Financial Planning in Millennials: Assessment through moderating effect of Financial Literacy

The purpose of this study is to examine the influence of financial literacy on the financial behavior and planning outcomes of millennials, with an aim to identify potential strategies for enhancing financial education and planning among this crucial demographic segment. The study uses structured questionnaires administered to 538 millennial respondents in India, to gather data on financial literacy and personal financial planning. The data was analysed using partial least squares structural equation modelling (PLS-SEM) in Smart PLS 4.0 software. The findings indicate that a significant proportion of millennials lack fundamental financial knowledge, and this deficit significantly impacts their financial planning outcomes. Higher levels of financial literacy are associated with better budgeting, saving, and investing habits. However, gaps in financial literacy can lead to over borrowing, insufficient retirement savings, and poor investment choices. This study contributes to the existing literature by examining the moderating effect of financial literacy between personal financial requirements and financial planning among millennials.