Measuring Financial Literacy


  • The author would like to thank Michael Finke for his helpful suggestions in writing this paper. As the principal investigator of the Financial Literacy Assessment Project at Texas Tech University, the author would like to acknowledge research team members Vickie Hampton, Dorothy Durband and Michael Finke for their contributions, along with former graduate assistants Hyrum Smith and Sonya Britt.


Financial literacy (or financial knowledge) is typically an input to model the need for financial education and explain variation in financial outcomes. Defining and appropriately measuring financial literacy is essential to understand educational impact as well as barriers to effective financial choice. This article summarizes the broad range of financial literacy measures used in research over the last decade. An overview of the meaning and measurement of financial literacy is presented to highlight current limitations and assist researchers in establishing standardized, commonly accepted financial literacy instruments.