Abstract:
Despite the popularization of various financial products and services, effective
personal financial management remains a significant challenge for millennials, who
are at a key life stage where financial literacy greatly impacts their financial decisions
in Sri Lanka. Yet, financial literacy plays a critical role in encouraging individuals to
make informed financial decisions and achieve financial stability by optimizing their
personal financial management skills. The financial literacy survey of Sri Lanka
(2021) highlights that the overall financial literacy score of 18-29 age group is 12.81
out of 21. Since millennials fall within the said age group, it becomes particularly
interesting to examine how their level of financial literacy influences their personal
financial management practices. Hence, this study examines the multifaceted
influence of financial literacy components: awareness, knowledge, skills, attitudes,
and behavior, on personal financial management practices of the distinctive
millennial population of Gampaha District, consists of a unique blend of urban and
rural environments, presenting a different socioeconomic landscape. The study
utilized a quantitative method following a deductive approach, employing a cross sectional survey and convenience sampling to gather 324 responses. A pilot study
was carried out before the mass survey. Reliability and validity tests, along with
assessments of normality and outliers, verified the dataset's robustness. After
conducting demographic and descriptive analyses, a multiple regression analysis was
carried out to evaluate the hypotheses. The findings showed a significant positive
impact of every sub-dimension of financial literacy on personal financial
management of millennials. The findings emphasize the need to improve financial
behavior and knowledge, which were identified as the most influential factors, along
with awareness, skills, and attitudes. As a result, this study underlines the importance
of customized financial education initiatives tailored to millennials, with an emphasis
on practical skill development and behavioral changes. These findings provide useful
empirical information for policymakers, educators, and financial institutions to
develop interventions that target the unique financial issues of millennials.
