Financial literacy
Financial literacy is the possession of skills, knowledge, and behaviors that allow an individual to make informed decisions regarding money.
[7] There is a diversity of definitions used by bodies such as NGOs and think tanks, but in its broadest sense, financial literacy is an understanding of money.
[16] Objectively measured literacy is mainly about the numerical understanding of concepts such as compound interest, portfolio investment, diversification benefits, and the impact of inflation on financial decisions.
Objective financial literacy has been measured with five 5-item tests, which include questions related to interest rates, saving accounts, and inflation.
[35][36] According to the 2014 Asian Development Bank survey, more Mongolians have expanded their financial options, and for instance now compare the interest rates of loans and savings services through the successful launch of the TV drama with a focus on the fiscal literacy of poor and non-poor vulnerable households.
[37] A survey of women consumers across Asia Pacific Middle East Africa (APMEA) comprises basic money management, financial planning and investment.
The top ten of APMEA Women MasterCard's Financial Literacy Index are Thailand 73.9, New Zealand 71.3, Australia 70.2, Vietnam 70.1, Singapore 69.4, Taiwan 68.7, Philippines 68.2, Hong Kong 68.0, Indonesia 66.5 and Malaysia 66.0.
The Australian Government also runs a range of programs (such as Money Management) to improve the financial literacy of its Indigenous population, particularly those living in remote communities.
[42] The topics NCFE covers in its awareness programs include investments, types of bank accounts, services offered by banks, Aadhaar cards, demat accounts, pan cards, power of compounding, digital payments, protection against financial frauds etc.
[45] A nationwide survey was conducted by SEDCO Holding in Saudi Arabia in 2012 to understand the youth's financial literacy level.
In Singapore, the National Institute of Education Singapore established the inaugural Financial Literacy Hub for Teachers[47] in 2007 to empower school teachers to infuse financial literacy into core curriculum subjects to embed pedagogically sound activities to engage students in learning.
Such day-to-day relevant and authentic illustrations enhance the experiential learning to build financial capability in youth.
South Korea is recognized as one of the top 10 global economies, yet there are varying levels of financial literacy among its citizens.
According to a 2021 survey conducted by the Ministry of Economy and Finance, the average financial literacy score in South Korea was 56.3 out of 100.
[51] In 2016, France introduced a national economic, budgetary and financial education (EDUFI) strategy based on OECD principles.
[53] The Banque de France conducts periodic surveys on the level of understanding, attitudes and behaviour of the French population regarding budgetary and financial matters.
The Banque de France funds it in cooperation with several partners, including the Ministry for Education, the Institut pour l'Éducation Financière du Public (IEFP – Institute for Public Financial Education) and the Bibliothèque Nationale de France.
[57] The Swiss National Bank aims at improving financial literacy through its initiative Iconomix which targets upper secondary school students.
The report identified four themes: "In short, unless steps are taken to improve levels of financial capability, we are storing up trouble for the future.
"[59] Numerous charities in the United Kingdom also work to improve financial literacy, such as MyBank, Citizens Advice Bureau, and the Personal Finance Education Group.
Financial literacy within the UK's armed forces is provided through the MoneyForce program, run by the Royal British Legion in association with the Ministry of Defence and the Money Advice Service.
[60] In 2006, Canadian securities regulators commissioned two national investor surveys[61][62] to gauge people's knowledge and experience with investments and fraud.
The results from both studies demonstrated that there is a need to better to educate and inform investors about capital markets and investment fraud.
Among other things, the report identified that investors approaching retirement without adequate resources and affluent middle-aged men were vulnerable to investment fraud.
Canada has also established a government entity to "promotes financial education and raises consumers' awareness of their rights and responsibilities".
The 2017 survey found that Utah had the highest state requirement in the nation, while in Alaska, Delaware, Washington, District of Columbia, Hawaii, Rhode Island and South Dakota, students are entirely dependent on the initiative of their local school board.
