The research investigates how financial literacy affects household emergency savings maintenance when inflation rates are high. The study analyzes National Financial Capability Study data to determine if better financial knowledge leads to sufficient savings and evaluates if this protective effect remains stable when inflation reduces the value of money. The research fills an essential knowledge gap about how people maintain financial stability during times of economic hardship. The research provides evidence-based recommendations to policymakers and financial educators about how literacy protects family economic stability. The research helps consumer policy development by showing how financial capability acts as a protective measure against economic shocks which strengthens national financial stability.

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