The Nature of Financial Literacy

Abstract

One may interpret financial literacy as the ability to understand and apply the processes and tools associated with personal finances. It may be construed in one of two manners, thin and thick. From a thin (conventional) perspective, one interprets financial literacy as how one acquires, manages, and accumulates money for personal use. Understood in this vein, financial literacy involves a focus on money as a tool for accomplishing one’s own life goals.