THE IMPACT OF FINANCIAL EDUCATION ON FINANCIAL LITERACY AND SPENDING HABITS

Joseph Farinella
Julia Bland
Josep Franco
University of North Carolina Wilmington

ABSTRACT

Most governments are concerned about improving financial literacy. Providing a course on money management to high school students should be an effective method to improve financial literacy. In this study, we examine the relationship between high school student’s financial literacy, social equality and higher income. We found that financial literacy is correlated with higher per capita income and social equality. We also tested whether a course on money management in high school improves financial literacy or not.
The results of this study indicate that high school student’s financial literacy has not improved after taking a money management course. Financial literacy does improve if the student is provided this information as a topic in another course. In addition, taking a money management course does not lower a student’s willingness to avoid debt. However, learning money management as a topic in another course makes a student more likely to avoid debt. The evidence indicates that high school courses devoted to money management are not effectively teaching students.

Keywords: Financial education, financial literacy, GDP, social equity, money management