A STUDY OF FINANCIAL PLANNING AND INVESTMENT FOR HOUSEHOLD DEVELOPMENT IN SOUTHERN DISTRICT OF TAMIL NADU

This study investigates the influence of financial literacy on saving and investment behavior for household development in the southern districts of Tamil Nadu. Using a structured questionnaire and primary data collected from 180 respondents through a simple random sampling method, the research analyzes how financial knowledge, financial awareness, financial attitude, and risk perception contribute to individuals’ financial planning. Structural Equation Modeling (SEM) and mediation analysis were employed to assess direct and indirect effects among the variables. The findings reveal that both financial knowledge and awareness have significant positive impacts on saving behavior and investment decisions, justifying the rejection of the null hypothesis. Additionally, financial attitude and risk perception partially mediate the relationships between financial literacy and financial behavior, highlighting their behavioral relevance in financial planning. The reliability of the constructs was confirmed through high Cronbach’s alpha, composite reliability (CR), and average variance extracted (AVE) values. Model fit indices further validated the model’s robustness. Gender-based multi-group analysis found no significant differences, indicating that financial literacy positively affects financial behaviors irrespective of gender. The study concludes that enhancing financial literacy—along with shaping positive financial attitudes and improving risk awareness—is essential to strengthening household financial planning and investment decisions. These findings provide valuable insights for policy-makers and financial educators focused on inclusive financial development.