SELF-CONTROL, FINANCIAL LITERACY AND CONSUMER OVER-INDEBTEDNESS

Abstract: Consumer over-indebtedness is a growing global concern, driven by impulsive spending behaviors, inadequate financial literacy, and easy access to credit. This study investigates the interplay between self-control, financial literacy, and consumer over-indebtedness to understand the behavioral and cognitive factors contributing to financial vulnerability. Using a qualitative approach, the research employs a case study design involving in-depth interviews with individuals experiencing significant debt burdens and participants of financial literacy programs. Data were analyzed thematically to identify patterns and relationships. The findings reveal that low self-control leads to impulsive borrowing and high reliance on costly credit products, while limited financial literacy exacerbates poor debt management decisions. Respondents with strong self-control but limited financial knowledge, and vice versa, faced challenges in achieving optimal financial outcomes. Behavioral interventions, such as budgeting, self-control training, and outcome elaboration prompts, emerged as effective tools to improve borrowing behavior and debt management. Socioeconomic factors, including income shocks and access to affordable credit, further influenced respondents’ financial resilience. The study recommends integrated financial education programs combined with behavioral strategies, regulatory frameworks for responsible lending, and financial safety nets to mitigate consumer over-indebtedness. These interventions can empower individuals to make informed financial decisions and build long-term financial resilience.

Keywords: Consumer debt, Financial literacy, Over-indebtedness, Self-control, Socioeconomic factors.