Financial literacy is the knowledge and skill a person needs to manage money well: making a budget, saving, borrowing sensibly, comparing financial products and understanding risk. Its purpose is to help people take informed financial decisions.

A financially literate person tracks income and spending, controls unnecessary purchases and plans payments in advance. Such better regulation of one's own money cuts wasteful expenses, which is the direct benefit named in the question.

Huge financial stress and anxiety is the result of poor money management, not of literacy. A fall in sound decision-making while choosing insurance, loans, investments and credit cards is the opposite of what financial literacy produces, since it improves such choices. Ineffective creation of a structured budget is likewise a sign of low financial literacy.

Reduction in expenses through better regulation option is correct.