Open Access
ARTICLE
Financial Literacy and Behavioral Economics: Investigating Investment Decision Patterns Among Young Adults
Issue Vol. 1 No. 01 (2025): Volume 01 , Issue 01 Oct 2025 --- Section Articles --- Published Date: 2025-10-01
Abstract
In the contemporary financial environment, young adults face increasing pressure to make informed investment decisions despite limited experience, rising economic uncertainty, and overwhelming access to financial products. This research analyzes how financial literacy, behavioral biases, cognitive limitations, and socio-economic influences shape the investment patterns of young adults aged 18–35. By employing a mixed-method approach including surveys, behavioral assessment tools, and case analysis, the study identifies critical gaps in financial knowledge, risk perception, savings behavior, and portfolio diversification habits. Findings indicate that young investors often rely on heuristics, social influence, digital cues, and emotional decision-making rather than rational, information-driven choices. Low financial literacy intensifies susceptibility to biases such as overconfidence, loss aversion, herd behavior, present bias, and mental accounting. The research emphasizes the need for targeted educational interventions, digital financial tools, and behaviorally informed policies to improve investment competencies among young adults and promote sustainable long-term financial well-being.
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