Sustainable Households Financial Behaviour in EU and Implications on Developing Financial Literacy

Avoiding financial problems and good management of one's income and assets is connected to people's well-being, accumulation of capital in the economy and is essential element for stability and sustainable growth. The paper focuses on the relations between financial literacy of the population and the key indicators used by Eurostat to assess the financial status and sustainable behaviour of the households in European Union, linked to savings, investment, indebtedness, and wealth. Partial correlation coefficients and multiple regression models were used to control for the influence of countries' geographical position and economic development. The results showed that financial literacy score was related to the Gross household saving rate and Household net financial assets ratio, while its connection with Gross investment rate of households, Households investment to Gross Domestic Product ratio and Gross debt-to-income ratio of households remained insignificant. In two models with significant financial literacy effect the division of the countries on the West-East axis was also crucial factor. Both further analysis in this area and policy making at European Union level focused on sustainable development, would benefit a lot if Eurostat starts collecting panel data about member states' financial education status.