ASSESSMENT OF THE IMPACT OF FINANCIAL LITERACY ON FINANCIAL BEHAVIOR OF YOUNG PEOPLE IN LITHUANIA

Abstract

The rapidly changing financial services environment, the increasing scale of digitalisation, and the active involvement of young people in financial decision-making create a need to examine the impact of financial literacy on the financial behavior of young individuals in Lithuania. The financial behavior of young individuals is assessed through the dimensions of saving, shopping, short-term planning, and long-term planning. The study applied methods of scientific literature analysis and synthesis, comparative and logical analysis, a questionnaire survey, and the partial least squares structural equation modeling (PLS-SEM) technique. The empirical research sample consists of 338 respondents aged 15–34. The results of the study revealed that financial literacy has a statistically significant positive effect on young individuals’ saving behavior as well as their short-term and long-term planning, but it does not affect their shopping behavior. This leads to the conclusion that a higher level of financial literacy increases the likelihood of responsible financial decision-making and contributes to more sustainable financial management among young people in Lithuania.