Women's financial literacy still dragging

A University of Melbourne and HILDA research piece examined financial literacy in women and men, identifying a lag in almost all aspects for women. 

The study used a five-point financial literacy test, looking at numeracy, inflation, diversification, risk-return and money illusion. Out of the five areas, men got an average of 4.1 answers correct, while women only got 3.7 correct. 

One of the interesting features of the results was that 49.9 per cent of men answered all five questions correctly, while just 35.4 per cent of women got them all right. Financial literacy is lowest in those aged 15-24, and increased as participants got older. Ages 45-65 scored the highest, but financial literacy slumped off again after age 65. 

The lowest scores were achieved by immigrants from non-English-speaking countries and Indigenous Australians, with researchers suggesting that language and cultural factors may explain the differences. 

People with partners, full-time employment, and university education scored highest. Whether someone had a full-time job or not seemed to make a difference too, with those without a job scoring lower. 

What does financial literacy actually mean?

According to the OECD International Network on Financial Education, financial literacy is a combination of awareness, knowledge, skill, attitude and behaviour necessary to make sound financial decisions, with the ultimate outcome being financial wellbeing.