V3I5P85

Financial Literacy Levels Among Youth and Its Impact on Investment Decisions 

Hemanth G^1*, Nandeesh N², Dr. Shekappa³

Abstract

In India’s rapidly evolving financial landscape, financial literacy has emerged as a critical determinant of sound investment behaviour among youth. This study investigates the financial literacy levels among 200 young individuals aged 18–30 and examines how these levels impact their investment decisions. Using stratified random sampling and a structured questionnaire, the study employs descriptive statistics, Pearson correlation, Chi-Square tests, ANOVA, and t-tests to analyse the data. Results reveal a strong positive correlation between financial literacy and investment participation (r=0.742, p<0.01), portfolio diversification (r=0.686, p<0.01), and investment confidence (r=0.758, p<0.01). High-literacy youth demonstrate 90.6% investment participation compared to only 41.7% among low-literacy youth. The study further identifies that social media is the primary financial information source for 36% of respondents, while only 4% rely on formal education—highlighting systemic gaps. The findings underscore the urgent need for structured financial literacy programs within the Indian education system.

Keywords:

Financial Literacy, Investment Decisions, Youth Finance, Portfolio Diversification, Risk Perception, Behavioural Finance, India