“To me, it speaks to the fact that financial literacy is a global problem. Financial markets are more complex around the world and the population is not keeping up with the changes.”
Annamaria Lusardi, academic director of the Global Financial Literacy Excellence Center at The George Washington University. Lusardi was discussing the latest global survey on financial literacy with Carolyn Bigda in the Chicago Tribune (“Survey shows adults struggle with financial literacy,” December 7, 2015).
The new global survey of more than 150,000 adults in 144 countries found that many people across the globe struggle to understand basic money concepts.
People in the U.S. are no exception. Only 57 percent of adults scored a passing grade on the four-question test.
“In the U.S., interest was the least understood topic, with 40 percent of adults answering the related question incorrectly, even though the country has some of the highest credit card usage and student loan debt in the world,” wrote Bigda.
The bottom line? When it comes to your personal financial decisions, what you don’t know can hurt you. Making bad choices can have a serious impact on your financial future.
Want to test your personal finance savvy? Take the survey at finlit.mhfi.com and see how well you understand basic financial concepts like risk and diversification, inflation, interest and compound interest.