Financial literacy plays a pivotal role in shaping individual financial behaviors and ensuring economic resilience. This review investigates how financial literacy influences personal finance decisions—such as budgeting, saving, investing, and managing debt—particularly among diverse socio-economic groups in emerging economies. Using theoretical frameworks and empirical studies, the paper highlights the importance of financial education as a tool to bridge the knowledge-action gap and promote sustainable financial habits. The study also identifies challenges in implementing effective financial literacy programs and outlines future research directions to support policymaking and behavioral interventions aimed at enhancing financial well-being.