FINANCIAL LITERACY IN THE MODERN WORLD: CONCEPTS, CHALLENGES, AND DEVELOPMENT PROSPECTS
Abstract
Financial literacy is a critical factor influencing individual well-being, economic stability, and national development. In today’s rapidly evolving financial environment, characterized by globalization and digitalization, financial literacy is a necessity rather than an advantage. It encompasses competencies such as financial planning, investment management, and risk assessment. Despite its significance, financial literacy levels remain inadequate, leading to financial mismanagement, excessive debt, and exposure to fraud. The growing complexity of financial markets and technological advancements demand higher financial awareness. Individuals face an expanding range of financial products, from traditional banking services to digital assets, requiring specialized knowledge. Limited financial literacy exacerbates social inequalities by restricting financial accessibility. Policymakers and financial institutions emphasize the need for financial education, integrating financial literacy programs into formal curricula to develop financial resilience. The rise of digital financial services further highlights the importance of digital financial literacy in cashless transactions, online banking, and decentralized finance. Beyond personal finance, financial literacy strengthens financial markets by fostering responsible borrowing and investment behaviors, reducing systemic risks. A financially educated population supports sustainable economic growth, entrepreneurship, and innovation. However, socioeconomic disparities, behavioral biases, and financial system complexities hinder financial literacy progress. Addressing these challenges requires a multidisciplinary approach, involving policymakers, financial institutions, and educators. As financial literacy plays an increasing role in financial security, further research is needed to assess the impact of financial education strategies, behavioral decision-making patterns, and technological advancements on financial awareness. Understanding these factors will contribute to evidence-based policies, fostering a financially informed society capable of managing modern financial challenges.
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