Does Financial Literacy Lead to Better Financial Decisions? Insights from India’s Female Workforce

Financial literacy should empower women in emerging economies such as India, where there still exist gender disparities in financial access and decision-making. In this study, the researcher examines the influence of financial literacy on the financial management of salaried women in India, with financial coping behaviour mediating and self-efficacy moderating the situation. A structured questionnaire was used to collect data on 657 urban and semi-urban working women. Analysis using SEM showed that financial literacy has a significant effect on financial management behaviour (30.5) (β = 0.428, p < .001), and financial coping behaviour interposes this relationship. This was reinforced by financial self-efficacy (β = 0.183, p < .001), but there were specific financial behaviours that were influenced by financial knowledge (β = 0.291) compared to awareness (β = 0.334). The findings indicated high urban–rural differences, with urban respondents expressing better financial behaviour. This implies that specialized financial education initiatives should be designed to meet cognitive (knowledge/awareness) and psychological (self-efficacy) aspects of semi-urban communities. The study fits in the financial empowerment literature by confirming a holistic framework of comprehending the financial habits of Indian women and offering evidence-based suggestions to policymakers and financial institutions to improve the financial inclusion of women.