Financial Literacy and Financial Well-Being: Trends, Determinants, and Emerging Research Directions

HRMARS - Financial literacy has become increasingly important in modern financial environments due to the growing complexity of financial systems, digital financial services, and individual financial responsibilities. At the same time, financial well-being has emerged as a major global concern associated with financial stress, financial insecurity, and poor financial decision-making. This study systematically reviews the existing literature on financial literacy and financial well-being to identify major research themes, emerging trends, and future research directions. The study adopted a systematic literature review approach using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) framework. Data were collected from the Scopus database using predefined search strings related to financial literacy and financial well-being. After applying inclusion and exclusion criteria, 142 journal articles published between 2020 and 2024 were selected for analysis. The findings reveal that financial literacy significantly influences financial behaviour, financial decision-making, and overall financial well-being. Several dominant themes emerged from the review, including financial behaviour, financial capability, digital financial literacy, financial inclusion, and psychological influences on financial well-being. The findings also indicate that financially literate individuals are more likely to engage in responsible financial practices such as budgeting, savings management, debt control, and long-term financial planning. In addition, recent studies increasingly emphasise the importance of digital financial literacy due to the rapid expansion of fintech platforms and online financial services. The review further identifies several research gaps, including the limited use of longitudinal and qualitative approaches and insufficient focus on vulnerable populations and long-term digital financial risks. This study contributes to accounting, finance, and economics literature by providing a comprehensive understanding of financial literacy and financial well-being while offering practical implications for policymakers, educators, and financial institutions.