Understanding the Meaning of Financial Literacy in Household Economic Decision-Making: A Phenomenological Study

Abstract

Financial literacy is a critical determinant of household economic well-being, yet its phenomenological meaning in everyday decision-making contexts remains underexplored, particularly in developing economies. This systematic review investigates how financial literacy influences household economic decision-making through a phenomenological lens, synthesizing 50 peer-reviewed studies published between 2018 and 2025. Using a PRISMA-guided search across Consensus, Semantic Scholar, and PubMed spanning over 170 million research papers this study identifies four central themes: market participation, debt risk management, socio-cultural mediation, and digital literacy as an amplifier of financial capability. Findings reveal that households with higher financial literacy demonstrate significantly better investment behaviour, more prudent debt management, and greater long-term financial planning capacity. A notable research gap exists in rural and low-education contexts, where literacy benefits are constrained by structural barriers. Comparative analysis of domestic (Indonesian) and international studies indicates convergent outcomes regarding market participation, yet divergent pathways shaped by socio-cultural norms and fintech penetration. The study offers theoretical and practical implications for policymakers, financial educators, and household welfare programmes. Novelty lies in the phenomenological framework adopted to reconcile subjective meaning-making processes with quantitative evidence on financial literacy outcomes.