Abstract:
This study examines the impact of financial literacy on financial decision-making
among undergraduates at Rajarata University of Sri Lanka. With increasing financial
responsibilities and limited resources, students increasingly need to make
independent financial decisions without adequate knowledge or guidance. The
research focuses on five core areas of financial literacy: knowledge about budgeting,
knowledge about savings, debt management, understanding financial risk, and
investing knowledge, and how these influence the financial decisions made by
students. A quantitative research approach was employed, using structured
questionnaires distributed to a randomly selected sample of 180 undergraduates
across different faculties. The data were analyzed using descriptive statistics,
correlation analysis, and multiple regression analysis via SPSS software. The
findings revealed that most aspects of financial literacy particularly knowledge about
budgeting, knowledge about savings, understanding financial risk, positively and
significantly impact financial decision-making. However, debt management and
investing knowledge showed a statistically insignificant relationship with financial
decisions. The study stresses the need for practical financial education in Rajarata
University of Sri Lanka, especially for students from rural and low-income
backgrounds. Improved financial literacy can foster smarter financial decisions and
long-term stability of undergraduates. These insights can guide institutions and
policymakers in creating targeted programs for Sri Lankan undergraduates
