Financial Literacy - Can It Be Measured And Can It Be Taught?

Over the past few years there has been an increasing interest in the field of financial literacy, what people know about financial matters, how they deal with their money and which financial decisions they make. Research all over the world has shown that the level of financial literacy is low among a large proportion of the population. It is the aim of this contribution to analyze how financial literacy has usually been measured and how well these measurements reflect the abilities to deal competently with money and financial matters. This analysis takes into account that different groups of a population might need very different abilities in order to manage their finances. The paper is concluded by an analysis of financial education methods and a discussion on effective programs to enhance people's understanding of financial matters and their effective decision making.