A STUDY ON FINANCIAL LITERACY: A CRUCIAL TOOL IN COMBATING FINANCIAL MYOPIA WITH REFERENCE TO ERNAKULAM DISTRICT

Financial Myopia refers to the tendency of individuals to focus on immediate benefits while neglecting long-term financial consequences. It is a form of cognitive bias where people prioritize immediate gratification over future financial stability, often leading to poor financial decision-making. The study was conducted to investigate the factors contributing to financial myopia, to identify myopic status of individuals, to test the association between demographic factor of age and financial myopia using ChiSquare testing and, to analyze the outcomes and steps to avoid financial myopia. Data for the study has been collected from both primary and secondary sources. Area of the study is limited to the respondents of Ernakulam district with the sample size of 100. Data collected has been analyzed and presented in the form of tables, pie chart and bar-graphs. The study concludes by identifying lack of financial literacy, instant access to credit, peer pressure and short-term gains as factors that contributes to financial myopic behavior. Majority of the respondents possess myopic behavior. The outcomes of financial myopia include debt accumulation, increased stress and anxiety, financial instability and, low or no savings. The Chi-Square Test proves that there exists a significant association between demographic factor of age and financial myopia. Being financially literate was found to be the best possible and effective solution to avoid financial myopia in future.