Financial illiteracy is the lack of an ability to efficiently handle personal finance matters involving budgeting, saving, investing, and more. Surveys run by government agencies and financial education programs expose the lack of financial knowledge among both Americans and individuals globally. Financial competency is a basic requirement to lead a healthy financial life. Individuals afflicted by financial illiteracy are simply not able to discern between different financial choices and are often unable to reach their financial goals.
The overarching purpose of financial education is not to transfer knowledge from educator to learner. Rather, the end goal of financial literacy initiatives is to elicit positive financial behavioral change by equipping program participants with the critical thinking framework they need to properly assess financial decisions in their lives.
Plenty of research papers have corroborated that financial literacy, when properly administered by a qualified financial educator, has the ability to make real improvements in the financial health of learners.
The Federal Reserve bank of Philadelphia found that counseling delivered via technology was actually better at molding consumer behavior than face-to-face counseling. Programs that are limited on funds can use technology as a means to reach more people with the same level of efficacy and with lower expenses (Federal Reserve Bank of Philadelphia).
57% of millennials have either an advisor or robo advisor (MoneyConfidentKids.com). http://www.moneyconfidentkids.com/content/dam/money-confident-kids/PDFs/PKM-Surveys/2017_PKM_Results.pdf
Financial illiteracy has become a point of concern for communities and governments worried about the effects such a critical lack of knowledge can have on the lives of individuals. Limited access to financial literacy classes and education leave people woefully unprepared. Equipped with only a partial and inadequate framework for thinking about financial decisions, too many individuals submit to making poor financial choices with long-term consequences that are difficult – if not impossible – to correct. Preventing and mitigating financial illiteracy requires the continued efforts of employers, governments, and the financial education industry. National Financial Educators Council, “Financial Illiteracy in America”