How financially literate are Europeans? Not very - but who knows most?
EU citizens are not doing well when it comes to financial literacy. Nearly half lack an understanding of basic financial concepts, including inflation.
A third of Europeans do not understand how inflation works, according to a survey by Eurobarometer. The same survey revealed only 18% of EU citizens were able to show a high level of financial literary.
According to the survey, 65% of EU citizens are aware that, in times of positive inflation, the purchasing power of their money decreases, meaning they can buy less than they could before with the same amount of money.
Lack of knowledge about inflation could be seen as concerning
In October 2022, the annual inflation in the EU reached levels not seen before in the previous four decades at 11.5%. While the rising cost of living was the most pressing worry for 93% of Europeans at that time, apparently a third of EU citizens do not know how inflation affects their lives.
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The best performers were the Netherlands (43%), Denmark (40%), Finland (40%) and Estonia (39%) where about four in 10 respondents display a high level of financial knowledge.
Romania and Portugal reported the worst scores in high levels of financial knowledge at 13% and 16%, respectively.
How can anyone expect to be financially literate when the rules of capitalism keep changing and economists never agree with each other on anything?
Inflation is not exactly a new concept, and not that difficult to understand. I
Ask 10 economists if inflation is beneficial or detrimental to an economy and see how many answers you get.
Sure, it's good to know that "you likely can't afford as much in periods of inflation" but that really doesn't tell you much. It certainly tells you nothing that you really need to know like what you can do about it.
What a straw man. The question is: what is inflation? Not: is inflation beneficial or detrimental.? The latter is indeed a more subtle question, but that’s
No, the question was how financially literate are Europeans. Hence the headline: How financially literate are Europeans? Not very - but who knows most?
And my answer is still- it's basically impossible for most people, if anyone, to be financially literate in 2024.
That isn’t true. I’m literate as well as all my friends.
Lemmy is just an echo chamber of financial illiteracy. It’s mind boggling how few basic concepts are understood here.
The questions are in the article I see there missed all the time here.
I mean, maybe that's true -- I've seen no poll on here.
But I think that the article's point stands, and it's talking about a Eurobarometer poll of Europe as a whole and Europe not doing so well. That's not just a tiny pocket somewhere.
Are you literate or do you think you're literate? Have you and your friends taken any evaluations to back that up? If so, who designed the evaluations?
Because I bet could I find an economist who would tell you that all sorts of things you think you know about how economies were are entirely wrong. And then a second one to tell you that everything that the first economist says is wrong.
I just the evaluation listed in the article. I got 100%. It’s only 5 questions.
You are confusing with economics with financial literacy. Not exactly the same things
Americans generically are horrible at financial literacy. It’s something that should be taught in school. It was when they went to high school. Hence why I can answer the questions easily.
Uh...
If Americans are genetically horrible at it, you can't teach it to them.
Generically. Auto correct.
Okay, well anyway, I think the test is confusing economics with financial literacy because not knowing the connection between bond prices and inflation doesn't show you're financially illiterate. Not knowing details about bond investment is not a sign of financial illiteracy. If it was, almost everyone would be financially illiterate because most people aren't doing a lot of trading in the bond markets.
Financially literate people are. I trade in stocks and bonds. Everyone I know does. It’a most likely part of your 401k which most people don’t understand. The test was designed to see you understood basic concepts like what inflation does to money. That’s a basic financial literacy question. Do you understand compound interest, etc.
You move in small circles. First of all Europe doesn't have 401ks. Secondly, only 34% of Americans have 401ks.
https://www.census.gov/library/stories/2022/08/who-has-retirement-accounts.html
Maybe get off the yacht and talk to a poor person once in a while. Be sure to lecture them on how it's their fault for being poor because they lack financial literacy when you do though.
Because that's an opinion question. Very different to 'what is inflation?'
This isn't even true though. The vast majority will agree that a little bit of inflation is good, deflation is very bad, and hyperinflation is essentially cataclysmic.
The questions are basically "what is inflation?" and "what did they teach you in high school about investing in stocks?"
They're pretty trivial.
I agree that the rich are able to get away with weird financial fuckery because they own regulators. But that may be because the average voter doesn't understand how investments are supposed to work.
I think some of the questions there are trivial. I don't think all of them are. Take the third question. I don't think it's a trivial question and I don't think that not knowing that bond prices drop when inflation rises is something that shows financial illiteracy. It's not really something most people have to worry about in the first place in terms of something within their control.
Yeah, the bond question doesn't seem relevant to most people (unless they're building a trading portfolio), but the questions on inflation and buying power shrinking over time are extremely important.