Why Generation Z Borrow? The Roles of Fomo, Financial Overconfidence, and BNPL

Gilang Kharisma Putra; Arum Pujiastuti

doi:10.61132/lokawati.v4i3.2676

Authors

Gilang Kharisma Putra Universitas Selamat Sri
Arum Pujiastuti Universitas Negeri Surabaya

DOI:

https://doi.org/10.61132/lokawati.v4i3.2676

Keywords:

Behavioral Finance, Buy Later, Fear Missing, Financial Overconfidence, Generasi Z

Abstract

This study aims to analyze the effects of financial overconfidence, Fear of Missing Out (FoMO), and Buy Now Pay Later (BNPL) on indebtedness among Generation Z in Central Java. Utilizing a quantitative approach, primary data were gathered through the distribution of questionnaires to 144 Generation Z respondents selected via a purposive sampling technique. Data analysis was conducted using multiple linear regression analysis via EViews 12. The empirical results demonstrate that financial overconfidence, FoMO, and BNPL exert positive and significant effects on indebtedness, both partially and simultaneously. Furthermore, financial overconfidence emerged as the most dominant variable influencing indebtedness. An Adjusted R-Square value of 70.81% indicates that these three variables account for the vast majority of the variance in Generation Z's indebtedness. These findings indicate that the debt behavior of the younger generation is driven not only by economic factors but also by a confluence of psychological, social, and digital financial technology advancements. This research contributes to the literature on behavioral finance and the financial behavior of the younger generation in the digital era.

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