Abstract:

Over the past few years there has been an increasing interest in the field of financial literacy – what people know about financial matters, how they deal with their money and which financial decisions they make. Research all over the world has shown that the level of financial literacy is low among a large proportion of the population. Especially young people as well as people over 60 years of age seem to be significantly less financially literate. In many studies, women have been identified as a vulnerable group because they score significantly lower than men. Research findings also indicate that financial literacy scores are dependent on the level of education as well as on other sociodemographic variables. It is the aim of this contribution to analyze how financial literacy has usually been measured and how well these measurements reflect the abilities to deal competently with money and financial matters. This analysis takes into account that different groups of a population might need very different abilities in order to manage their finances. It also explores evaluation studies on a wide range of teaching methods and innovative teaching designs that aim at enhancing financial literacy and supporting people to manage their financial matters effectively. The paper is concluded by a discussion on effective measures to enhance people’s understanding of financial matters and their effective decision making.

Keywords:

Financial literacy, financial education.