THE RELATIONSHIP BETWEEN FINANCIAL LITERACY AND FINANCIAL, SOCIAL AND INDIVIDUAL WELL-BEING

Today, new financial products and services are constantly being introduced to the market, creating numerous and complex opportunities for both savings and investment. However, the excessive technical details of the products and the difficulty of the decision-making process may lead to erroneous financial decisions, especially in individuals with insufficient financial knowledge. Over time, the chain of individual financial mistakes spreads throughout the economy and damages the national economy. Therefore, the concept of financial literacy, which means the ability of individuals to make informed, effective and reliable financial decisions, is an issue that should be emphasised at the macro level. This study aims to examine the effects of individuals' financial literacy levels on financial, individual and social welfare in depth. In the study, the important role of financial literacy on individuals' ability to make the right financial decisions, to save, to budget and to assess risks is prioritised; in addition, the contribution of financial education in this process is discussed on the basis of a theoretical framework and literature. Within the framework of human capital theory, behavioural economics and rational choice theories, it is discussed how financial knowledge and skills affect not only individual welfare but also social economic stability. In this context, policy recommendations for increasing financial li