Impact of Financial Literacy on Investment Decisions Among Young Adults

Abstract

This study investigates the impact of financial literacy on investment decisions among young adults in urban and semi-urban Andhra Pradesh, India. With the proliferation of digital financial tools and diverse investment avenues, young adults face increasingly complex financial choices. The research, based on a survey of 400 respondents aged 18–30, reveals that while most young adults possess moderate financial literacy, only a minority demonstrate high proficiency. Findings indicate a strong positive correlation between financial literacy and informed investment behaviors: financially literate individuals are more likely to diversify investments, assess risks, and pursue goal-oriented financial planning. Conversely, those with limited financial knowledge tend to rely on traditional, low-risk options and are less equipped to capitalize on modern investment opportunities. The study underscores the urgent need for integrating financial education into academic curricula and promoting targeted awareness programs. Enhancing financial literacy is pivotal for empowering youth to make sound investment decisions, achieve financial independence, and contribute to inclusive economic growth.