Global Journal of Management and Business Research, C: Finance, Volume 22 Issue 5

Determinants of Financial Literacy and its Effect on Financial Wellbeing-A Study on Young Population Sangeeta α , Amit Kumar Singh Panwar σ & (Dr., CMA, CS) Pradeep Kumar Aggarwal ρ I. I ntroduction ver the past few years, the world economy has been declining, and the recession has caused inflation, unemployment, and a decline in financial well-being. The decline in financial well-being has harmful effects on mental and physical health. It creates problems of stress, anxiety, depression, and suicide in our society (Taft et al., 2013). Financial literacy has become a much-discussed topic in recent years for the financial empowerment of people and their lives. It catches the attention of a common person who is willing to meet their daily financial needs and plan for a secure future. Financial literacy strengthens people's ability to access financial services, manage their budgets, and maximise resource utilization, which encourages economic development. Financial literacy increases people's confidence and self-control, which encourages their participation in the formal economic system. It will boost your confidence and well-being. As the literature shows, almost all countries in the world are dealing with the issue of financial literacy. But the concept of financial literacy is not yet clear. Different researchers use different definitions of financial literacy. Financial literacy is defined by the OECD (OECD, 2017) as "a combination of understanding, expertise, ability, attitude, and action required to make sound financial decisions and eventually achieve individual well-being". "Financial literacy is the ability to make sound decisions and appropriate choices regarding the use and management of capital" (Huston, 2010)." Financially literate people make good choices about their finances and reduce their risk of being deceived on financial issues" (Beal &Delpachitra, 2003). Financial literacy is affected by the level of education and income of an individual (Nahar et al., 2022) in previous work on financial literacy, researchers used various aspects of Author α : Research Scholar, Finance Department, Sharda University, Greater Noida, India. e-mails: 2019000121.sangeeta@dr.sharda.ac.in, rajputsangeeta47@gmail.com ORCID: -0000-0002-7069-0778 Author σ : Research Scholar, Management Department Shri Venkateshwara University, Gajraula, Amroha, India. ORCID; -0000-0001-6514-1953 Author ρ : Professor, Finance Department, SBS, Sharda University, Greater Noida, India. e-mail: pradeep.aggarwal@sharda.ac.in ORCID: - 0000-0002-4104-8188 financial literacy. Few scholars have used financial literacy and financial knowledge as the same term, while others find financial knowledge is associated with financial literacy and has a high correlation. The OECD has given a detailed view of financial literacy. According to the OECD (2011), "financial literacy is a blend of financial behaviour, financial attitude, and financial awareness," but in this study, researchers added one more determinant to financial literacy, so it is therefore important to gain insight into the association between "financial knowledge, financial attitude, financial behaviour and financial socialisation with financial wellbeing" among the younger generation related to the financial aspects. II. L iterature R eview Financial literacy has been researched in a number of ways. Government bodies, private organisations, and individuals have undertaken studies in various countries to check the level of financial literacy in their countries. Lusardi and Mitchell (2014) "People's willingness to process financial information and make a rational financial saving, capital accumulation, debt, and pension decisions." Atkinson and Messy (2012) "A combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions and ultimately achieve individual financial wellbeing". Huston (2010) "Financial literacy has introduced an implementation layer enabling individuals to have the capacity and trust to use financial skills to make financial choices". The notion of financial literacy is still being debated. In the present literature, financial literacy has numerous interpretations since financial literacy authorities have given researchers and authors the freedom to express and assess financial literacy (Remund, 2010). "Financial literacy, financial behaviour, and financial awareness should be seen interchangeably" by ("Hassan Al-Tamimi and Anood Bin Kalli, 2009, Howlett, Kees and Kemp, 2008, Yoong, See and Baronovich, 2012"). Most of the research used an objective evaluation method to assess individual financial literacy. Various researchers used objective tests used in different ways in which they assess the financial literacy of the individual. Bhushan and Medury (2014) measure financial literacy by giving objective O 39 Global Journal of Management and Business Research Volume XXII Issue V Version I Year 2022 ( ) C © 2022 Global Journals