FINANCIAL LITERACY EDUCATION A KEY TO COMBATING HOUSEHOLD DEBT
DOI:
https://doi.org/10.62207/19bs7179Keywords:
financial literacy, household debt, socio-economic factors, financial education, systematic literature reviewAbstract
Increasing household debt is a significant global problem, with financial literacy education often proposed as a key solution. This research aims to analyze the influence of socio-economic factors on the effectiveness of financial literacy education in reducing household debt, using a systematic literature review approach to 50 indexed articles. The main findings show that income, education level, employment status, and geographic location significantly influence the success of financial literacy in shaping debt management behavior. The implications of this research provide insight for policy makers and educational institutions to develop financial literacy programs that are more inclusive and responsive to community needs.
References
Adetunji, O. and David‐West, O. (2019). The relative impact of income and financial literacy on financial inclusion in nigeria. Journal of International Development, 31(4), 312-335. https://doi.org/10.1002/jid.3407
Ali, P., Anderson, M., McRae, C., & Ramsay, I. (2016). The financial literacy of young people:socioeconomic status, language background, and the rural-urban chasm. Australian and International Journal of Rural Education, 54-66. https://doi.org/10.47381/aijre.v26i1.6
Bhutta, N., Bricker, J., Dettling, L., Kelliher, J., & Laufer, S. (2019). Stress testing household debt. Finance and Economics Discussion Series, 2019.0(8). https://doi.org/10.17016/feds.2019.008
Bongomin, G., Munene, J., Ntayi, J., & Malinga, C. (2017). Financial literacy in emerging economies. Managerial Finance, 43(12), 1310-1331. https://doi.org/10.1108/mf-04-2017-0117
Cai, Y., Yusof, S., Amin, R., & Arshad, M. (2020). Household debt and household spending behavior: evidence from Malaysia. Malaysian Economic Journal, 54(1). https://doi.org/10.17576/jem-2020-5401-8
Dewanty , N. and Isbanah , Y. (2018). Determinants of the financial literacy: case study on career woman in Indonesia. Economics, 17(2), 285-296. https://doi.org/10.15408/etc.v17i2.6681
Dewi, V., Febrian, E., Effendi, N., Anwar, M., & Nidar, S. (2020). Financial literacy and its variables: the evidence from indonesia. Economics & Sociology, 13(3), 133-154. https://doi.org/10.14254/2071-789x.2020/13-3/9
Dumitrescu, B., Enciu, A., Hândoreanu, C., Obreja, C., & Blaga, F. (2022). Macroeconomic determinants of household debt in oecd countries. Sustainability, 14(7), 3977. https://doi.org/10.3390/su14073977
Grohmann, A. and Menkhoff, L. (2020). The relationship between financial literacy and financial inclusion. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3735809
Herispon, H. (2019). The effect of bank behavior, financial literacy on financial inclusion and debt behavior in household consumption.. https://doi.org/10.4108/eai.5-9-2018.2281280
Kadoya, Y. and Khan, M. (2019). What determines financial literacy in japan?. Journal of Pension Economics and Finance, 19(3), 353-371. https://doi.org/10.1017/s1474747218000379
Kaiser, T. and Menkhoff, L. (2017). Does financial education impact financial literacy and financial behavior, and if so, when?. The World Bank Economic Review, 31(3), 611-630. https://doi.org/10.1093/wber/lhx018
Liu, Z., Zhao, K., Liu, J., & Liu, Y. (2023). The impact of household debt on the health of the elderly in china: evidence from china family panel studies. International Journal of Environmental Research and Public Health, 20(4), 2946. https://doi.org/10.3390/ijerph20042946
Lusardi, A. and Mitchell, O. (2013). The economic importance of financial literacy: theory and evidence. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2260193
Madhushani, P. (2023). Financial literacy and its determinants: a case of professionals in colombo district sri lanka. International Journal of Accounting and Business Finance, 9(2), 45-73. https://doi.org/10.4038/ijabf.v9i2.142
Mian, A., Sufi, A., & Verner, E. (2017). Household debt and business cycles worldwide*. The Quarterly Journal of Economics, 132(4), 1755-1817. https://doi.org/10.1093/qje/qjx017
Murendo, C. and Mutsonziwa, K. (2016). Financial literacy and savings decisions by adult financial consumers in zimbabwe. International Journal of Consumer Studies, 41(1), 95-103. https://doi.org/10.1111/ijcs.12318
Murendo, C. and Mutsonziwa, K. (2016). Financial literacy and savings decisions by adult financial consumers in zimbabwe. International Journal of Consumer Studies, 41(1), 95-103. https://doi.org/10.1111/ijcs.12318
Rahman, N., Kosim, Z., & Yeok, S. (2016). Household indebtedness in malaysia: a survey evidence. International Journal of Trade Economics and Finance, 7(4), 102-104. https://doi.org/10.18178/ijtef.2016.7.4.507
Sweet, E., Nandi, A., Adam, E., & McDade, T. (2013). The high price of debt: household financial debt and its impact on mental and physical health. Social Science & Medicine, 91, 94-100. https://doi.org/10.1016/j.socscimed.2013.05.009
Triana, L. and Ibrohim, I. (2022). Factors affecting student financial literacy. Ilomata International Journal of Tax and Accounting, 3(4), 421-434. https://doi.org/10.52728/ijtc.v3i4.591
Tuffour, J., Amoako, A., & Amartey, E. (2020). Assessing the effect of financial literacy among managers on the performance of small-scale enterprises. Global Business Review, 23(5), 1200-1217. https://doi.org/10.1177/0972150919899753
Twumasi, M., Jiang, Y., Ding, Z., Wang, P., & Agbenyo, W. (2022). The mediating role of access to financial services in the effect of financial literacy on household income: the case of rural ghana. Sage Open, 12(1). https://doi.org/10.1177/21582440221079921
Wilkinson, A., Pettifor, A., Rosenberg, M., Halpern, C., Thirumurthy, H., Collinson, M., … & Kahn, K. (2017). The employment environment for youth in rural south africa: a mixed-methods study. Development Southern Africa, 34(1), 17-32. https://doi.org/10.1080/0376835x.2016.1259986
Xu, S., Yang, Z., Ali, S., Li, Y., & Cui, J. (2022). Does financial literacy affect household financial behavior? the role of limited attention. Frontiers in Psychology, 13. https://doi.org/10.3389/fpsyg.2022.906153
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Neill Ayu Moralina Zega, Ray Octafian (Author)

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.