Many young adults aspire to achieve full financial autonomy as one of the crucial steps in their journey to adulthood. However, receiving a monthly salary or being paid for delivering a service for the community or another private body does not necessarily mean possessing all the necessary financial skills needed to become self-sufficient and achieve financial security.
Through the various school programmes and subjects that help to develop numeracy skills and then financial literary among youngsters all over the world, non-formal and informal education are important for enhancing the ability to understand and effectively apply various financial skills, including personal financial management, budgeting, and investing. If you have ever played Monopoly, for example, or if you have ever received regular pocket money from your parents, then you have learnt a fundamental informal lesson in how to value and invest money.
Despite the numerous existing forms of financial education, the results of the OECD/INFE 2020 International Survey of Adult Financial Literacy (OECD 2020) “confirm that financial literacy levels are low across participating economies. Individuals across the entire sample on average scored only 12.7 or just under 61% of the maximum financial literacy score. The average across participating OECD member countries is only marginally higher at 13.0 (62% of the maximum).” Moreover, with reference to “Financial Knowledge” (one of three aspects investigated by the survey together with Financial Behaviour and Financial Attitude), the report evidenced that “(…) a mere 26% across all adults responded correctly to questions on simple and compound interest together – crucial concepts that affect basic money management and the accumulation of saving.” This finding is particularly relevant when compared with the results obtained from another comprehensive global survey on financial literacy carried out in 2014 by the Standard & Poor's Ratings Services and the Global Financial Literacy Excellence Centre, which found that only 33% of adults worldwide are financially literate. A decrease of over 6 percentage points, one for each year between the publication of the first survey (33%) and the last (26%). Such a fall can be attributed to the recent recurrent financial crises, thus showing that the increasing complexity of the financial system and clients‘ inability to cope with this growing complexity continue to challenge the well-functioning financial system (Zakaria and Sabri, 2013).
Therefore, given the relevance of the topic, with particular reference to vulnerable groups, we hereby present some of the most effective strategies and relevant resources available for the development of financial literacy in adult learners.
Board games, role play, and digital games in 2D or 3D have all proven to be effective ways of developing financial skills while having fun. Games-based learning solutions are interactive ways of solving problems, teaching, and satisfying the fundamental requirements of learning by providing enjoyment and motivation. A good example is Euroinvestment, a two-year Erasmus+ project (2018-2020) which seeks to enhance the financial literacy competences of low-skilled adults through an interactive online game. The Euroinvestment game consists of 15 mini-games on financial management which are divided into the following areas: Planning & Managing, Money & Transactions and Risk & Credit. By playing the mini-games players improve their level of financial literacy and management of expenses and income, they become better at making decisions on saving and borrowing, and are more likely to plan for retirement and hold more diverse assets on their balance sheet. Click here to play!
One of the basic assumptions of Knowles’ andragogy is that “learners are available to learn what they need to know or to do in order to face real life situations”. Engaging adult citizens in a community class action or awareness raising campaign, exploiting role models’ experiences or building educational pathways through a participatory approach are all excellent strategies for achieving good results in financial education. This is the case with the EDU-FIN project, launched in the years 2014-2016, which has established a learning curriculum on financial education based on the contribution of young adults at risk. Following a communicative methodology, all partners invited young adults who are at risk of financial exclusion to take part in 2-hour monthly sessions, where, starting from their real life stories, the main competences developed through the curriculum are identified and further developed into learning outcomes. Moreover, thanks to the generative dialogue established within a group of people who trust one another, it was possible to obtain recognisable profiles and financial problems, which have been used to shape the learning material.
Last, but not least, it is crucial to offer and share freely accessible resources for both adult educators and learners, so as to maximise the efforts spent on producing them and provide easy to use tools and procedures to solve more complex financial issues. Therefore, although an online search in a national language will definitely provide you with a more satisfactory result, below you can find a list of the most updated reports and online portals on good practises for financial literacy:
- OECD Education GPS is the education portal of the Organization for Economic Co-operation and Development. It provides access to a selection of education indicators, visualisation options (including the possibility to filter the results by the field of adult education) and policy analysis.
- ‘Financial education in a digital age’ published in 2017 by Insurance Europe, the European insurance and reinsurance federation, to showcase the broad range of initiatives that the European insurance industry is engaged in to increase people’s financial literacy and their understanding of insurance.
- ‘Financial Education for all’ also published in 2017 (second edition) by the European Economic Committee. It presents a detailed list of financial education strategies and best practices within the European Union.
- From the US, the Global Financial Literacy Excellence Centre offers a very useful Education section on its website, while the Institute for Financial Literacy of the MoneySense and Singapore Polytechnic Enterprise has put together an interesting set of Financial calculators that can be downloaded for free and used for educational or personal purposes.