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VOL. 10, ISSUE 11 (2023)
The influence of financial literacy on household budgeting and consumption patterns in India
Authors
Riya Shalini
Abstract
This paper investigates the critical influence
of financial literacy on the way Indian households manage their money through
budgeting and their subsequent consumption patterns. As India's economy
continues its rapid growth, the financial landscape is becoming increasingly
complex for the average citizen. This research synthesizes data from national
surveys and academic studies conducted to explore the relationship between
financial knowledge and financial behaviour. The findings indicate a strong
positive correlation: households with higher levels of financial literacy are
significantly more likely to engage in systematic budgeting, maintain higher
savings rates, and exhibit more prudent consumption behaviour. Conversely,
lower financial literacy is associated with ad-hoc financial management, a higher
propensity for conspicuous consumption, and greater vulnerability to debt. The
paper discusses demographic disparities, including a persistent urban-rural and
gender gap in financial knowledge. It concludes with policy recommendations for
government bodies, financial institutions, and educational organizations to
enhance financial education initiatives, thereby fostering greater economic
stability and well-being for millions of Indian households.
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Pages:133-136
How to cite this article:
Riya Shalini "The influence of financial literacy on household budgeting and consumption patterns in India". International Journal of Multidisciplinary Research and Development, Vol 10, Issue 11, 2023, Pages 133-136
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