All The Resources
 
Logo   About The Key
Burger Close Menu Logo Search Close Menu
Financial Literacy Icon
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.
Copy text
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).
Copy text
Make the case
  • Higher educational attainment is associated with increased financial literacy. Women with less education displayed disproportionately lower levels of financial knowledge in all stages of life, from youth to old age
    Hasler & Lusardi, 2017  GFLEC Testimonies, 2013
  • Citizens who are financially literate are more empowered to make wise economic choices People with financial literacy are more likely to plan for their retirement, and avoid risky financial behaviours such as carrying high-interest debt or entering into unfavourable loan agreements
    Lusardi & Wallace, 2013
  • 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. 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).
  • Financial literacy is a necessary skill for today’s youth to successfully analyse, reason, and navigate the complexities of the world. Acknowledging its importance, financial literacy has been added to the topics now evaluated through the Programme for International Student Assessment (PISA) examination, alongside maths, science, and reading
    (GFLEC Testimonies, 2013).
  • 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 10 15-year-olds across participating OECD countries are able to solve difficult financial tasks
    (GFLEC, 2015).
Copy text
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.
Copy text
Share This Resource
Similar Themes
Equity Icon
Make the case
Education and
Equity
See more
Poverty Icon
Make the case
Education and
Poverty
See more
Social Mobility Icon
Make the case
Education and
Social Mobility
See more
Stay updated
By choosing yes, you’re agreeing to receive email updates from Theirworld about this and other campaigns (from which you can unsubscribe at any time). By signing you’re agreeing to our privacy policy.By choosing yes, you’re agreeing to receive
email updates from Theirworld about this
and other campaigns (from which you can
unsubscribe at any time). By signing you’re
agreeing to our privacy policy.