THE IMPACT OF FINANCIAL LITERACY ON HOUSEHOLD DECISION-MAKING

Abstract

This study aims to analyse the impact of financial literacy on household decision-making. Financial literacy refers to an individual's knowledge and understanding of financial concepts and the ability to apply these skills in making sound financial decisions. To get the sample for this study, a purposive sampling technique was used as the sampling method. Purposive sampling involves selecting individuals or households based on certain criteria that are consistent with the research objectives. To obtain data for research, the researcher uses interview techniques as a data collection method. The interviews provide an opportunity for participants to express their thoughts, experiences, and attitudes, thereby providing rich qualitative insights into their financial decision-making process. Through open-ended questioning techniques, researchers can dig deeper into participants' perspectives, motivations, and reasons behind their financial choices. The data obtained from the interviews were processed using document analysis techniques. The result of this research showed that financial literacy has a strong correlation between the level of financial literacy and the nature of financial decisions made. Those with higher financial literacy levels demonstrated a broader range of financial strategies and a better understanding of complex financial instruments. Conversely, those with lower levels of financial literacy tended towards simpler, more conservative financial strategies.