According to Annamaria Lusadi, academic director at the Global Financial Literacy Excellence Center, financial literacy requires both a knowledge of financial concepts and the confidence to make effective financial decisions in order to maximise one's well-being.

Financial literacy is not only limited to knowledge of monetary calculations, but is also measured by the extent to which individuals understand their financial rights and obligations, in addition to their ability to educate themselves on financial matters.

People are increasingly expected to have the appropriate skills to manage their own financial decisions; however, the rapidly shifting financial environment often proves to be extremely complex to understand and, thus, leaves many with poor financial literacy abilities. The young, the elderly, women, and people with low-education levels are particularly susceptible to the negatives effects of low financial literacy. The consequences of the situation are harmful both for the individual and at a national level.

Just as reading and writing skills are a part of the educational curriculum, Annamaria Lusadi believes that financial literacy courses should now be a requisite part of school programmes. Moreover, the adult population should also have access to workplace and public financial education programmes. All in all, good financial literacy skills have long-term beneficial effects; sound financial decisions take today's resources and invest them in the future. As a result, policy-makers should redouble their efforts in this area.

Maria Demertzis has co-authored a Bruegel Policy Contribution with Uuriintuya Batsaikhan on [financial literacy and inclusive growth in the European Union](http://bruegel.org/2018/05/financial-literacy-and-inclusive-growth-in-the-european-union/).

Annamaria Lusardi previously made a presentation at the Bruegel event, ‘[The importance of being financially literate](http://bruegel.org/events/the-importance-of-being-financially-literate/)’.