“Analysis of Financial Literacy Metrics on the Efficiency of Investment Decision-Making among Individual Investors”s

In contrast, when budgeting practices, consistent saving behavior, and emergency fund creation were examined together, they explained a substantially larger share of the variance in investment decision confidence (R² = 0.2255), with budgeting practices emerging as the single strongest predictor. This demonstrates that the behavioral application of financial knowledge — how investors manage, save, and plan their money on a day-to-day basis — matters considerably more than abstract financial concept knowledge in shaping confident and effective investment decisions. These findings carry practical implications for financial educators, policymakers, and financial service providers. Rather than focusing narrowly on teaching financial theory, literacy initiatives should prioritize building actionable financial habits such as structured budgeting, disciplined saving, and emergency fund planning, particularly among first-time and young retail investors entering markets through digital platforms. Strengthening these behavioral competencies is likely to yield more meaningful improvements in investment decision-making quality than conceptual education alone.    

1.Vishwakarma, S. (2026). A comprehensive study on the impact of financial literacy on investment decision-making of individual investors. International Education and Research Journal, 12(1). https://doi.org/10.5281/zenodo.18401340 2.Rahmiyati, N., & Somodiharjo, K. (2025). The impact of financial literacy, investment decision-making, risk tolerance, and behavioral biases on individual investment performance. The ES Accounting and Finance, 3(3), 223–237. https://doi.org/10.58812/esaf.v3i03.668 3.Alam, Z., Sami, L., Aman, M., & Fahad. (2024). Understanding the influence of subjective financial literacy on the investment decisions of individual investors in India. MDIM Journal of Management Review and Practice, 3(1), 18–36. https://doi.org/10.1177/mjmrp.241290938 4. Cucinelli, D., & Soana, M. G. (2023). Financial literacy and sustainable investment choices: The role of financial intermediaries. Research in International Business and Finance, 66, 102027. https://doi.org/10.1016/j.ribaf.2023.102027 5. Shroff, S. J., Paliwal, U. L., & Dewasiri, N. J. (2024). Unraveling the impact of financial literacy on investment decisions in an emerging market. Business Strategy & Development, 7(1). https://doi.org/10.1002/bsd2.337 6. Bhatia, M., Arora, R., & Mehrotra, V. (2024). Interplay between financial literacy, firm’s characteristics, behavioural biases and investment choices—A conditional mediation model. Global Business Review. Advance online public https://doi.org/10.1177/09721509241288622