A Study Of Impact Of Financial Literacy On Financial Behaviour In Gujarat

Abstract

Financial literacy has become increasingly important in today’s modern economy, as individuals are required to make financial decisions related to savings, borrowing, investment, and future planning. In India, and particularly in Gujarat, the level of financial awareness among people differs widely due to variations in income, education level, and access to financial information. This study aims to examine the impact of financial literacy on financial behaviour among adults in Gujarat. Financial literacy in this study refers to basic financial knowledge regarding interest calculation, inflation, loans, financial products, budgeting, and investment planning. Financial behaviour includes real-life financial actions such as maintaining a budget, regular saving, responsible use of credit, investing money wisely, and using formal banking services. Primary data was collected from 300 respondents across different regions of Gujarat using a structured questionnaire. The study follows an exploratory research design. A correlation and regression analysis was carried out to assess the strength of association between financial literacy and financial behaviour. The results clearly indicate that individuals with higher levels of financial literacy tend to demonstrate better financial behaviour. Respondents who understood concepts like interest, inflation, and financial planning were found to save more regularly, use banking services more efficiently, and avoid unnecessary debt. The study concludes that improving financial literacy can significantly change the financial choices of people in Gujarat. It recommends the need for financial education programs at school, college, and community levels and increased awareness campaigns by financial institutions. Better financial understanding can help individuals achieve long-term financial stability and contribute to overall financial inclusion in the state.