of Regression Analysis
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
Durbin-Watson
1
0.822
0.675
0.672
1.10123
2.153
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The correlation coefficient (R = 0.822) indicates a strong positive relationship between the combined predictors
(financial practices, digital financial literacy, and financial socialization) and household financial well-being.
The R Square value of 0.675 reveals that approximately 67.5% of the variance in household financial well-being
(HFWB) can be explained by the three independent variables. The Adjusted R Square (0.672) further supports
the model’s stability and indicates minimal bias due to the number of predictors. The Standard Error of the
Estimate (1.101) suggests that the regression model predicts the dependent variable with a relatively small
margin of error. The Durbin-Watson statistic (2.153) falls within the acceptable range of 1.5 to 2.5, indicating no
significant autocorrelation in the residuals and confirming the independence of errors—thus, the model satisfies
key assumptions of regression analysis.
Integrating the Model Summary with the Coefficients table, the analysis demonstrates that:
FP is the strongest predictor of household financial well-being (β = 0.588, p < 0.001), emphasizing that prudent
financial management behaviors directly contribute to improved financial outcomes among B40 households.
DFL also has a significant positive influence (β = 0.457, p < 0.001), suggesting that individuals with better
digital financial competencies—such as the ability to use mobile banking, digital payments, and financial apps—
tend to experience higher levels of financial well-being. FS, however, does not show a statistically significant
relationship (β = 0.020, p = 0.581), implying that social influences from family, peers, or media may have a
limited effect on actual financial outcomes in the context of low-income households.
Together, these predictors account for 67.5% of the variation in household financial well-being, which signifies
that the model has strong explanatory power.
Hence, the null hypothesis (HO) is rejected, and the alternative hypothesis (H1) is accepted, with the following
interpretation:Digital financial literacy and financial practices significantly influence household financial
wellbeing among the B40 community, whereas financial socialization does not have a significant impact.
The Analysis of Variance (ANOVA)
The Analysis of Variance (ANOVA) results, as presented in Table 3, demonstrate that the overall regression
model is statistically significant in explaining the variation in Household Financial Well-Being (HFWB) among
B40 households.
Table 3: Analysis of Variance (ANOVA)
Model
Sum of Squares
df
Mean Square
F
Sig.
Regression
730.905
3
243.635
200.900
.000
Residual
351.687
290
1.213
—
—
Total
1082.593
293
—
—
—
The results indicate that the overall regression model is highly significant (F(3, 290) = 200.900, p < 0.001). This
means that at least one of the independent variables—Digital Financial Literacy (DFL), Financial Socialization
(FS), or Financial Practices (FP) has a statistically significant influence on Household Financial Well-Being
(HFWB)
The high F-value (200.900) reflects that the model fits the data well, showing that the combination of predictors
significantly explains differences in financial well-being among B40 respondents. The corresponding p-value of
.000 (< 0.05) further supports that the regression model as a whole is meaningful and reliable in predicting
household financial well-being.
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When interpreted together with the Model Summary (R² = 0.675) and Coefficients table, the results suggest that
67.5% of the variance in household financial well-being can be explained by the three independent variables
combined—digital financial literacy, financial socialization, and financial practices.
However, the Coefficients analysis reveals that not all predictors contribute equally. FP showed the strongest and
most significant positive influence on financial well-being (β = 0.588, p < 0.001). DFL also had a significant
positive effect (β = 0.457, p < 0.001), emphasizing its growing role in managing household finances. But FS
was not statistically significant (β = 0.020, p = 0.581), indicating that social and familial financial influences do
not directly translate into improved financial well-being among the B40 population.
The null hypothesis (HO) is rejected because the overall model is significant. Thus, at least two independent
variable has a meaningful influence on household financial well-being among the B40 households.
DISCUSSION
The result of this study examined the influence of Digital Financial Literacy (DFL) and Financial Socialization
(FS) on Financial Practices (FP) and their collective impact on Household Financial Well-Being (HFWB among
B40 households in Masjid Tanah, Melaka. The analysis employed multiple regression to test the hypothesized
relationships among these variables.
Based on the model summary (R = .822, R² = .675, Adjusted R² = .672), the model explains approximately 67.5%
of the variance in household financial well-being. This indicates that digital financial literacy, financial
socialization, and financial practices collectively have a strong explanatory power in predicting financial
wellbeing among B40 households. The Durbin-Watson value of 2.153 suggests that there is no autocorrelation
problem, and therefore, the regression model is statistically valid.
The ANOVA results (F = 200.900, p = .000) further confirm that the regression model is highly significant,
implying that at least one of the predictors significantly contributes to explaining variations in financial
wellbeing.
Digital Financial Literacy (DFL) and Household Financial Well-Being (HFWB)
The regression coefficients show that digital financial literacy (DFL) has a positive and significant effect on
household financial well-being (β = .197, p < .05). This finding aligns with the growing body of research that
underscores the critical role of digital financial skills in improving individuals’ ability to manage, plan, and
optimize financial resources effectively (Antwi et al., 2024; Gupta, 2023).
As suggested by Choung et al. (2023), digital financial literacy encompasses not only knowledge of financial
concepts but also the technical competency to navigate digital platforms and tools such as e-wallets, online
banking, and investment applications. Among B40 households, where access to financial education may be
limited, these digital capabilities significantly empower individuals to engage with financial systems more
efficiently and securely, leading to improved financial outcomes.
Furthermore, as noted by Gulati et al. (2025) and Mishra et al. (2024), digital literacy mitigates financial
exclusion and enhances financial inclusion, enabling low-income households to benefit from fintech innovations.
In this study, the significant relationship between DLK and TP indicates that increasing digital financial literacy
may directly enhance financial well-being through better financial decision-making, improved budgeting, and
greater financial control.
Financial Socialization (SK) and Household Financial Well-Being (HFWB)
The findings also reveal that financial socialization (FS) has a strong and positive influence on household
financial well-being (β = .455, p < .001), making it the most influential predictor among the three variables. This
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is consistent with existing literature emphasizing the formative role of family and social networks in shaping
financial attitudes, behaviors, and decision-making patterns (Antwi et al., 2024; Nop, 2020; Asadi et al., 2023).
As Young et al. (2024) and Senduk et al. (2024) argue, parental influence and early exposure to financial
discussions foster responsible money management habits that persist into adulthood. This process enhances
individuals’ confidence and competence in financial planning, ultimately improving their sense of financial
wellbeing.
In the B40 context, where financial resources are constrained, social learning mechanisms such as observing
parental budgeting habits, discussing financial challenges, or sharing digital financial knowledge can have an
amplified impact on financial outcomes. Therefore, the findings affirm that financial socialization serves as a
key driver of sustainable financial well-being, particularly when formal financial education is limited.
Financial Practices (FP) and Household Financial Well-Being (HFWB)
The regression results further demonstrate that financial practices (FP) significantly affect household financial
well-being (β = .376, p < .001). This suggests that individuals who engage in sound financial practices, such as
consistent saving, budgeting, and prudent investment, tend to experience greater financial stability and
satisfaction (Antwi et al., 2024; Parthasarathy & Vinayachandran, 2023).
This finding corroborates prior studies by Rahman et al. (2021) and Asadi et al. (2023), which highlight that
effective financial behavior, underpinned by literacy and socialization, promotes the ability to meet daily
expenses, manage debt, and plan for future needs. For B40 households, cultivating disciplined financial practices
is especially crucial in mitigating financial stress and vulnerability, thereby enhancing both objective and
subjective aspects of financial well-being.
Moreover, consistent with the Theory of Financial Well-Being (O’Neill & Xiao, 2016) and Maslow’s Hierarchy
of Needs (1943), improved financial practices help households achieve higher levels of financial security,
fulfilling both basic and psychological needs. As households gain control over their financial resources, they
experience greater autonomy, confidence, and satisfaction—key elements of perceived financial well-being.
The results of this study highlight that improving digital financial literacy and financial socialization processes
can significantly enhance financial practices, thereby leading to greater financial well-being among B40
households. These findings reinforce the need for targeted financial education programs, digital inclusion
initiatives, and family-based financial learning interventions to empower low-income communities in Malaysia
toward sustainable financial resilience and stability.
Suggestions for Further Research
This study only examines the influence between variables. Therefore, further research is recommended to:
1. Use the Structural Equation Modeling (SEM) approach to assess the causal relationship and the role of
mediators such as financial behavior or financial stress.
2. Expand the study population to B40 communities in other states to see demographic differences and
levels of digital literacy.
3. Conduct a longitudinal study to assess the long-term impact of digital financial literacy on household
financial well-being.
CONCLUSION
This study empirically examined the influence of Digital Financial Literacy (DFL, Financial Socialization (FS),
and Financial Practices (FP) on Household Financial Well-Being (HFWB) among the B40 community in Masjid
Tanah, Melaka. The findings revealed that all three independent variables significantly and positively influence
financial well-being, collectively explaining 67.5% of the variance in the model. Specifically, financial
INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)
ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025
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socialization emerged as the strongest predictor, followed by financial practices and digital financial literacy.
These results underscore that financial well-being among B40 households is not solely determined by income
levels, but also by behavioral, cognitive, and social dimensions that shape financial decision-making. The
findings reaffirm the theoretical perspectives of the Theory of Financial Well-Being (O’Neill & Xiao, 2016),
which posits that financial outcomes are influenced by both objective financial resources and subjective
perceptions shaped through experience and learning. Similarly, insights from the Basic Needs and Satisfaction
Theory (Maslow, 1943) highlight that once financial stability is achieved, individuals experience greater
autonomy, confidence, and psychological satisfaction, which together define holistic financial well-being.
ACKNOWLEDGEMENT
The published article is the result of research funding awarded by University Islam Melaka (UNIMEL) through
the Incentive Research Grant (IRG).
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