What does 'financial literacy' mean?

Financial literacy refers to the ability to understand and effectively use financial skills, which encompasses a wide range of competencies such as budgeting, saving, investing, and understanding credit and loans. It is crucial for making informed and effective decisions about personal finances, helping individuals manage their money wisely and plan for future financial goals.

The emphasis is on the broad understanding and application of various financial concepts, rather than a narrow focus on a single area, such as only investment strategies or business finances. This comprehensive skill set enables individuals to navigate financial challenges and take advantage of opportunities, ultimately leading to improved financial well-being.