Abstract
Despite the daily efforts to cope with life's economic challenges, most Ghanaians are financially insecure. This has made pursuing lifelong ambitions more difficult. Given these realities, it is reasonable to believe that financial literacy and consumer financial stability will be a successful strategy for promoting economic stability. This stems from the realization that financial literacy is supportive in making informed financial decisions at both the household and macroeconomic levels. A high human development index score indicates that persons who make up the country's population are in good health. As a result, linking household decisions to broader policy outcomes becomes increasingly vital. This research aims to find a link between financial literacy and consumer financial stability as well as their relationship with macroeconomic stability. Financial literacy has a significant association with economic stability as measured by citizens' welfare. This discovery has several ramifications for financial literacy initiatives. In addition, consumer financial wellness has an insignificant positive impact on national economic stability. Nonetheless, it demonstrates how a financially sound consumer can boost aggregate demand by spending more, impacting job creation and macroeconomic growth. The Probit-Regression Model facilitated data analysis using a participant population of 960 across eight studied regions in Ghana. This study believes that national governments should take the favorable correlations between financial literacy and consumer financial stability on the one hand, and national economic stability on the other, seriously. As a result, policy efforts should consider the relationship between microeconomic actions and macroeconomic outcomes since the former is observed to influence the latter.
Highlights
Despite persistent efforts to deal with life's economic challenges, most Ghanaians are financially insecure, making the pursuit of lifelong goals more difficult
Conclusion and Policy recommendations This study tried to establish any conceivable relationship between financial literacy and consumer financial stability, as well as how they act separately or in tandem to affect national economic stability
Improved financial literacy abilities is a conduit for better financial decisions at both the household and national levels
Summary
Despite persistent efforts to deal with life's economic challenges, most Ghanaians are financially insecure, making the pursuit of lifelong goals more difficult. The Probit-Regression method facilitated data analysis using a participant population of 960 across eight studied regions in Ghana Reasoning from these findings, national governments should take advantage of the favourable relationship between financial literacy and consumer financial stability on one hand, and national economic stability on the other seriously, as aggregate consumption volatility is lower in countries with a high level of financial literacy, which is reflected in individual saving and investment behaviour. Over the last couple of decades, educators, financial sector experts, business associations, governments, and legislators have engaged in lengthy debates over financial in/stability and financial il/literacy (Hogarth, 2006) Despite this considerable attention and publicity, an attempt by scholars to demonstrate a relationship between individual/household financial stability and economic system stability is glaringly absent. There is need to find out: If individual/household financial well-being impacts national economic stability Whether individual/household expenditure pattern influences national policy initiatives
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