Financial Literacy: What Decision-Makers Can No Longer Ignore

October marks World Savings Day, a date that, more than celebrating the act of saving money, should serve as a point of reflection on something structurally deeper: financial literacy.

In an increasingly complex economic and business environment, the difference between saving and understanding the value of money is, in many cases, the difference between sustainability and failure. Saving is important; understanding what you save, how it multiplies, and when to invest is essential.

According to the European Commission’s Eurobarometer (2023), only 18% of European Union citizens demonstrate a “high” level of financial literacy. In Portugal, that number drops to 11%, placing the country among the lowest levels in Europe, well behind Germany (27%) and the Netherlands (28%). Also, according to the Bank of Portugal, only 26% of Portuguese people can correctly answer three out of five basic questions about personal finance. This data reveals a systemic fragility that goes far beyond the individual domain: it exposes a collective limitation in the ability to read, interpret, and act strategically based on financial information.

These numbers are not just statistics. They are a mirror of how we think, decide, and manage, both in the personal and business spheres. Low financial literacy translates into ill-founded decisions, incoherent investment plans, and an inability to assess the risk and viability of projects. For companies, the impact is particularly evident: projects that fail not due to the idea, but due to financial execution; applications that fall through due to a lack of rigorous economic analysis; and credit negotiations compromised by the absence of a common financial language with banks and investors.

The lack of financial literacy therefore has direct and measurable consequences for the real economy. It translates into poor investment decisions, often based on perceptions rather than data; difficulties in attracting funding because decision-makers do not master the technical fundamentals; and uncontrolled indebtedness, resulting from a poor understanding of charges, interest, or deadlines. It is also responsible for poor tax choices that compromise the sustainability of companies, and for the inability to interpret financial contracts or risk clauses, which makes them vulnerable in negotiation and legal processes.

Ultimately, low financial literacy is not just a knowledge problem; it is a strategic risk factor. A risk that undermines the competitiveness of organizations and investor confidence, and that perpetuates dependence on external consultants without internal teams truly understanding the decisions being made.

For decades, financial literacy was neglected in the Portuguese educational and business systems. In schools, it was treated as a curiosity or a moral virtue. In companies, it was reduced to a technical competence restricted to financial and accounting departments. The result is a generation of decision-makers who do not master the essentials: reading a balance sheet, interpreting a cash flow, evaluating the profitability of an investment, or understanding the tax implications of a strategic decision.

At a time when artificial intelligence, data analysis, and financial digitalization are transforming business models, financial literacy becomes even more critical. The OECD report (2023) on digital financial literacy in Portugal warns of a new asymmetry: citizens and professionals are using digital financial tools, from banking apps to automated investment platforms, without fully understanding their operation, risks, and opportunities. In other words, we are more connected, but not necessarily more aware.

It is urgent to change this reality. Financial literacy is a leadership skill, and decision-makers who master the language of numbers are better prepared to anticipate trends, mitigate risks, and capitalize on opportunities.

Knowing how to interpret financial information means understanding the present and predicting the future, and those who don’t understand the numbers don’t understand their own business.

Change Requires Effort and Commitment

Promoting financial literacy is, today, a strategic and cultural imperative. It’s not just about training people and transforming mindsets. It involves equipping teams with analytical capacity, fostering critical reading of numbers, and integrating financial reasoning into all organizational decisions.

But this transformation doesn’t happen overnight.

It requires time, investment, and consistency.
It demands political will within companies, leadership commitment, and collaboration between departments.

It means moving from reacting to anticipating, replacing intuition with analysis, improvisation with strategy, and building sustainable visions supported by data and economic evidence.

Because in 2025, financial ignorance is no longer an excuse; it’s a choice. And those who choose to understand the numbers choose to lead their own future.

How to Intervene and Where to Start

Improving financial literacy in Portugal requires a coordinated approach that unites education, the business sector, and public policies.

Here are some concrete actions that can accelerate change:

Integrate financial literacy into formal and professional education at all levels – introduce practical modules on personal finance, investment, taxes, and economic planning from basic education to higher and technical education.

Create financial capacity-building programs in companies and public organizations – training and workshops focused on reading reports, cost analysis, budget planning, and risk management.

Promote partnerships between the financial, academic, and business sectors – joint mentoring and literacy projects where banks, universities, and companies develop content and decision simulators.

Develop accessible and digitally inclusive content – interactive platforms, podcasts, e-learning, and intuitive dashboards that transform financial concepts into practical decision-making tools.

Create a “National Corporate Financial Literacy Index” – annually measure, evaluate, and publish the financial maturity level of organizations to stimulate continuous improvement and reward best practices.

Foster a culture of transparency and financial accountability – the more companies share and explain their numbers, the greater the trust – internal and external – and the better prepared society will be to understand their economic impact.

Involve Parish Councils, local associations, and non-profit social solidarity institutions as community agents – local authorities, associations, and social sector institutions play an essential role in community-based financial education. Through open sessions, literacy programs, and partnerships with training entities, they can help bring financial knowledge to families, micro-enterprises, and local entrepreneurs.

These entities are often the first point of contact for citizens, and their actions can be crucial in creating more informed, autonomous, and economically sustainable communities.

Promoting financial literacy is investing in leadership, sustainability, and autonomy.

At Advanced Way, we believe that understanding the numbers is the first step to leading with strategy, consistency, and confidence. Count on our support!