Financial literacy refers to the ability to understand and manage personal financial matters effectively. It involves knowledge and skills related to budgeting, saving, investing, borrowing, and managing debt. Financial literacy also encompasses an understanding of financial products and services, such as credit cards, loans, insurance, and retirement accounts, as well as knowledge of financial concepts and terminology.
Financial literacy is important for individuals to make informed decisions about their personal finances. It helps them to understand how to manage their money effectively, plan for the future, and avoid financial problems. Financially literate individuals are better equipped to achieve their financial goals and navigate the financial system, and are less likely to fall prey to scams or make poor financial decisions.