Financial Literacy and Financial Wellbeing among Indian Households

Abstract

This study is conducted to explore the impact of financial literacy on financial wellbeing of Indian households. Various measures like financial knowledge, financial attitude, and financial behaviour were assessed using survey data of 47,132 Indian households taken from the Financial Inclusion Insights (FII) survey, wave 5, conducted by Intermedia. The results from logistics regression indicate that financial knowledge (objective and subjective), financial attitude and financial behaviour are significant predictor of financial wellbeing. It is evident from the study that both financial attitude and financial behaviour of an individual strongly and positively influence financial wellbeing. Though actual financial knowledge might not influence much financial wellbeing whereas subjective financial knowledge i.e., self-assessed financial knowledge might strongly impact financial wellbeing in case of deviation between actual and self-assessed knowledge. Financial wellbeing significantly varies with age, education, working profile and urban-rural area category while gender attribute does not significantly impact financial wellbeing.