Economic Growth

Money matters: Your guide to financial literacy

Financial literacy rates must improve around the world.

Financial literacy rates must improve around the world. Image: Desola Lanre-Ologun/Unsplash

Meagan Andrews
Lead, Capital Markets Initiatives, World Economic Forum
Haleh Nazeri
Lead, Longevity Economy, World Economic Forum
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Financial and Monetary Systems

  • April 2024 was National Financial Literacy month in the US, but adult financial literacy rates in the country have hovered around the 50% mark for the past eight years.
  • This round-up of articles looks at the challenges and solutions of improving financial literacy rates around the world.
  • The World Economic Forum’s Financial Literacy Initiative aims to increase access to financial education and investing practices.

The world of finance can be a complex place, but it’s important to develop a basic understanding of the influential role money plays in our work, social life, health, education and everything in between.

From the influence of technology in driving financial inclusion to efforts to close the gender wealth gap, we go behind the scenes to keep you in the loop.

Here are the must-read financial literacy articles and videos from April – National Financial Literacy month in the US – on Agenda.

Have you read?

Operation HOPE, tech and financial education

Technology is providing a gateway for historically excluded people to manage their own financial future.

With inclusion in financial services at an all-time high, technology can facilitate widespread education, accessibility and affordability that were previously reserved for a wealthy few, opening doors and breaking down barriers worldwide.

Read more from the chairman and CEO of Operation HOPE, the US’s largest financial literacy organization: Inclusion in US financial services is at an all-time high – and tech can take us further

Longevity and financial literacy

Boosting women’s financial literacy helps increase their financial freedom and security in retirement.

A policy push to boost access to financial education, alongside industry investment in services and economic opportunities specifically for women, could help relieve deep systemic inequalities such as the gender wealth gap.

Financial literacy gap

Worldwide, 35% of men are financially literate compared with 30% of women. It may not sound like much of a difference, but this gap is significant globally, exists in both developed and developing economies and doesn’t look like closing any time soon.

There are some solutions that can help. Watch the video below for three ways to improve financial literacy among women.

Action on financial literacy

Americans generally perform poorly on understanding key financial concepts; this deficiency in financial knowledge extends globally, affecting economic and personal outcomes.

The consequences of low financial knowledge are costly and sweeping, yet the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index), released on 17 April 2024, gives Americans a failing grade when it comes to understanding the concepts that underpin decisions about saving for retirement, managing debt or insuring against risks.

Young people and investing

Young people are actively investing in capital markets, with 70% of retail investors under the age of 45. However, young people globally have financial literacy rates that hover below 50%.

Boosting financial literacy can help empower young people to invest with higher returns, avoid high levels of debt and increase their overall financial well-being.

Discover

How is the World Economic Forum improving the global financial system?

Misunderstanding risk and why it matters

Around half of US adults were unable to answer three financial literacy questions posed by the recent P-Fin Index survey. Risk proved the least understood aspect of finance.

How do you think you would fare? Watch the video below to test your financial knowhow and see what can be done to improve our understanding of financial matters.

A question of finance

US financial literacy rates have been stubbornly hovering around the 50% mark for eight consecutive years, with a 2% drop in the past two years, according to the latest P-Fin Index.

Financial (il)literacy is holding steady: 2017-2024
Around half of US adults are financially illiterate, an annual survey shows. Image: WEF

In the European Union, a quarter of respondents scored low for knowledge in the 2023 Eurobarometer survey on financial literacy, with 18% at a low level of financial literacy.

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World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

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