Interrelation of Demographics and Behaviour: A Comprehensive Review of Financial Literacy

Description

Page: 152-156

Sania Bassi and Mohit Gupta (School of Business Studies, Punjab Agricultural University, Ludhiana, Punjab)

Financial literacy refers to the ability to understand as well as efficiently apply diverse financial skills, and it is becoming increasingly vital in the modern economic environment. This review paper examines the multifaceted range of financial literacy, including its empirical evidence along with theoretical foundations. It consolidates the body of knowledge regarding financial literacy’s determinants, consequences, and interventions. We investigate the interplay of individual, socioeconomic, and institutional variables that influence financial literacy, with women, low-income communities, and youth being especially vulnerable. The adverse consequences of financial illiteracy, such as improper financial planning, excessive debt, and diminished economic security, are all addressed in the study. Emerging trends have been examined as innovative ways to improve financial literacy and decision-making, including the use of digital mediums and behavioural nudges. It concludes with recommendations for policy initiatives and future research to promote an improved financially literate and robust society.