Financial Literacy and Personal Financial Decision-Making among Young Adults: A Conceptual and Empirical Research Framework

As people have to deal with a broader spectrum of financial products, digital payment systems, credit options, investment opportunities and financial planning decisions, financial literacy is gaining in significance. This paper discusses the connection of financial literacy with personal financial decision making among young adults and proposes an empirical research protocol to be used in future field research. Financial knowledge, financial attitude and financial behaviour are the important components of financial literacy, while budgeting, saving, borrowing and investment planning and risk management are important components of financial decision making. The paper briefly reviews the existing literature and identifies the gaps in the study of Joint Effect of Knowledge, Attitude and Behaviour in Emerging Market context. The structured methodology proposed is descriptive and explanatory research with research primary data in the form of a questionnaire, reliability test, descriptive statistics, correlation and multiple regression. The purpose of the framework is to enhance the understanding of researchers and financial educators that financial capability can have an impact on more strategic financial decisions. Implications for financial education, financial institutions, employers, educational institutions and policy makers are provided in the conclusion.