PressNewsCompanyPoint of view: The importance of being financially literate

The importance of being financially literate

Service & Contacts

Allianz Group Communications
Koeniginstr. 28
80802 Munich
Germany

Contact overview

Receive the latest Allianz news.

Newsletter

Follow Allianz in the social networks:

Facebook
Twitter
Google+
LinkedIn

  • Contact

  • Newsletter

  • Social Media

It’s simple math: competence – especially in finance – saves money. Ignorance, by contrast, costs dearly. There certainly is a lot of catching-up to do in the field of financial literacy, for kids and adults alike.

 

Allianz SE
Munich, Apr 20, 2016

Allianz-The importance of being financially literate

Financial literacy saves money. In other words: according to the demographic researchers Annamaria Lusardi and Olivia Mitchell every individual bears the costs of his or her financial ignorance. Those unfamiliar with financial matters are more likely to take out a loan, tend to save less and generally pay higher fees for financial products. Since the financial crisis, many governments have introduced national strategies to improve the economic education of their citizens. Since 2008 the OECD (Organization for Economic Cooperation and Development) has been more active in promoting the issue on an international level with the help of the International Network on Financial Education.
 
Since then, the question of how we can develop financial literacy in general has been discussed again and again. What is the best way to set up effective financial literacy programs? At what age should children ideally start learning about all things finance and how can they continue to do so once they become adults? Financial Resilience Throughout Life, an OECD symposium that will take place on April 20 and 21 in Amsterdam takes up these questions. Scientists like Lusardi and numerous practical experts will come together to discuss measures which will encourage all age groups to manage their money in a responsible way. Ines van Kaldekerken will travel to Amsterdam to take part in the event and will tell us what trends the experts are expecting in her blog. The conference in Amsterdam also fits in perfectly with the National Financial Literacy Month in the USA.
 
"Financial literacy is important at all stages of life", says Brigitte Miksa, head of the International Pensions team at Allianz. "In view of the demographic development and increasing tightening of state finance reins in many countries across the globe, it is essential that we make provisions for our old age ourselves. A society that is not sufficiently prepared to make far-reaching financial decisions is on the brink of social problems".
 
Being able to make decisions to ensure financial wellbeing
 
We have a lot of catching-up to do when it comes to young people; they don't know a lot about dealing with bank accounts, credit cards, interest rates, saving, risk and revenue. A PISA study carried out by the OECD (Organization for Economic Cooperation and Development) in 2014 dug deeper for the first time and identified considerable gaps in knowledge. On average, 15 percent of those surveyed did not even show correct basic knowledge.
 
"It is incredible how poorly young people are equipped for modern life. We need to act, no doubt about that", says Miksa. "Only once they know how interest rates, for example, or products such as investment funds and insurance work, once they are able to weigh up the risks and opportunities, will they be able to get clued up and make decisions which ensure their financial wellbeing." However, as she points out, a look beyond the PISA study shows that adult financial literacy is not in good shape. According to earlier OECD investigations, there's a lot of potential for improvement in many countries around the globe. These investigations are testimony to the fact that women, in particular, have some catching-up to do.
 
Early educational initiatives as a solution?
 
There is some controversy among experts as to whether financial literacy from an early age can contribute to solving the problem. Whilst some believe that governments, regulators and the financial industry need to do a great deal for the financial literacy of children and young people, since this is the only way for the latter to learn suitable patterns of behavior, others insist that this approach is doomed to fail from the outset. A lot of projects have been initiated in recent years. My Finance Coach was founded in 2010 in Germany by a host of companies, including Allianz, and is an example of initiatives that make young people aware of the need to manage their money responsibly. The aim is to get children and young people interested in the way in which the economy interconnects to then teach them about finance. In doing so, My Finance Coach enables young people to act as responsible economic citizens.
 
Miksa cuts to the chase: "We are all aware that we don't always make good and right decisions. But fundamentally, it is important to equip people with the right tools to make informed decisions about their finances." This means that ultimately, a better understanding of economic issues benefits everyone: individuals, society and the political and economic community.

  More information

  Forward Looking Statement disclaimer

As with all content published on this site, these statements are subject to our Forward Looking Statement disclaimer:

  Press contact

Petra Brandes
​Allianz SE
Phone +49.89.3800-18797
Send email

  More at allianz.com

California Wildfires 2018: Reign of Fire

Allianz-California Wildfires 2018: Reign of Fire
Aug 14, 2018 | Allianz SE

Wildfires in California have burnt through 820,000 acres so far this year. As the U.S. state battles the blaze, is it time to accept that bigger and more frequent wildfires are the new normal?

More...

Allianz reports strong results for 2Q 2018 and confirms full-year outlook

Allianz-Allianz reports strong results for 2Q 2018 and confirms full-year outlook
Aug 03, 2018 | Allianz SE

After a successful start into 2018, Allianz Group continued to achieve good performance in the second quarter. Indicators remained close to or exceeded the second-quarter 2017 levels, despite burdens from geopolitical instabilities and currency fluctuations. 

More...

Allianz World Run 2018: Run Lola Run

Allianz-Allianz World Run 2018: Run Lola Run
Jul 31, 2018 | Allianz SE

Pull up your socks and dust off those shoes. The Allianz World Run 2018 has begun and you’re invited to be a part of the fun run to good health.Over the past two years of the Allianz World Run, more than 22,000 Allianz employees from 55 countries ran 2.75 million kilometers, each year smashing the record for the “longest cumulative distance run by one team in 90 days”. This time around, the event has been opened to everyone as Allianz aims to inspire more people to get moving. 

More...
More...