FINANCIAL LITERACY’S IMPACT ON DECISION-MAKING PROCESS: AN EXPLORATORY STUDY IN ALGERIA

Abstract

In the ever-evolving economic landscape of Algeria, where financial stability is intricately linked to individual well-being, the role of financial literacy becomes increasingly significant. Financial literacy, encompassing the comprehension and application of financial concepts, is a vital tool for individuals to navigate complex financial decisions. The main objective of this study is to explore how financial literacy affects the decision-making process among individuals in Algeria. The quantitative data was collected from 295 participants through an online survey using the snowball sampling method. The data was analyzed using simple linear regression to examine the correlation between key variables, including financial knowledge, financial behavior, financial attitude, and decision-making. The results suggest that solely possessing financial knowledge does not significantly affect the decision-making process. However, the study found that financial attitudes and behaviors have a positive influence on decision-making. These findings underscore the importance of considering both financial attitudes and behaviors alongside financial knowledge to enhance individuals' decision-making abilities. By exploring these connections, the study aims to contribute valuable insights that can guide the development of tailored financial literacy programs, thus empowering individuals in Algeria to make informed and effective financial decisions in their unique socio-economic environment