Financial literacy is knowledge that allows individuals to make informed financial decisions, large or small, and grow, protect, and enjoy their savings. While financial inclusion seeks to connect individuals with financial tools or funding, financial literacy focuses on teaching people how to employ them. The content and structure of the curriculum depends largely on the age demographic being taught and the community’s level of development. For instance, in some less-developed countries, financial literacy training places a high emphasis on teaching people the value of depositing money in a bank and how to use financial products like a savings or checking account. Financial literacy also includes financial confidence: empowering individuals to know their rights as consumers and to have the attitude as well as the skills to confidently exercise those rights.
Many financial literacy projects are designed for:
- Children and youth, often through school or after-school programs
- High school and university students
- Adults
- Veterans
Why does business engage this issue?
Informed consumers make for a stronger community. Financial literacy training is a win-win for the individual and the community in which he or she resides. The primary benefit is for the people who undergo financial literacy training, and who leave the training better prepared to manage their own resources. But the community benefits as well, because individuals who make smarter investments for themselves also contribute to the prosperity of the community at large.
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