The Role of the Actual vs. Perceived Financial Literacy Gap in Decision-Making among Employed Individuals in Rajkot

Financial literacy has emerged as a key life skill that prominently influences people's capability to make informed and responsible financial decisions. Given the growing sophistication of financial systems and products, the relationships between financial knowledge and behavior are particularly important to individuals and collective economic well-being. This study is a focused attempt at investigating the role of financial literacy in financial decision-making among income-earning individuals in Rajkot. This paper focuses on those who actively create income for themselves through employment, business, or self-employment. It probes into their perception of fundamental financial concepts: budgeting, saving, investing, management of credit and retirement planning, and explores how the knowledge translates into actual financial behavior. Financial literacy is associated not only with personal economic outcomes but also with broader financial resilience and stability. This study will, therefore, draw on survey-based data collection from a heterogeneous sample of respondents with different socio-economic backgrounds. Key demographic variables include age, gender, education level, marital status, household structure, employment type, income level, and locality. Preliminary results indicate that a higher financially literate individual tends to exhibit sound financial behaviour, which includes saving in a disciplined manner, borrowing responsibly, and conducting future-oriented financial planning. Results underline the need for targeted programs on financial education, as existing knowledge gaps call for immediate attention. The research therefore emphasizes financial literacy as a necessary enabler in achieving good financial decision-making and long-term financial security among income-earning people by fostering informed choices, responsible money management, and improved financial well-being. It further stresses how improved financial literacy might position individuals to plan strategically, minimize risks, and realize better financial stability at both personal and professional levels.