Volume 16, Issue Financial literacy is increasingly important as it has become essential that consumers acquire the skills to be able to survive in modern society and cope with the increasing diversity and complexity of financial products and services available. The overall objective of the study was to assess the level of financial literacy among Kenyan undergraduate students.
They can recognise the difference between needs and wants and can make simple decisions on everyday spending. They can recognise the purpose of everyday financial documents such as an invoice and apply single and basic numerical operations addition, subtraction or multiplication in financial contexts that they are likely to have experienced personally.
Level 2 Students begin to apply their knowledge of common financial products and commonly used financial terms and concepts. They can use given information to make financial decisions in contexts that are immediately relevant to them. They can recognise the value of a simple budget and can interpret prominent features of everyday financial documents.
They can apply single basic numerical operations, including division, to answer financial questions. They show an understanding of the Literacy in accounting between different financial elements, such as the amount of use and the costs incurred.
Level 3 Students can apply their understanding of commonly used financial concepts, terms and products to situations that are relevant to them. They begin to consider the consequences of financial decisions and they can make simple financial plans in familiar contexts.
They can make straightforward interpretations of a range of financial documents and can apply a range of basic numerical operations, including calculating percentages. They can choose the numerical operations needed to solve routine problems in relatively common financial literacy contexts, such as budget calculations Level 4 At level 4 students can apply their understanding of less common financial concepts and terms to contexts that will be relevant to them as they move towards adulthood, Literacy in accounting as bank account management and compound interest in saving products.
They can interpret and evaluate a range of detailed financial documents, such as bank statements, and explain the functions of less commonly used financial products. They can make financial decisions taking into account longer-term consequences, such as understanding the overall cost implication of paying back a loan over a longer period, and they can solve routine problems in less common financial contexts.
Level 5 At level 5 students can apply their understanding of a wide range of financial terms and concepts to contexts that may only become relevant to their lives in the long term. They can analyse complex financial products and can take into account features of financial documents that are significant but unstated or not immediately evident, such as transaction costs.
They can work with a high level of accuracy and solve non-routine financial problems, and they can describe the potential outcomes of financial decisions, showing an understanding of the wider financial landscape, such as income tax.
Planning and managing finances Income and wealth need planning and managing over both the short term and long term. This content area includes knowledge and ability to monitor income and expenses as well as knowledge and ability to make use of income and other available resources in the short and long terms to enhance financial well-being: Risk and reward Risk and reward is a key area of financial literacy, incorporating the ability to identify ways of managing, balancing and covering risks and an understanding of the potential for financial gains or losses across a range of financial contexts.
There are two types of risk of particular importance in this domain. The first relates to financial losses that an individual cannot bear, such as those caused by catastrophic or repeated costs.
The second is the risk inherent in financial products, such as credit agreements with variable interest rates, or investment products.
Financial landscape This content area relates to the character and features of the financial world.
It covers knowing the rights and responsibilities of consumers in the financial marketplace and within the general financial environment, and the main implications of financial contracts. Information resources and legal regulation are also topics relevant to this content area.
In its broadest sense, financial landscape also incorporates an understanding of the consequences of changes in economic conditions and public policies, such as changes in interest rates, inflation, taxation or welfare benefits. Financial contexts Education and work Education and work questions include understanding payslips, planning to save for higher education, investigating the benefists and risks of taking out a student loan, and participating in workplace savings schemes.
Home and family Home and family questions include financial issues relating to the costs involved in running a household such as buying household items or family groceries, keeping records of family spending and making plans for family events.
Decisions about budgeting and prioritising spending are also included in this context. Individual Individual questions include contractual issues around events such as opening a bank account, purchasing consumer goods, paying for recreational activities and dealing with relevant financial services that are often associated with larger consumption items, such as credit and insurance.
Societal Societal questions cover matters such as consumer rights and responsibilities, taxes and local government charges, business interests, and consumer purchasing power. Financial choices such as donating to non-profit organisations and charitites are also included in this context.
Financial literacy processes Identify financial information This process is engaged when the individual searches and accesses sources of financial information, and identifies or recognises its relevance.
The information is in the form of printed texts such as contracts, advertisements, charts, tables, forms and instructions.
A typical task might ask students to identify the features of a purchase invoice, or recognise the balance on a bank statement. Analyse information in a financial context Analysing information in a financial context includes interpreting, comparing and contrasting, synthesising, and extrapolating from information that is provided.
It involves recognising something that is not explicit: Evaluate financial issues Evaluating financial issues involves recognising or constructing financial justifications and explanations, drawing on financial knowledge and understanding applied in specified contexts. It involves explaining, assessing and generalising.
It also involves critical thinking such as drawing on knowledge, logic and plausible reasoning to make sense of and form a view about a finance-related problem.This study explored the lack of financial literacy and accountability of church leaders within black Baptist Church in fulfilling their financial stewardship responsibilities in overseeing the church’s resources.
In order for churches to grow both spiritually and financially, the church leaders are critical to the overall success and sustainability of the organization. Financial Literacy for Managers Finance and Accounting for Better Decision-Making The recipient of several teaching awards, his articles have appeared in The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, Rand Journal of Economics, and Strategic Management Journal.
Home» Accounting Dictionary» What is Financial Literacy? Definition: Financial literacy is the education and understanding of knowing how money is made, spent, and saved, as well as the skills and ability to use financial resources to make decisions. The Financial Literacy Program is all about how to read, derive, and apply relevant financial information to decision making situations.
Created for managers who are not financial specialists, this program provides a thorough foundation in finance and accounting. We don't mean 'asset' in the financial or accounting sense.
But we do use the word asset to suggest 'something of great value'! We use the word asset to draw attention to the social and cultural resources in our local community.
The President's Advisory Council on Financial Literacy defines personal financial literacy as "the ability to use knowledge and skills to manage financial resources effectively for a lifetime of.