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Education and

Financial Literacy

Key message

Education empowers individuals to make sound economic choices and expand opportunity for themselves and their families.


Financial literacy is associated with increased wages, education spending, savings, and entrepreneurship. Formal schooling is an effective approach to deliver and develop the financial literacy skills required to address complex challenges. Moreover, financial literacy helps to guard those most vulnerable from fraud and exploitation.
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Key challenges
  • Teachers need support to teach financial literacy. In the US, less than one-fifth of teachers were prepared to teach any of the six personal finance concepts normally included in financial education courses.
    (GFLEC Testimonies, 2013)
  • Financial literacy and related concepts are not often taught in schools 56% of students in general education and 62% of those in vocational education reported never learning about compound interest at school across those countries participating in the Programme for International Student Assessment.
    (OECD, 2020)
  • Women with lower levels of formal education are significantly more likely to be unbanked. In sub-Saharan Africa, 74% of the unbanked have low education.
    (Ansar et al, 2023)
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  • Higher educational attainment is associated with increased financial literacy. Studies have shown that people with a higher level of education are more likely to save and invest, leading to higher financial market participation and lower probabilities of bankruptcy.
    (Ansar et al, 2023)
  • Financial literacy helps households make the most out of remittances. Remittances raised spending on education over 50% in Latin America and over 35% in Africa and Asia.
    (GEM, 2019)
  • Financial literacy helps individuals and families save money and plan for the future. Migrants who received financial training were more inclined to create a budget and had double the savings of those who did not participate in the training.
    (World Bank, 2017)
  • Financial education safeguards vulnerable populations from exploitation. A financially literate migrant or refugee is less likely to be taken advantage of through scams or exorbitant fees.
    (GEM, 2019)
  • Formal schooling is a practical pathway to developing financial literacy. Just one in three adults have a basic understanding of financial concepts, and only a fraction of young people have access to financially literate parents or adults to learn from.
    (Hasler & Lusardi, 2017)  (GFLEC Testimonies, 2013)
  • Financial literacy raises earnings. Women with high financial literacy skills received 95% more income than women with little or no literacy skills.
    (EFA GEM, 2014)
  • Education increases entrepreneurship and economic opportunity. A sound understanding of financial mechanisms, management, and concepts like interest compounding, exchange rates and fee structures diversify and boost economic opportunity.
    (Atkinson & Messy, 2015)
  • Learning traditional numeracy skills is a direct bridge to financial literacy with real world impact. In Somalia, teachers worked to address specific skills gaps by connecting numeracy to financial literacy and business development in primary school lessons.
    (CARE International, 2016)
  • Financial literacy is important in rich and poor countries. Just over one in ten 15-year-olds across participating OECD countries are able to solve difficult financial tasks.
    (GFLEC, 2015)
  • Financial literacy improves health outcomes for young people. When combined with sexual and reproductive health education, financial education was found to have a positive effect on HIV knowledge and attitudes and risk taking behaviour in a systematic review of youth in low- and middle-income countries.
    (Lee et al., 2020)
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Key talking points
  • Education helps young people learn basic skills to participate in the economy, including basic financial literacy.
  • Financial literacy is associated with higher wages, savings and protection from fraud and exploitation.
  • Ensuring young people are enrolled in schools is a practical pathway to develop financial literacy.
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