INTRODUCTION defined as the capacity to have familiarity with





literacy is the major challenge faced by all the countries globally. Adequate
level of financial literacy is required for financial wellbeing of the
individual and that of the family. Ineffectivemoney management can also result
in behavior that makes consumers more vulnerable to a financial crisis (Braunstein and Welch, 2002)1.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now


literacy means understanding of personal financial matters. Personal
financial literacy is more than just being able to balance a checkbook, compare
prices or get a job. It also includes skills like planning for long term
financial goals, retirement planning, and the discipline to use those skills
every day. Literacy is a key indicator of development. Today the people are
more aware about the education but only literacy is not adequate. The awareness
of financial literacy is now very essential. Financial literacy enable

Individuals to
navigate the financial world make informed investment decision and minimize
chances of being misled. Furthermore women should be knowledgeable especially
about it, since they are taking many household decisions. However they are not
interested in managing investment decision due to ignorance of Investment avenues.
Financial Literacy can broadly be defined as the capacity to have familiarity with
and understanding of financial market products, especially rewards and risks in
order to make informed choices. It is the ability to know, monitor and
effectively use financial resources to enhance the well-being and economic
security of an individual, his family, and his business.


OECD2 in 2011 defines
“Financial literacy is a combination of awareness, knowledge, skill, attitude
and behavior necessary to make sound financial decisions and ultimately achieve
individual financial wellbeing.”


Financial awareness means ability to use knowledge and skills to effectively
managefinancial resources
efficiently at a personal-level and through the lifecycle.


Financial knowledge is the
understanding of basic terms of finances like investment plans, saving schemes,
interest calculations, inflation and prices relationship, risk and return and
the role of diversification in risk reduction.


Financial skills are related to keep track of
income and expenditure and making budgets.


Financial attitude
means the
ability to plan ahead and maintain a savings account that matters. Financial
attitude influences the behaviour of the individual.


Financial behavior can be defined as any human
behavior that is relevant to money management like prompt payment of bills,
framing proper planned budgets and monitoring it, continuous saving habits etc.In
today’s world, nations which has a market with complicated products, the need
for financial literacy becomes inevitable.


 The effort to enhance financial literacy in
India over the last decade has also been given an impetus by the country’s
Central Bank, the Reserve Bank of India that has mandated that banks have to
take the initiative to enhance financial inclusion and financial literacy in
the country.A draft on national strategy for financial education was prepared
and released by RBI in July 2012 (RBI


Priyanka Agarwal(2015)4 in her paper
identified thatsince India is having a large population and a fast growing
economy with a national focus on inclusive growth, it is an urgent need to
develop a more vibrant and stable financial system. It is all the more
necessary to quickly formulate and implement the national strategy.

Anjali Devi (2016)5 explained that there
is gap of financial literacy among different sections of people such as men and
women, young and adults, rural and urban and also different categories of
people. There are several factors that actually influence the financial
literacy among theindividuals and one such prominent factor is ‘Gender’. The
studies across the world show that an average woman performs worse than men in
the tests of financial knowledge and have less confidence in their financial
skills. As far as India is concerned, women are more likely to experience difficulties
in making in savings and in choosing financial products appropriately. Women traditionally
were primarily responsible for the home and daily maintenance activities, which
often include household budgeting and bill paying. Women’s lack of knowledge
and confidence with regard t money management and investment programs impacts
their ability to reach their financial potential. The basic principles of
investing are the same across all gender, but women do not look at financial
matters in the same way as their counterpart does. Women who are empowered and
educated must utilize tools and resources to reach their financial potential.


 In this paper
the researcher proposes to study the level of financial literacy with variables
like financial knowledge, financial
attitude and financial behavior among working women in Delhi. The researcher
also aims at assessing the knowledge of females towards investment in various
financial instruments.Thus the structured closed ended questionnaire was
distributed among working women in Delhi to judge the level of financial
literacy. The most popular Investment avenues like Public Provident Fund, Life
Insurance Policy, Housing Property, National Saving Certificate, Gold&
Precious stones, Fixed Deposit, Equity, Mutual Fund, Systematic Investment
Plan, Exchange Traded funds have been taken for the purpose of this study.








This paper has
been divided into four sections.

 Section 1 provides a
brief review of relevantliterature on financial literacy.


Section 2 describes the sample size and sample descriptive.


Section 3 describes the methodology used for
measuring the effects of various socio-demographic variables on financial
knowledge, financial behavior andfinancial attitude.


Section 4 explains the findings and suggestions.




Studies have
shown that financial literacy does not mean that a person would be able to make
the right financial decision, as that person may not be familiar with the
financial awareness of the financial construct or particular instrument (Marriott and Mellett: 1996)6. The
importance of financial literacy was addressed by the Australian federal
government through the Consumer and Financial Literacy Taskforce (2004) and
thus, committed substantial resources to the development of a literacy


literacy is defined as the ‘ability of an individual to make informed judgments
and to take effective decisions regarding the use and management of money’ (ASIC: 2003, Noctor, Stoney and Stradling:


A more
comprehensive definition appeared in the Journal of Financial Service
Professionals which stated that ‘personal financial literacy is the ability to
read, analyze, manage and communicate about the personal financial conditions
that affect material well being’ (Anthes:


Studies by Marcolin and Abraham (2006); Schuchardt et
al., (2008); Remund (2010) and Huston (2010)9 found that despite
the rapid growth of interest in and funding for financial literacy and
financial education programs, it remains the case that the field of financial
literacy has a major obstacle to overcome: the lack of a widely disseminated
measure of financial literacy, developed through rigorous psychometric


Michael (2009)10 argues that a
lack of financial literacy can hamper the ability of individuals to make
well-informed financial decisions. For people who exhibit problems with
financial decision making, financial advice has the potential to serve as a
substitute for financial knowledge and capability.


Agarwalla Sobhesh Kumar, Barua Samir, Jacob Joshy,
Jayanth R. Varma (2015)11 conducted a study among 3000
individuals, and found that financial knowledge among Indians is very low than
the International standards. But the financial behaviour and attitude of the
employees and retired seems to be positive. The financial knowledge among the
women are marginally high than the men. Greater access to consumption credits
has influenced the financial behaviour of young employees.


Sandra. J. Huston (2010)12 This study
concluded that if an individual is financially literate then he must be able to
showcase the knowledge, skills, awareness and make adequate decisions among
various financial instruments within the market place. Financial education
should be customized according to needs, ability to learn by particular
demographics, life styles and learning style because one course stating the
relevance of financial education does not fit to all.

Lusardi, A. (2012)13 this research
concluded that financial literacy are lifetime skills which are required to
succeed in today’s scenario. Financial literacy is not widespread and it is
very less among demographic groups such as woman, elders with low educational

Bassa Scheresberg, C. (2013)14. According to
his study people with higher financial literacy or higher confidence in
personal finance management have great financial outcomes. They are more
inclined to use high cost borrowing options. They plan their life by making use
of financial instruments for both savings and investments.

Braunstein,S & Welch, C. (2002)15. According to
their research financial literacy has gained importance among various groups
like consumers, government agencies, schools, colleges and various other
groups. It was found financial illiteracy affects an individual family personal
fund management which leads to inability to save for future goals & dreams.
This made consumers more vulnerable to various financial crises. However now
consumers are given various options to obtain the financial literacy and they
are required to continuously update them as to manage their funds effectively.

Sumit kumar & Dr. Md. Anees (2013)16 has put the
relevance of education in India. The study stated that it is possible to
enhance the financial literacy among individuals through financial inclusion by
imparting mandatory financial education to young children in schools and
colleges. Sociological factors play a key role in financial decision making so
they should be dealt carefully.


Divya Joseph (2014)17 it was revealed
that over a period of ten years initiatives has been taken to improve the
financial literacy in India but still lot more efforts are required. Long term
planning and implementation is required to achieve desired results. It was also
suggested that not mere having knowledge about financial products would not
work rather implementation and usage of knowledge will work. 



Rekha Bahadur18 in 2015 identifies that in 21st century where
GDP and Per capita income is rising financial issues are required to be taken
on more serious note so that people of country are able to avail the benefits
of economic growth. It was concluded by her that improving financial literacy
and should be on highest priority for both central and state government,
business houses, NGOs, educational institutions at macroeconomic level.

Sobhesh kumar Agarwalla, Samir k. barua, Joshy jacob
and Jayanth r. varma(2015)19 Their Study suggested that education is
an important  factor that leads to
financial literacy but having financial education does not  imply high level of financial literacy. The
study also stressed upon the designing of programs that are designed to
increase the dimensions of financial literacy, knowledge, awareness and
attitude. The programs should be funded by the government so that people having
earning low level of income can also be benefited from these programs.


Priyanka Agarwal , Dr. (Mohd) Shamim Ansari ,
Dr.Suman Yadav , Radhika Kureel (May 2015)20 According to
this study women should be more conscious about their savings and investments
because to a great extent they depend on spouse and family members. It is
suggested that individuals should be more focused for their investment decision
and saving allocation. Due to lack of knowledge about the investment avenues
they mainly invest in bank and post office fixed deposits not in mutual funds,
share etc.


(Ms. Mani Goswami ,January 2017)21According to
study the outcome was that gender, level of Education qualification, age,
personal disposable income does not directly impact the financial behavior of
an individual but source of income, parent’s occupation and discipline of study
do impact the financial behavior of students significantly. M. Gowri suggested
in her research work that lack of financial literacy and less knowledge about
investment avenues has led to poor management of finance in MSME’s.