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This study explores the determinants of financial well-being (FW) among emerging adults and investigates the moderating role of financial risk tolerance in the relationship between financial capability and financial behavior.

In total, 257 useable data were collected from federal and private university students, representing Emirati emerging adults aged 18 to 29. The analysis employed a structural equation model through AMOS 17.0.

Structural modeling results show that gender, monthly expenses, financial literacy and financial socialization influence financial capability and financial capability impacts both financial behavior and FW. Financial risk tolerance moderates the relationship between financial capability and financial behavior.

This study offers insights useful for policymakers, industry players and educators seeking to address financial literacy, financial capability and financial behavior to enhance the FW of emerging adults.

The study sheds light on the intricate yet comprehensive FW model of emerging adults in a non-Western context. The study also offers a new, more complex view of the function of financial literacy and financial socialization in financial capability. Combining family financial socialization and risk-return theories in an organic viewpoint allows for a more in-depth examination of a critical distinction between the role of literacy and socialization in shaping attitude and behavior and its function as a platform for financial discourse, which can inform how educational efforts and social platforms can be leveraged to improve financial acumen and FW.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-08-2023-0668