Consumption is the core force driving China’s economic development, and emotional consumption, mainly carried by online consumption, has become an important potential point for contemporary youth consumption and a new driving force to boost domestic consumption. Using data from the China Family Panel Studies (CFPS) database from 2014 to 2022, this paper explores the mechanism of digital literacy on online consumption among young people from an emotional perspective. The study finds that for young people who are often in a negative emotional state, driven by emotional consumption, the improvement of digital literacy will significantly promote online consumption and increase online consumption expenditure. On this basis, liquidity constraints, social networks, and knowledge boundaries all play a significant moderating role in the impact of digital literacy on young people’s online consumption. The lower the borrowing constraints, the higher the work income, the more developed the social networks, and the broader the knowledge boundaries, the greater the positive impact of improved digital literacy on young people’s online consumption. The impact of digital literacy on young people’s online consumption increases with age and decreased education, and this impact is more pronounced among employed youth and youth in areas with developed digital credit. Further research finds that the social skill dimension of digital literacy has a greater impact on young people’s online consumption than the basic skill and information ability dimensions. The findings of this paper offer significant insights for vigorously boosting consumption and steadfastly implementing the strategy of expanding domestic demand, and also provide a valuable reference for promoting the high-quality development of China’s digital economy and building a digital talent powerhouse.