Financial Literacy is knowledge and understanding of financial concepts and risks and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life.
This definition is provided by the OCSE-PISA 2012 Financial Literacy Framework, which conducted a comprehensive study on the financial literacy of young people. Annamaria Lusardi, one of the authors of the framework, further elaborates on this definition in the Rational Reminder Podcast episode 232.
I find this definition to be incredibly inspiring, and I wholeheartedly agree with the significance of financial education. I believe that raising awareness about one’s level of financial knowledge is a crucial step towards improving financial literacy.
In order to facilitate self-assessment and encourage individuals to gauge their financial literacy, I have developed a financial literacy quiz. The quiz is divided into separate modules, and after completing each module, participants are encouraged to check their scores before proceeding to the next one.
Financial Literacy Survey Module
This module consists of straightforward questions that should not be overanalyzed.
Financial Instruments Module
This module digs deeper into financial literacy concepts and aims at evaluating the knowledge of the most common financial instruments.
Additional Resources
Resources on financial literacy: