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Financial Literacy Among Consumers

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By looking at the previous research, it was found that financial literacy is defined differently by every researcher. Financial literacy is the ability of a person to manage financial resources effectively for a lifetime of financial well-being by using his or her knowledge and skills (The United States Financial Literacy and Education Commission, 2007). Lusardi (2008) mentioned that financial literacy is the knowledge of basic financial concepts such as the working of compounding interest, the difference between nominal and real values and the basic risk diversification. According to Mason and Wilson (2000), financial literacy is a process of meaning-making in which individuals use combination of skills, resources and contextual knowledge in order to process information and to make decisions based on the knowledge on financial consequences of that decision. Financial literacy is used to measure how well an individual can understand and use personal finance-related information in life (Huston, 2010). Nowadays, financial literacy has become more important nationwide. According to Fox, Suzanne and Jinkook (2005), concern for the levels of financial literacy in the society as a whole has grown significantly and is expected to …show more content…

According to Moschis and Moore (1984) in consumer socialization research, most of the behavior among consumers is learned through the influence of consumer socialization agents during the preadult years. Hence, anything that an individual has learned and experienced in the past could affect his or her behavior in the future. Examples of consumer socialization agents are parents, peers, social institutions like school and religious center and mass media. However, parents are the major and important consumer socialization agent for children in society

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