Financial Literacy, Financial Behavior, and Risk Tolerance: A Conceptual Review Based on Literature

Abstract

This study aims to analyze the relationship between financial literacy, financial behavior, financial education, and risk tolerance using a literature review approach. The study was conducted on a number of Google Scholar-indexed scientific articles published in the last five years. The results of the analysis show that financial literacy has a significant influence on financial behavior and the level of risk tolerance of individuals. Individuals with a high level of financial literacy tend to make more rational financial decisions, are able to manage risks wisely, and have more stable and sustainable economic welfare. In addition, demographic factors such as age, gender, education level, and financial experience were shown to moderate the relationship between research variables. Formal and informal financial education plays an important role in strengthening understanding, forming a positive attitude towards money management, and increasing people’s financial awareness. Overall, this study emphasizes that increasing financial literacy is a fundamental strategy to build healthy financial behavior, strengthen economic resilience, and encourage financial independence in the dynamic modern economic era.