The Impact of Financial Knowledge, Financial Behavior and Financial Attitude on Investment Decisions

Abstract

This study investigates the impact of financial literacy on investment decision-making among Millennials and Gen Z individuals residing in Haryana, India. Utilizing both descriptive and causal research designs, the study assesses how financial knowledge, financial behavior, and financial attitude influence investment decisions. Data were collected through a structured questionnaire from 400 respondents and the analysis employed multiple regression and structural equation modeling (SEM) techniques. The findings revealed that financial literacy, encompassing knowledge, behavior, and attitude, significantly affects investment decisions. Specifically, financial attitude (β = 0.315), financial behavior (β = 0.197), and financial knowledge (β = 0.231) all have positive and significant impacts on investment decisions. The model fit estimates confirmed the robustness of the SEM model, with values indicating a strong fit. This study highlights the critical role of financial literacy in improving investment decision-making and suggests that enhancing financial education can lead to better financial outcomes.