Financial awareness and understanding about the financial concepts and procedures as well as the use of this understanding to solve financial problems. It encompasses conceptual financial knowledge, procedural financial knowledge and applied financial knowledge.
Published in Chapter:
Financial Literacy: Gaps Found Between Mexican Public and Private, Middle, and High-School Students
Adriana Berenice Valencia Álvarez (Tecnologico de Monterrey, Mexico) and Jaime Ricardo Valenzuela González (Tecnologico de Monterrey, Mexico)
Copyright: © 2017|Pages: 27
DOI: 10.4018/978-1-5225-2026-9.ch005
Abstract
Financial literacy is a combination of financial knowledge, attitudes and behaviors, key for making informed decisions and for solving financial problems. This descriptive study explored the applied, conceptual and procedural financial knowledge of 243 Mexican students via three financial knowledge tests. In addition, these students were surveyed about their financial behavior, their attitudes towards money, and their experience with money using a self-report questionnaire. The study aims to identify financial-education needs and gaps between school levels and systems. Therefore, the analysis focuses on the differences and similarities between two subgroups: (1) students in public and in private education, and between (2) middle school (ages 12 to 15) and high school students (ages 15 to 18). Middle school and high school students differed significantly only in their conceptual knowledge and in their financial experience, while public and private students showed statistical significant differences on their financial knowledge, behavior, attitudes and experience.
FAQs
Financial knowledge is the objective mastery of financial definitions, terms and concepts. Financial skills determine whether an individual can make decisions with that knowledge. For example, a person might know that a credit score of 800 is good, but not know the steps to improve their own credit rating.
What are some financial knowledge? ›
Key aspects of financial literacy include knowing how to create a budget, plan for retirement, manage debt, and track personal spending. Financial literacy can be obtained through reading books, listening to podcasts, subscribing to financial content, or talking to a financial professional.
How important is financial knowledge? ›
Strong financial knowledge and decision-making skills help people weigh options and make informed choices for their financial situations, such as deciding how and when to save and spend, comparing costs before a big purchase, and planning for retirement or other long-term savings.
How much of the world is financially literate? ›
Based on this definition, 33 percent of adults worldwide are financially literate.
How do you develop financial knowledge? ›
6 ways to improve your financial literacy
- Subscribe to financial newsletters. For free financial news in your inbox, try subscribing to financial newsletters from trusted sources. ...
- Listen to financial podcasts. ...
- Read personal finance books. ...
- Use social media. ...
- Keep a budget. ...
- Talk to a financial professional.
Financial means relating to or involving money. The company is in financial difficulties. Synonyms: economic, business, money, budgeting More Synonyms of financial.
What is the most important financial information? ›
Typically considered the most important of the financial statements, an income statement shows how much money a company made and spent over a specific period of time.
Why is knowledge more important than money? ›
Answer and Explanation: Knowledge is much more important than money because, without knowledge, we cannot decide how to utilize money wisely. Even if we have a huge amount of money without the knowledge of what to do with it, it is no use or value.
What is financial literacy in simple terms? ›
Financial literacy refers to the ability to understand and apply different financial skills effectively, including personal financial management, budgeting, and saving.
What is the basic definition of financial literacy? ›
What Is Financial Literacy? Financial literacy refers to the ability to understand and apply different financial skills effectively, including personal financial management, budgeting, and saving. Financial literacy makes individuals become self-sufficient, so that financial stability can be accomplished.
It is a broader term that includes various aspects of financial understanding and competence. On the other hand, financial knowledge refers specifically to a person's comprehension or familiarity with financial topics. It is a component of financial literacy but does not encompass all the other aspects.
What is financial literacy in terms of financial knowledge? ›
Financial literacy is the ability to understand and make use of a variety of financial skills, including personal financial management, budgeting, and investing.
What is the meaning of financial intelligent? ›
Financial intelligence commonly refers to the ability of executives' and employees' to understand and execute on accounting principles. Under this notion, executives and employees who are not formally educated in finance or accounting still need to understand basic finance principles.
