INFLUENCE OF THE LEVEL OF FINANCIAL KNOWLEDGE ON PERSONAL PLANNING AND DEBT

Abstract

This study analyzed the influence of planning and financial knowledge on people's debt choices. Questionnaires were applied to collect data on socioeconomic, knowledge, and behavioral variables of 115 individuals. Descriptive statistics were performed to compare results with recent empirical evidence in the literature. The results showed that people discern the importance of basic financial knowledge, as the lack of knowledge has affected their financial decisions. There is a moderate influence of financial knowledge on the choice of debt since 39% of the respondents understand that their debt has a direct influence from their lower level of financial knowledge. Although 82% of respondents considered financial planning important, 63% indicated carrying out some planning. Almost half of the people (51%) understand that knowledge of finance affects financial decisions. The study showed a positive relationship between planning, financial knowledge, and better debt choice.