Financial Literacy
Also called: money literacy, financial education
Financial literacy is understanding the core money concepts — interest, inflation, diversification, the cost of debt — well enough to make good decisions. The standard measure is the three-question 'Big Three' test on compounding, inflation and diversification; barely a third of adults worldwide get all three right. The gap is expensive rather than abstract: it maps directly onto carrying revolving credit-card balances, undersaving for retirement, and paying for advice that a fee-only index fund would have beaten.
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