Financial literacy is the ability to understand how money works in the world: how someone manages to earn or make it, how that person manages it, how he/she invests it (turn it into more) and how that person donates it to help others. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources. Raising interest in personal finance is now a focus of state-run programs in countries including Australia, Canada, Japan, the United States and the UK.
In America, much of the nation's financial education resources are run through a national nonprofit organization called Jumpstart Coalition Jumpstart Coalition. Each state, in turn, has its own chapter organization that holds events and helps members promote financial education to our youth.
In 2007, the Institute for Financial Literacy established an annual awards program to promote the effective delivery of financial products, services and education by acknowledging the accomplishments of individuals and organizations that advance financial literacy education.  In 2013, winners included Allstate Insurance Company in the category of for-profit organization of the year, and the iGrad Financial Literacy Platform in the category of best educational product in debt management. 
Success coach and entrepreneur Elisabeth Donati has developed an educational game called The Money Game in an attempt to teach children and teenagers valuable skills for obtaining financial literacy.
The Organization for Economic Co-operation and Development (OECD) started an inter-governmental project in 2003 with the objective of providing ways to improve financial education and literacy standards through the development of common financial literacy principles. In March 2008, the OECD launched the International Gateway for Financial Education, which serves as a clearinghouse for financial education programs, information and research worldwide. In the UK, the alternative term “financial capability” is used by the state and its agencies: the Financial Services Authority (FSA) in the UK started a national strategy on financial capability in 2003. The US Government also established its Financial Literacy and Education Commission in 2003.
In July 2010, the United States Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which created the Consumer Financial Protection Bureau (CFPB). The CFPB has been tasked, among other mandates, with promoting financial education through its Consumer Engagement & Education group.
- In Australia, 67 per cent of respondents indicated that they understood the concept of compound interest, yet when they were asked to solve a problem using the concept only 28 per cent had a good level of understanding.
- A British survey found that consumers do not actively seek out financial information. The information they do receive is acquired by chance, for example, by picking up a pamphlet at a bank or having a chance talk with a bank employee.
- A Canadian survey found that respondents considered choosing the right investments to be more stressful than going to the dentist.
- A survey of Korean high-school students showed that they had failing scores - that is, they answered fewer than 60 per cent of the questions correctly - on tests designed to measure their ability to choose and manage a credit card, their knowledge about saving and investing for retirement, and their awareness of risk and the importance of insuring against it.
- A survey in the US found that four out of ten American workers are not saving for retirement.
“Yet it is encouraging that the few financial education programmes which have been evaluated have been found to be reasonably effective. Research in the US shows that workers increase their participation in 401(k) plans (a type of retirement plan, with special tax advantages, which allows employees to save and invest for their own retirement) when employers offer financial education programmes, whether in the form of brochures or seminars.”
Additionally, a growing number of financial literacy researchers are raising questions about the political character of financial literacy education, arguing that it justifies the shifting of greater financial risk (e.g. tuition fees, pensions, health care costs, etc.) to individuals from corporations and governments. Many of these researchers argue for a financial literacy education that is more critically oriented and broader in focus; an education that supports individuals better understand systemic injustice and exclusion rather than one which understands financial failure as an individual problem and the character of financial risk as apolitical. Many of these researchers work within social justice, critical pedagogy, feminist and critical race theory paradigms.  
Asia Pacific Middle East Africa
A survey of women consumers across Asia Pacific Middle East Africa (APMEA) comprises basic money management, financial planning and investment. The top ten of APMEA Women MasterCard's Financial Literacy Index are: Thai 73.9, New Zealand 71.3, Australia 70.2, Vietnam 70.1, Singapore 69.4, Taiwan 68.7, Philippines 68.2, Hong Kong 68.0, Indonesia 66.5 and Malaysia 66.0.
A nationwide survey was conducted by SEDCO HOlding in Saudi Arabia to understand the level of financial literacy in the youth. The survey involved a thousand young Saudi nationals and the results showed that only 11 percent keep track of their spending; although 75 percent thought they understood the basics of money management. An in-depth analysis of SEDCO’s survey revealed that 45 percent of youngsters do not save any money at all, while only 20 percent save 10 percent of their monthly income. In terms of spending habits, the study indicated that items such as mobile phones and travel account for nearly 80 percent of purchases. Regarding financing their lifestyle, 46 percent of youth rely on their parents to fund big ticket items. Fortunately, 90 percent of the respondents stated that they are interested in increasing their financial knowledge.
The Australian Government established a National Consumer and Financial Literacy Taskforce in 2004, which recommended the establishment of the Financial Literacy Foundation in 2005. In 2008 the functions of the Foundation were transferred to the Australian Securities and Investments Commission (ASIC). The Australian Government also runs a range of programs (such as Money Management) to improve the financial literacy of its Indigenous population, particularly those living in remote communities.
In 2011 ASIC released a National Financial Literacy Strategy (www.financialliteracy.gov.au) — informed by an earlier ASIC research report 'Financial Literacy and Behavioural Change' — to enhance the financial wellbeing of all Australians by improving financial literacy levels.The strategy has four pillars:
- Trusted and independent information, tools and support
- Additional solutions to drive improved financial wellbeing and behavioural change
- Partnerships with the sectors involved with financial literacy, measuring its impact and promoting best practice
ASIC also has a MoneySmart Teaching website (teaching.moneysmart.gov.au) for teachers and educators. It provides professional learning and other resources to help educators integrate consumer and financial literacy into teaching and learning programs.
The United Kingdom
The UK has a dedicated body to promote financial capability - the Money Advice Service.
The Financial Services Act 2010 included a provision for the FSA to establish the Consumer Financial Education Body, known as CFEB. From April 26, 2010, CFEB continued the work of the FSA's Financial Capability Division independently of the FSA, and on April 4, 2011, was rebranded as the Money Advice Service.
The strategy previously involved the FSA spending about £10 million a year across a seven-point plan. The priority areas were:
- New parents
- Schools (a programme being delivered by pfeg)
- Young Adults
- Consumer communications
- Online tools
- Money advice
A baseline survey conducted 5,300 interviews across the UK in 2005. The report identified four themes:
- Many people are failing to plan ahead
- Many people are taking on financial risks without realising it
- Problems of debt are severe for a small proportion of the population, and many more people may be affected in an economic downturn
- The under-40s are, on average, less financially capable than their elders
“In short, unless steps are taken to improve levels of financial capability, we are storing up trouble for the future.”
There are also numerous charities in the United Kingdom working to improve financial literacy such as MyBnk, Credit Action, The Talking Economics Project, Citizens Advice Bureau and the Personal Finance Education Group.
The US Treasury established its Office of Financial Education in 2002; and the US Congress established the Financial Literacy and Education Commission under the Financial Literacy and Education Improvement Act in 2003. The Commission published its National Strategy on Financial Literacy  in 2006. The Jump$tart Coalition has championed personal financial literacy in the United States since as early as 1995.
While many organizations have supported the financial literacy movement, they may differ on their definitions of financial literacy. In a report by the President’s Advisory Council on Financial Literacy, the authors called for a consistent definition of financial literacy by which financial literacy education programs can be judged. They defined financial literacy as “the ability to use knowledge and skills to manage financial resources effectively for a lifetime of financial well-being.”
The Council for Economic Education (CEE) conducted a 2009 Survey of the States and found that 44 states currently have K-12 personal finance education or guidelines in place. Due to differing criteria, the Jump$tart Coalition only considers 24 states to have a component of personal financial education required. Results from the Jump$tart Survey of Personal Financial Literacy indicate low levels of financial literacy among American youth.
Additionally, automobile finance companies and retailers provide consumer education through Americans Well-informed on Automobile Retailing Economics.
Also, Northern Illinois University started a campus-wide Financial Literacy Initiative in 2009 with a program called Financial Cents. Financial Cents provides college students at Northern Illinois University with the tools and knowledge needed to make sound financial decisions during their college careers as well as after they graduate. Other public and private universities across the United States have implemented similar financial literacy programs.
The FSMA is tasked with contributing to better financial literacy of savers and investors that will enable individual savers, insured persons, shareholders and investors to be in a better position in their relationships with their financial institutions. As a result, they will be less likely to purchase products that are not suited to their profile.
- http://www.getsmarteraboutmoney.ca/managing-your-money/planning/investing-basics/Pages/what-is-financial-literacy.aspx What is financial literacy?
- ”Taking Ownership of the Future: The National Strategy for Financial Literacy”, US Financial Literacy and Education Commission, 2006
- Elisabeth Donati Teaches Kids How to Play — and Win — the Money Game at Nooz Hawk
- All about The Money Game at WinTheMoneyGame.com
- http://cqresearcherblog.blogspot.com/2009/09/financial-literacy.html CQ Researcher Blog
- Hecklinger, Richard E. Deputy Secretary-General of the OECD speaking January 9, 2006 at The Smith Institute, London reported in New Statesman accessed at  June 5, 2006
- http://www.afi.es/EO/FinancialLiteracy.pdf Shawn Cole & Gauri Kartini Shastry, If You Are So Smart, Why Aren't You Rich? The Effects of Education, Financial Literacy and Cognitive Ability on Financial Market Participation (November 2008)
- http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1098270 Lauren E. Willis, Evidence & Ideology in the Assessment of Financial Literacy Education, 46 San Diego L. Rev. 415 (2009)
- "Indian women surpass Chinese in financial literacy". The Times Of India. March 1, 2011.
- "About the National Financial Literacy Strategy".
- “Financial capability in the UK: Delivering Change”, Financial Services Authority, 2006, page 1, ISBN 1-84518-418-1
- “Improving Financial Literacy - Analysis of Issues and Policies” OECD 2005
- Lucey, T. A., & Cooter, K. S. "Financial Literacy for Children and Youth"
- Federal Reserve Bank of San Francisco. "Community Investments: Financial Education" 2009.