June 8, 2012
Would you be surprised to learn that parents in many poorer countries often spend considerably more time talking with their children about money management than in wealthier countries like the United States? I was.
That's just one interesting nugget revealed at the sixth annual Financial Literacy and Education Summit recently hosted by the Federal Reserve Bank of Chicago and Visa Inc. Renowned U.S. and international financial experts tackled the theme, "International Solutions to Improving Financial Literacy," sharing successes and challenges faced in their own countries, as well as presenting new research that explores ways that financial knowledge and behavior can be improved.
Janet Bodner, editor of Kiplinger's Personal Finance, shared findings from the 2012 Global Financial Barometer, a new study cosponsored by Kiplinger's and Visa. Some global 25,500 participants were asked about their personal financial habits and opinions. Assessing that data, the Barometer ranked the financial literacy levels of people in 28 countries. Among the more interesting findings:
Bodner noted that these results add to our body of knowledge about financial literacy. "You first have to identify what the problems are in your particular country, city or school, and then determine what is effective in handling those situations," she said. A more detailed summary of the Barometer's key findings can be found at www.practicalmoneyskills.com/barometer.
William Walstad, an Economics professor at University of Nebraska-Lincoln, presented another interesting study which showed that people who scored poorly on a financial literacy test but were confident in their money-management abilities exhibited similar abilities to manage credit cards as did those with stronger test skills; while those who had high test scores but lacked confidence displayed much more negative credit behavior. Walstad said these findings suggest that building confidence has a strong role to play in financial education.
Bottom line: The panelists agreed that all of the countries represented share many of the same challenges for boosting financial literacy including gaining wide access for programs to be tested, evaluating their results, and the fact that each has very diverse populations with different needs at different periods in their lives.
To watch a free webcast of the Summit, visit www.practicalmoneyskills.com.
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