Chasing Financial Goals: How Social Media Engagement, Fear of Missing Out, and Digital Financial Literacy Shape Investment Behaviour of Gen Z?

Abstract

In today’s digital world, Gen Zs increasingly rely on social media for financial advice and investment trends. While digital platforms offer opportunities for financial learning, they also trigger emotional reactions such as Fear of Missing Out (FoMO), that may impact their financial and investment behaviour. This study explores how Social Media Engagement (SME) impacts Investment Behaviour (IB) among Gen Zs, mediated by FoMO and moderated by Digital Financial Literacy (DFL). By using purposive sampling, this study gathered data from 291 Gen Z individuals from Chennai city who actively follow financial contents on social media and also invest. The results unfolded that SME significantly predicts FoMO and both these variables positively and significantly impact the investment behaviour. A strong partial mediation effect of FoMO was discovered between social media engagement and investment behaviour. Critically, digital financial literacy moderates the FoMO-IB pathway negatively. Further, the conditional effects show that higher DFL weakened FoMO’s impact on IB. The study contributes novel understanding into the role of DFL, as it reduces vulnerability to FoMO-led risks. This research uniquely captures the emotional–cognitive dynamics of investment behaviour among Gen Z, a critical but underexplored area, offering actionable strategies for policymakers and educators to foster informed financial actions in the digital age.