Publication Date

Spring 5-8-2026

School

School of Business

Major

Accounting

Keywords

Financial literacy, tax knowledge, consumer behavior, retirement plans, financial education

Disciplines

Accounting | Finance and Financial Management

Abstract

This literature review examines the impact of financial literacy on tax knowledge among college students, emphasizing how limited financial education contributes to broader financial instability. Research consistently shows that young adults from ages eighteen to twenty-five possess low levels of financial literacy, which leads to poor budgeting, inadequate retirement planning, risky consumer behavior, and increased financial stress as they transition into adulthood. Studies involving national financial literacy assessments, workplace performance data, and college-level surveys highlight the long-term consequences of insufficient financial education, especially for vulnerable demographic groups. Notably, the review identifies a strong connection between financial literacy and overall financial decision-making: students with greater financial knowledge demonstrate a better understanding of budgeting, credit use, debt management, and other essential financial responsibilities. Evidence shows that educational interventions significantly improve financial behaviors and confidence in managing personal finances, whereas limited financial literacy exposes students to financial mistakes, increased stress, and uncertainty when navigating complex financial systems. Overall, this review seeks to answer an overarching question: What is the impact of financial literacy on young adults? The review emphasizes the necessity of integrating comprehensive financial and tax education into academic curriculum to prepare students for responsible financial decision-making and long-term economic well-being, as well as discusses major themes such as financial behavior, retirement planning, consumer behavior, tax literacy, and financial education interventions.

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