ROLE OF PERSONAL FINANCIAL LITERACY IN INVESTMENT CHOICES OF YOUNG ADULTS

In recent years, the growing complexity of financial markets and the increasing availability of diverse investment options have made financial literacy a crucial skill, particularly among young adults. Personal financial literacy refers to an individual’s ability to understand and effectively use financial knowledge in decision-making. The primary objective of this study is to examine the role of personal financial literacy in shaping the investment choices of young adults. The study adopts a quantitative research design, using structured questionnaires to collect data from young individuals aged 18–35. Statistical tools such as descriptive analysis and correlation techniques are employed to analyze the relationship between financial literacy levels and investment behavior. The findings indicate that individuals with higher levels of financial literacy are more likely to engage in diversified and informed investment decisions, including participation in equity markets, mutual funds, and long-term financial planning instruments. In contrast, individuals with lower financial literacy tend to rely on traditional and low-risk investment avenues such as savings accounts and fixed deposits. The study concludes that financial literacy significantly influences investment decision-making and risk tolerance among young adults. Enhancing financial education through formal and informal channels can lead to more effective financial planning and improved economic well-being.