ALiterature Review on Financial Literacy-APathway for Achieving Financial Freedom

Abstract

The importance of financial literacy is ever-increasing in present day context with new financial environment; the complexity of financial products has increased considerably over last two decades in India, the acumen of an individual with respect to importance of personal finance-planning facilitates him/her in making an informed financial decision; thereby, achieving financial freedom and financial literacy becomes a foundation for the same. Financial products in present offering multiple solutions to the investor to meet their investment needs, thus it becomes imperative for an individual to understanding the basic level of financial literacy to take prudent financial decision, financial literacy clubbed with proper financial planning can help an investor to achieve financial freedom. Financial freedom is said to be achieved when an individual achieves the desired financial goal based on prudent personal-financial planning process with defined objective. Little information is available about whether individuals have the required financial literacy and skills to navigate this new financial environment and how financial literacy creates a pathway for achieving financial freedom. Based on prior research, this review provides insights on how financial literacy creates a pathway for achieving financial freedom. In this review, miscellaneous literature existing globally has been reconnoitred to recognise the relationship between financial literacy & its role in achieving financial freedom. The paper exhibits that there are numerous ways in which financial literacy makes a pathway to achieve financial freedom. The results of the study suggest that financial literacy level of an individual helps an individual to create a platform to achieve the desired financial freedom with planned approach.