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@article{189526,
        author = {Soumya M and Dr. Ranjini R. Varma and Saraswathi C},
        title = {Role of Financial Literacy in Shaping Saving and Spending Behaviour},
        journal = {International Journal of Innovative Research in Technology},
        year = {2025},
        volume = {12},
        number = {7},
        pages = {6475-6480},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=189526},
        abstract = {Financial literacy has emerged as a critical determinant of individual financial behaviour in an increasingly complex and dynamic financial environment. With the proliferation of digital payment systems, easy access to credit, and rising consumerism, individuals are required to make informed decisions regarding saving and spending to ensure long-term financial stability. In this context, the present study examines the role of financial literacy in shaping saving and spending behaviour among individuals. The study aims to assess the level of financial literacy and analyse its influence on saving practices and spending patterns.
The research adopts a descriptive and analytical design and is based on both primary and secondary data. Primary data were collected through a structured questionnaire administered to 120 respondents selected using convenience sampling. The questionnaire included statements related to financial literacy, saving behaviour, and spending behaviour measured on a five-point Likert scale. Secondary data were obtained from relevant journals, books, and reports to support the conceptual framework and literature review. The collected data were analysed using SPSS, employing descriptive statistics, reliability analysis, Pearson correlation, and regression analysis to test the study objectives.
The findings reveal that respondents possessed a moderate to high level of financial literacy, indicating reasonable awareness of basic financial concepts such as budgeting, interest rates, and financial planning. The analysis further shows that financial literacy has a significant positive influence on saving behaviour. Individuals with higher financial literacy levels were more likely to engage in systematic saving, maintain emergency funds, and plan for future financial needs. Correlation and regression results confirmed that financial literacy explains a substantial proportion of variation in saving behaviour, highlighting its role in promoting financial discipline.
The study also found a significant negative relationship between financial literacy and spending behaviour. Financially literate individuals demonstrated better expenditure control and were less inclined toward impulsive or unnecessary spending. Regression analysis confirmed that higher financial literacy significantly reduces irrational spending tendencies, emphasizing the role of financial knowledge in encouraging responsible consumption behaviour.
Overall, the study concludes that financial literacy plays a dual role by enhancing saving behaviour while simultaneously regulating spending patterns. The findings underscore the importance of strengthening financial literacy through targeted educational initiatives and policy interventions to promote financial well-being, reduce financial stress, and encourage sustainable financial behaviour among individuals. The study contributes to existing literature by providing empirical evidence on the behavioural implications of financial literacy in the context of personal financial management.},
        keywords = {Financial Literacy, Saving Behaviour, Spending Behaviour, Financial Decision-Making, Financial Well-being},
        month = {December},
        }