Representative short study: financial behaviour can be significantly expanded
Financial education has room for improvement, but 82.1 per cent of respondents still trust their own financial decisions
There is room for improvement in financial literacy in Germany reveals current short study of IU: "Financial Literacy – What is the level of financial literacy in Germany?”.
- Almost all respondents (92.3 per cent) find financial literacy rather to very important.
- In a measure of financial literacy based on the OECD toolkit, participants scored 10.7 out of 20 possible points.
- 82.1 per cent of respondents trust themselves when making financial decisions.
- Almost half of the respondents (47.3 per cent) do not invest any money and exactly 50 percent of them have no money left to invest.
Erfurt, 2 August 2023. There is room for improvement in financial literacy in Germany reveals current short study of IU International University of Applied Sciences (IU): "Financial Literacy – What is the level of financial literacy in Germany?”.
"The handling of money and the understanding of investments, debts and financial instruments determine whether people lead a financially stable life and achieve financial goals," says Prof. Dr. Johannes Treu, Professor of General Business Administration and Economics at IU International University of Applied Sciences. That is why it would be of great importance if people in Germany expanded their financial literacy. Financial literacy is the knowledge and ability to make sound financial decisions.
Financial literacy is very important
Almost all respondents (92.3 percent) find financial literacy rather important to very important, and 79.7 percent rate their financial literacy itself as rather good to very good. However, the measurement (*) of financial literacy shows: Participants score an overall average of 10.7 points out of a total of 20 possible points. Looking at the measurement broken down into the four aspects measured, participants scored 4.9 out of 7 points for knowledge, 3.7 out of 9 points for behaviour and 2.1 out of 4 points for attitude towards finance.
“We need to teach young people in particular better financial knowledge," demands Prof. Dr Johannes Treu. "Schools should create a basic understanding. And we need digital, verified points of contact where everyone can get understandable information."
Family is the number one source for financial literacy
Only just under half of the respondents (49.2 per cent) feel that they are financially educated through their school education, for example via subjects such as economics or social studies. But nine out of ten respondents (89.3 per cent) continue their education when it comes to financial topics. They rely primarily on the family for this: 41.3 per cent of those surveyed named this source of financial knowledge most frequently. Amongst Generation Z – those under 25, 60.6 per cent of respondents said that family is a source of information.
Family is followed by sources such as general guides (37.1 per cent), financial websites with classic information (36.6 per cent) and recommendations from friends/acquaintances (35.2 per cent). Among Generation Z respondents, influencers and social media are much more important (38.9 per cent) than amongst the average of all respondents (19.6 per cent).
When it comes to financial decisions, the respondents primarily trust their own decisions (82.1 per cent). Further sources for financial decisions are family (60.4 per cent) or friends (43.6 per cent). At 39.0 per cent, financial advisors are at the bottom among trusted persons.
"Anyone who trusts themselves, their family or influencers too much is taking an unnecessary risk. With the below-average financial literacy in this country, we urgently need more comprehensible information and educational investments in this area," says Prof. Dr. Johannes Treu.
Many have no money for financial investments
Slightly more than half of the respondents invest in financial products such as funds, shares, real assets - or put money aside, for example in a cheque account, as call money or in a deposit account. The other half of the respondents does not do this - mainly because they have no money left for it (50.0 per cent), they are risk-averse (24.7 per cent) or do not feel sufficiently informed about financial products (23.6 per cent). The latter is especially true for Generation Z (38.7 per cent) and Y (31.0 per cent). With increasing age, respondents feel better informed in a generational comparison: 38.7 per cent of those under 25 think they do not know enough for a financial investment, but only 10 per cent of those over 56.
(*) The measurement of financial literacy was adapted from the "OECD Toolkit for Financial Literacy and Financial Inclusion". The OECD Toolkit is an instrument developed by the Organisation for Economic Co-operation and Development (OECD) to assess and compare financial literacy in different countries.
ABOUT THE SHORT STUDY
IU International University of Applied Sciences (IU) surveyed 1,202 people between the ages of 16 and 65 in Germany from 28.04. - 03.05.2023, representative by age and gender.
With over 130,000 students, IU International University of Applied Sciences (IU) is the largest university in Germany. The private, state-recognised educational institution with its headquarters in Erfurt began operations in 2000 and is now represented in more than 35 German cities. Students from over 190 nations design their studies according to their needs: whether practice-integrated dual studies, flexible distance learning or individual “myStudium”, which combines online self-study and campus life. IU wants to give people worldwide access to personalised education for a fulfilled and self-determined life. In more than 250 bachelor's, master's and MBA programmes, including over 50 in English, IU teaches students key skills relevant to the future. A digitally supported learning environment and the use of AI solutions help students to achieve optimal learning results and experiences. IU is one of the first universities in the world to have developed and deployed its own AI-supported learning buddy. IU cooperates with over 15,000 companies and supports them in the academic training of professionals. Partners include Motel One, Vodafone, AWO and Deutsche Bahn. Further information at: iu.org
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