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Saving or splurging: Where are young people most financially literate?

Young person learns how to manage money.
Young person learns how to manage money. Copyright Canva.
Copyright Canva.
By Eleanor Butler
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Knowing how to manage money is more important than ever, says the OECD, but nearly one in five students surveyed lacked basic proficiency.


Governments need to do more to boost financial literacy among students, said the OECD on releasing their latest PISA publication.

The study, a money-focused section of a wider report on education, is based on tests completed by nearly 100,000 15-year-olds in 2022. Participating students were located across 14 OECD and 6 partner economies.

With 18% of students in OECD countries performing at or below the most basic level of financial literacy, the group's Secretary-General Mathias Cormann stressed "the need to better equip young people with the knowledge and skills necessary to make safe and informed financial decisions."

Performing at level one means that students can make simple decisions about everyday spending and recognise the purpose of everyday financial documents.

Achieving this score also means that the individual can understand the difference between needs and desires in a monetary context.

Belgium’s Flemish community tops the list

The OECD economies that took part in the financial literacy assessment were: Austria, the Flemish community of Belgium, Costa Rica, Czechia, Denmark, Hungary, Italy, the Netherlands, Norway, Poland, Portugal, Spain, the United States, and eight Canadian provinces.

The 6 partner countries also participating were: Brazil, Bulgaria, Malaysia, Peru, Saudi Arabia and the United Arab Emirates.

Of these areas studied, 7 performed above the OECD average in terms of financial literacy.

These were Austria, the Flemish community of Belgium, the Canadian provinces, Czechia, Denmark, the Netherlands and Poland.

On average across OECD economies, 11% of students were top performers, meaning they could analyse complex financial products and solve non-routine financial problems. 

More than 15% of students in the Flemish community of Belgium and the Netherlands were top performers when it came to money matters, compared to less than 1% of students in Malaysia and Saudi Arabia.

More than 45% of students in Brazil, Malaysia and Saudi Arabia, meanwhile, performed at or below the most basic level.

This is compared to 11% of low-performing students in Denmark.

Among the countries that have participated in all PISA financial literacy tests, Italy improved its performance in 2022 compared to 2012, and Spain and the United States improved their performance in 2022 compared to 2015.

Poland improved its performance in 2022 compared to 2015, although it performed worse than in 2018.


Gender no real determinant of financial literacy

PISA data shows there is no clear correlation between gender and financial literacy, with the performance of boys and girls differing across economies.

Boys were overrepresented at both ends of the spectrum, dominating the groups that excel but also the groups that underperform.

To look at country-specific snapshots, boys scored more highly than girls in Austria, Costa Rica, Denmark, Hungary, Italy, and Portugal.

Girls outperformed boys in Bulgaria, Malaysia, Norway, and the UAE.


With regard to certain skills, more boys than girls reported feeling confident understanding a sales contract (19% higher) and planning their spending in light of their current financial situation (8% higher).

More support needed for disadvantaged students

Unlike gender, a young person's economic background has a clear correlation with their ability to manage money.

In every participating PISA area that collected data on socio-economic status, advantaged students performed significantly better than disadvantaged students.

The gap between advantaged and disadvantaged students in the Flemish community of Belgium, Bulgaria, Czechia, Hungary and Peru was greater than 100 score points (with each ranking category worth 75 points).


The disparity was less than 75 points in the Canadian provinces, Denmark, Italy, Portugal, Saudi Arabia and Spain.

"If children and young people learn about money matters only through their parents and families, inequalities in levels of financial literacy, wealth, and financial well-being may be reinforced across generations," said the OECD.

"Providing youth with financial education in schools and via other programmes can help shrink disparities in financial literacy due to differences in students’ current socio-economic status."

Advantaged students said they felt more confident in managing money based on their financial situation, compared to more disadvantaged young people.


Saving and spending

Although the OECD noted that financial savviness needs to be boosted, young people are engaging in some positive habits when managing their money.

In the year prior to the PISA test, an average of 93% of students across participating OECD economies reported that they had saved money at least once.

82%, meanwhile, said they had checked they were given the right change when they bought something with cash, while 74% of students had compared prices in different shops before making a purchase.

That said, on average across participating economies, 74% of students said that they had bought something that cost more money than they intended to spend in the year prior to the test.


More than 80% of students had splurged out in Norway, Poland, Bulgaria, Czechia, Denmark and the Netherlands.

Why do we need financial literacy?

Knowing how to manage money is not just essential for managing day-to-day purchases, said the OECD, but is also an important way for young people to spot fraud and financial scams.

Moving into adulthood, their need for these skills is likely to be more pressing as services become increasingly digitalised. Buy Now Pay Later schemes, crypto-assets, and "finfluencers", for instance, have all been on the rise in recent years.

What's more, experts stress that awareness is needed so that young people can effectively plan for their futures.


"Increased life expectancy, less welfare protection and more uncertainty in retirement income due to changing pension regimes mean that future generations will probably need to take more individual financial responsibilities … than the previous generations," said the OECD.

The group added that greater government support, particularly targeted towards the least capable, would help to tackle this knowledge gap.

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