Effect of Financial Literacy on Financial Decision and Consumer Behavior

Abstract

This study's main goal was to investigate how financial literacy affects consumer behavior and financial decisions. An online questionnaire was used to gather the data for this investigation from the workers of financial institutions in Lahore, Pakistan. 325 employees, whose ages ranged from 18 and up to 60, made up the sample of survey questions. The researcher examined the association between financial literacy, consumer behavior, and financial decisions by utilizing respondents' demographics, measurement model assessment, and structural model evaluation. This was done using SPSS and partial least square (PLS-SEM) software. As a result, the findings indicated that financial literacy has a favorable impact on financial decisions. Also, the research reveals that consumer behavior in using financial services is affected by financial literacy. Additionally, the results showed how consumer behavior greatly impacts people's goals to make wise financial decisions that will lead to wealth creation.