Financial Literacy and Financial Wellbeing: Systematic Literature Review

This systematic literature review aims to examine the relationship between financial literacy and financial well-being, given the growing importance of financial competence in today’s dynamic, digital, and highly unpredictable financial environment. The review conducted by Drawing on 31 peer-reviewed studies published between the year 2010 and 2024 by synthesizing findings from both developed and developing economies and analyzed via a PRISMA method using the descriptive content analysis The analysis of the review revealed that there are strong positive correlation between financial literacy and financial well-being, where individuals with higher financial literacy tend to make better financial decisions, manage their resources efficiently. They experience lower levels of financial stress compared to individuals with lower financial literacy levels. Additionally, the review's analysis identifies demographic differences, particularly among women, youth, and low-income populations, that significantly influence financial outcomes. This highlights the need for comprehensive financial literacy training. Furthermore, the rapid rise of digital financial services presents new challenges on the other side that urgently require digital financial literacy, especially in developing economies. Despite the wealth of existing research, significant gaps remain in understanding the interconnection of the long-term impacts of financial education programs and the role of digital and behavioral factors. Therefore, the findings of this review indicate the importance of developing comprehensive, context-sensitive, and future-oriented financial literacy initiatives to improve financial well-being across diverse populations.