Impact of Financial Literacy on Household Saving: Evidence from Hungary and Portugal

With economic globalization, the management of personal assets has become increasingly important, and rational saving behavior is also a crucial skill. Financial literacy is globally endorsed for enhancing economic resilience, the problem is that its impact on saving behavior remains context-dependent. This study investigates the relationship between financial literacy and household saving rate. This paper also explores whether higher financial literacy translates into higher personal saving rates across different national contexts. Using discontinuous time-series data for financial literacy scores, by constructing simple linear regression models for a comparative analysis between two distinct economies. The findings of this paper reveal a significant positive correlation in Portugal, whereas the relationship is statistically insignificant and highly unstable in Hungary, indicating that macroeconomic and institutional settings profoundly mediate this link. This research provides empirical support for tailoring financial education programs and informs policymakers on designing context-specific strategies to enhance public financial preparedness and protect household assets.