FACTORS INFLUENCING INDIVIDUAL FINANCIAL DECISIONS: A LITERATURE REVIEW

Personal finance and financial education represent important topics, which gain more and more local attention. This attention needs to be placed in the context of the state-of-the-art research, from which future local research can emerge. Financial decision making in the case of individuals and households is a complex process, with many influencing factors. There are vast amounts of research literature exploring various aspects of this issue, with varying degrees of detail and specialization. In this paper I attempt to provide a selective and structured review of (recent) research in the field. Starting from asking what are the main factors that influence financial decision for individuals or households, I subsequently catalogue and discuss some of the most relevant aspects revealed by the literature. Many of the analyzed influence factors have a regional dimension and this paper aims to reveal existing gaps in local research.