Effects of Financial Literacy On Financial Decision-Making and Household Wealth Creation

Isaac Bright  Hurson; Siaw Frimpong; Samuel Dorhetso; Emmanuel Yanney; Ruby Norkor  Noi

doi:10.47747/ijbme.v6i4.3063

Authors

Isaac Bright Hurson
Siaw Frimpong College of Distance Education, University of Cape Coast, Ghana
Samuel Dorhetso Accra Institute of Technology
Emmanuel Yanney Accra Institute of Technology (AIT), Ghana,
Ruby Norkor Noi Accra Institute of Technology (AIT), Ghana,

DOI:

https://doi.org/10.47747/ijbme.v6i4.3063

Keywords:

Financial Literacy, Household Wealth, Employees, Gender, Education Level.

Abstract

This study investigates the relationship between financial literacy and household wealth creation among employees in Ghana, focusing on how demographic factors such as age, education level, and gender moderate this relationship. Using primary data collected through a cross-sectional survey and analyzed through partial least squares structural equation modeling (PLS-SEM), the study tests two hypotheses related to financial literacy and its impact on household wealth. The findings indicate that financial literacy has a significant positive effect on household wealth creation, suggesting that an increase in financial literacy corresponds to an increase in household wealth. The study also finds that demographic factors, particularly age and education level, significantly moderate the relationship between financial literacy and household wealth. Gender, however, does not show a significant moderating effect. These results align with previous studies in developed economies, but offer new insights into the relevance of financial literacy in the context of a developing economy like Ghana. The study is underpinned by social exchange theory and contributes to the growing body of literature on financial literacy and wealth creation, with policy and practical implications for improving financial education and wealth management practices among employees in Ghana.

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