Portuguese Youth Saving Determinants of Financial Literacy

Abstract

his study aims to characterise the saving behaviour of Portuguese people, by analysing factors that influence financial decisions, such as the socio-economic and behavioural variables that determine saving and the impact of financial literacy on their willingness to save. We conclude that individuals with 31 or more years of age, with high levels of education, higher income, average financial knowledge and who get specialized information show a higher probability of saving. In terms of behaviour, those who consider the cost before making financial decisions and underconfident individuals, regardless of their risk appetite or aversion, also have a greater propensity to save. In contrast, for individuals in the 18 to 30 age range, everything else constant, there are no significant differences in youth attitudes toward saving. Young women tend to be more likely to save than young men. The estimated models also support the relevance of schooling to explain saving in this age group. The source of information on which the financial decision is based does not seem to be important to young people, but under- and overconfidence does have a marginal impact. Furthermore, low-income levels are a common obstacle to saving, both for young people and the general population