Published Online:March 2026
Product Name:The IUP Journal of Financial Risk Management
Product Type:Article
Product Code:IJFRM030326
DOI:10.71329/IUPJFRM/2026.23.1.33-54
Author Name:Shruti Sharma and Devinder Sharma
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:33-54
The paper explores the financial literacy gap and financial decision-making behavior of salaried women in Himachal Pradesh. The study is based on a quantitative research design using primary data collected through a structured questionnaire, and employs factor analysis and regression analysis to examine the relationship between financial literacy and financial decision making. Analysis of data gathered from 400 women in Una and Solan districts proves that income, education, and occupation have a significant relationship with financial literacy. Surprisingly, formal education achievement has an adverse relationship with measured financial literacy, which belies the notion that greater education leads to improved financial literacy and quality of decisions. The most significant deficits are in the most developed areas of investing, taxation and retirement planning, and there are a few structured educational programs aimed at women. The focus of policy and workplace initiatives should be on accessible practice-oriented programs on budgeting, investing, and tax planning. In general, the results indicate that specific financial education should be provided to facilitate informed decision-making and enhance financial health among salaried female residents in the state.
Financial literacy is central to effective financial judgment, especially among working women who are often constrained in terms of income and dependent on financial assistance. Strong personal financial literacy enhances saving, investment, and retirement plans in any environment (Lusardi & Mitchell, 2014), and provides individuals with the ability to make economic tradeoffs, filter credit and investment products, and seek financial security (Lusardi & Mitchell, 2011). A high gender gap in financial literacy is, however, limiting women in effective usage of financial instruments, financial planning and budgeting in India, which is acute in rural and semi-urban areas of Himachal Pradesh as access to financial education and services is skewed.