2025, Vol. 6, Special Issue 3

Financial literacy, the ability to understand and effectively use various financial skills, is essential for making informed decisions about saving, investing, and managing debt. The growing complexity of financial products and the increasing responsibility on individuals to manage their financial well-being have intensified the need for effective financial education. This paper explores the impact of education on financial literacy and how it enhances the application of smart money mechanisms such as budgeting, investing, credit management, and the use of financial technologies.

Through a review of existing literature and recent empirical studies, this paper highlights the positive correlation between financial education and improved financial behaviours. Educational interventions, particularly those integrated into school curricula and adult learning programs, significantly boost individuals' understanding of financial concepts, fostering prudent financial decision-making. Moreover, the adoption of smart money mechanisms is closely linked to the level of financial literacy attained. Educated individuals are more likely to utilize budgeting tools, make informed investment choices, manage credit efficiently, and leverage financial technologies like mobile banking and automated savings apps.

The paper also discusses the challenges in achieving widespread financial literacy, such as socio-economic disparities, limited access to education, and the rapid evolution of financial technologies. Addressing these challenges through targeted educational programs and policy interventions is critical for enhancing financial inclusion and economic stability. In conclusion, strengthening financial education is a vital strategy for empowering individuals with the knowledge and skills necessary to apply smart money mechanisms effectively, thereby improving their financial well-being and contributing to overall economic resilience.