The financial literacy of individuals declared insolvent in the courts in Portugal in 2020

Isabel Oliveira (), Jorge Figueiredo, António Cardoso and Margarida Pocinho
Additional contact information
Isabel Oliveira: Lusiada University
Jorge Figueiredo: Lusiada University
António Cardoso: University Fernando Pessoa
Margarida Pocinho: Coimbra School of Health Technology

International Review of Economics, 2023, vol. 70, issue 1, No 2, 26 pages

Abstract: Abstract Today’s society is characterized by the globalization of financial markets with the growing supply and complexity of financial services and by the social changes associated with the evolution of marketing that stimulates consumption. In this scenario, the consumer adheres to a multitude of financial modalities, often without a knowledge of their effects and consequences. Thus, financial literacy today assumes a central and preponderant role in the life of any individual, with consequences not only at the individual level, but also at the level of society, the economy and the financial system. The objective of this study is to analyze the degree of financial literacy of families declared insolvent in the judicial courts of Portugal in 2020 and to know the factors that contributed to this situation. A Similar analysis was never performed. The results indicate that the interviewees affirm that it is important to control the family budget, but they do not present behaviors that corroborate this affirmation. In general terms, they reveal a low degree of financial literacy, which explains the insolvency of the respondents. The main factor that contributed to insolvency was incurring expenses without considering whether they had the financial capacity. The results suggest that public authorities should take measures for the financial literacy of the population, particularly among young people, to reduce the harmful consequences of insolvency.

Keywords: Financial literacy; Family budget; Savings; Financial products (search for similar items in EconPapers)
JEL-codes: G50 G51 G53 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s12232-022-00407-2

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