Generational Perspective of Financial Literacy and Consumer Over-Indebtedness. Survey Evidence from Poland

Background and purpose of the article: The main aim of the article is to present financial literacy (FL) and consumer over-indebtedness (OI) according to the primary survey in Poland. The auxiliary aim is to analyse the importance of financial literacy in reducing consumer over-indebtedness from a generational perspective. Over-indebtedness is a significant problem in personal finance because it leads to a situation in which household members cannot settle their financial obligations on time, negatively affecting their economic stability and prospects for long-term financial security (D’Alessio, Iezzi, 2013). It is becoming increasingly common in the country and around the world. It has a negative impact on consumers and the economy. Methods: The author conducted primary research using a survey questionnaire. The survey was conducted in Poland in 2022 on 1051 consumers. The analysis of survey data was conducted using the PLS-SEM method. Results and added value: The research results indicate that financial literacy as an independent factor alone does not play a significant role in reducing consumer over-indebtedness, but that analyses in combination with other variables shows that analysis is more effective when financial literacy is not isolated. The most sensitive group in the financial literacy and over-indebtedness study is Generation Z (GenZ), which has the lowest level of financial literacy while at the same time has the lowest financial reserves and savings, thus constituting the most exposed group to the risk of over-indebtedness. The added value could be the author’s proposition of the Financial Literacy Index (WF1), which is compared to the worldwide Financial Literacy Big Five Index (BIG 5), introduced by Lusardi (Stanford University) and Michell (Wharton University) (Lusardi, Michell, 2014).