An Empirical Analysis of Components of Financial Literacy and Inter Correlation among Variables

Abstract

Financial literacy is the capacity to understand how money works; it is the blend of expertise, information, disposition and conduct that helps in taking relevant financial decisions and making proper usage of financial services which ultimately helps in improving the quality of life of an individual. Since, today’s financial market is very complex effective financial decision making is the need of an hour and financial literacy is a way to achieve that. Confirmatory factor analysis approach has been used to find out the components of financial literacy; thereafter studies the association among the variables of the each component determined. Five point likert scaled questionnaire has been used for collecting the data from women working in both private as well as public organisation. The findings revealed that financial knowledge, behaviour and attitude are the three major components of financial literacy and variables of each component are positively associated with each other.