A study of the impact of financial literacy in determining the outcome of individuals' financial well-being

Abstract

Financial well-being is still a relatively new term in academia. The present dissertation intends to explore the impact of financial literacy in the outcome of individuals financial well-being. Through a concise review of literature regarding financial well-being, financial health, financial literacy, and financial capabilities, the main drivers of financial well-being were formulated. The dissertation goal is to explore the relationship between financial well-being and financial literature, as well as to deliver an algorithm model that allows Doutor Finanças to cluster customers into different financial well-being profiles. To test the and build such hypothesis, a quantitative survey was designed to collect the relevant data regarding the determinants of financial well-being. As such, the survey collected data regarding the respondent9s financial situation, their financial behaviors, their financial literacy and knowledge, and their sociodemographic details. Based on 236 valid responses, a K-Means clustering model was applied to enable the creation of different groups of respondents with similar characteristics within each cluster group. Considering each cluster as a different financial well-being profile, it was then tested the impact of the financial literacy results in determining the financial well-being outcome of each respondent. The results of the study confirmed that the financial literacy of respondents significantly impacts the financial well-being outcomes.

Date of Award	1 Jul 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Rute Xavier (Supervisor)