Global Financial Literacy Ranking

Financial Literacy Around the World

Only 1/3rd of the world’s adult population is financially literate according to a report by S&P and the World Bank. The research looked at the response from 150,000 people from 140 different countries in 2014. Subjects were asked to answer a series of questions that measure fundamental personal finance concepts. There were 4 questions in total. The last question was split into two parts. Only one part needed to be answered correctly in order to get a passing mark for that question.

A person is considered financially literate when he or she correctly answered at least 3 out of the 4 financial questions. Based on this definition, the study determined that 33% of adults worldwide are financially literate.

68% of Canadians are Financially Literate

The Scandivania countries topped the rankings in a three-way tie. Canada and Israel tied for 4th place. The United States may be the world’s richest country, but it came in at 14th place, which is still in the top 10% of all the countries that participated. 🙂


The report notes that most people in major advanced economies are financially literate. But in contrast, the major emerging economies such as Brazil, India, and South Africa have a financial literacy rate of only 28% on average.

It’s sad how developing economies tend to have a lower rate of financial literacy because those are often the countries that face the worst financial problems. The financial literacy rate in Puerto Rico is only 32%. It defaulted on its $174 Million debt payment earlier this month because it literally ran out of money. It still owes over $70 Billion and more defaults are expected to come. One of its options is to file for Chapter 9 municipal bankruptcy so it can ask the U.S. Congress for debt relief. If nothing is done then the worsening financial problems could turn into a humanitarian crisis. Puerto Rico’s economy is slowly becoming a basket case. The small island territory appears to have more issues than MoneySense magazine.


In an even worse case, the inflation rate in Somalia averaged 23% from 1961 until 2013. Egad! Imagine losing 23% of your retirement savings every year. ? And only 15% of adults in Somalia passed the financial literacy quiz. When economies are run by incapable governments it’s always the citizens who end up suffering the most. Catch-22 conundrums aren’t easy to fix. When the majority of a population doesn’t understand the basic concepts of inflation or interest rates then it’s a lot harder to find capable leaders from within that group to address the important issues.

Financial ignorance leads to significant costs. People who fail to understand simple financial principles tend to borrow more, save less, incur higher borrowing costs, run up bigger debts, and spend more on transaction fees. As the report says, “without an understanding of basic financial concepts, people are not well equipped to make decisions related to financial management. People who are financially literate have the ability to make informed financial choices regarding saving, investing, borrowing, and more.”

Do you think you are financially literate? You can take the same financial literacy quiz on the Wall St. Journey site. Feel free to share your score in the comments below. 😉

Random Useless Fact

The most expensive type beef in the world is authentic Kobe beef from Japanese Wagyu cattle. One pound sells for $150 or more.


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Josh @ FamilyFinancier
01/14/2016 6:38 am

This kind of makes me want to write an article on improving financial literacy in Somali!

Its devastating to learn how rough some people have it elsewhere in the world. We are blessed to have powerful economic forces propelling us towards a better future!

01/14/2016 11:28 am

re: “Its devastating to learn how rough some people have it elsewhere in the world. We are blessed to have powerful economic forces propelling us towards a better future!”

Elsewhere in the world?? Why not look to your own backyard and the abysmal state of our First Nations population (financial or otherwise). Our so-called blessed “powerful economic forces” don’t propell all towards a better future.

01/26/2016 6:34 am
Reply to  Anon

What I tell ya:
Canada discriminates against children on reserves

“On-reserve child welfare system receives up to 38% less funding than elsewhere…created various adverse impacts for many First Nations children and families living on reserves.”

01/14/2016 11:14 am

“Only 1/3rd of the world’s adult population is financially literate…” Much less than this. About half the world’s adult population lives in poverty; thus perhaps 15% of the world’s adult population is financially literate…the 15% holding all the wealth. “68% of Canadians are Financially Literate” Subjective measurement. According to the Financial Consumer Agency of Canada’s 2014 Canadian Financial Capability Survey, more than 60% of adults rate their financial knowledge as fair or poor. That knocks Canada’s rate down to 40%, or less than the monetary joke that is Zimbabwe. Considering the debt levels of Canadian citizens, I’d think our literacy rate is lower rather than higher; either that, or we are smart people behaving dumb. This kind of surface-to-surface regurgitation with no in-depth analysis is one of the major negatives of personal finance blogs, and more than likely a contributing factor to suppressing financial literacy rates. “…the inflation rate in Somalia averaged 23% from 1961 until 2013. Egad! Imagine losing 23% of your retirement savings every year. And only 15% of adults in Somalia passed the financial literacy quiz.” This is one of the more vastly ignorant and inane things you have written. Somalia is one of the poorest countries… Read more »

01/17/2016 12:56 pm

It’s not just Somalians, dude, HALF the world’s population (and more) lives in a perpetual state of day-to-day subsistence.

Retirement is a wholly Western concept that is barely a century old. If the majority of “rich” Westerners can’t afford to retire, or retire into poverty, it’s safe to say that citizens of impoverished nations that don’t have a history of retirement indoctrination won’t be enjoying any kind of unemployment by choice, no matter their age.

Brings up an interesting point, if people in countries such as Canada are so financially literate, why are so few adequately prepared for perhaps their most important financial goal — retirement? My guess is that simple math quizzes (such as the S&P test) only reflect simple math literacy and not true financial literacy.

Your one-line follow-ups are a bit bizarre and do nothing to further the conversation. I guess all your effort stops after the initial article?

Jess @ Best Credit Cards Canada
Jess @ Best Credit Cards Canada
01/14/2016 6:55 pm

Fun quiz – I got 5/5 which is actually what I was expecting. It’s sad that the rates of financial literacy are so low given how basic these questions were. I by no means consider myself a savvy investor nor do I pretend to understand complicated financial tools (like options and futures, haha) but I have a very good sense of money, its value and how to budget and really, that is the most important thing, I think.

01/14/2016 11:09 pm

I think people in the poor countries r not trapped in the loop of finacial illiteracy keeps them poor and vice versa. Coming from a former communist country and having travelled outside of western world I believe that if you r barelly surviving then no amout of such knowledge will make much difference for u. Imagine u r oppresed every day, system is totally corrupt, there is little work then u can care less about budgeting and more about hunting, gathering, building shelter, and even perhaps stealing.

01/15/2016 6:37 am
Reply to  Stan

There should be a ‘like’ button for comments.
I agree with Stan about living in a system that is so corrupt, there is no use to learn about investing since you will never invest anyway.
I live in Canada and the city where I live put up land for sale in a prime location… unfortunately, there was no ‘for sale’ sign outside, it was word of mouth from the politian’s to the mobsters. The land was sold for 100k and the mobsters resold it one month later for 1.2M. Luckily for the rest of us who are not part of all the corruption, we can still make a decent living in Canada, but imagine a Country where everyone in power is corrupt and it is in their best interest to keep people illiterate. More $ for them. Greed.

01/17/2016 9:19 am

Power does not corrupt. It’s that corruptible people are drawn to power (e.g. politics).

A study done a few years ago examined the number of provincial political scandals/corruptions over the last 100 years: Quebec was first, B.C. was second.

01/14/2016 11:16 pm

Another think given Canadians’ private debt levels is to remember that financial literacy is one think and acting on it is another 😉 Knowing something does not equal behaving in line with one’s knowledge. We, people, r simply not rational. And there is no proof that always behaving rationally leads to best results/life 🙂

01/14/2016 11:32 pm

“You can take the same financial literacy quiz on the Wall St. Journey [sic] site.”

I went to the link but found a math quiz instead of a finance quiz. As stated in the WSJ article, “questions that are universally applicable and have universally correct answers…” — yeah, that’s called math, not finance. Now you know why America faired so poorly.

(Note: the very first question is hyper-generalised and has no “universally correct” answer. It’s a null question.)

Guess if people want to be better with money they might want to be better with math first, as pointed out on p.15 of the study, as does this Harvard finance prof in his research (and WSJ article):

ChrisCD (@jumbocds)
ChrisCD (@jumbocds)
01/15/2016 6:25 am

Phew — 5/5 — but man those questions were pretty basic. And 43% of the people in the US did not pass. Yikes.

cd :O)

sherry @ save. spend. splurge.
01/15/2016 12:30 pm

5/5 but I stupidly tried to second guess myself without needing to.

01/18/2016 9:55 am

Financial Ignorance is global. Last year it was small islands in the Mediterranean, currently it’s small islands in the Caribbean. When will the implications of FI (the bad FI that is) whole continents?

01/19/2016 10:44 am

“Personally accountability, less taxation, and more freedom should help the population learn to think for themselves.”

I highly doubt that. It would mean a lot more poor people and richer rich people. A lack of safety nets does not increase intelligence or financial/economic awareness in those not capable of housing such traits. Whereas lack of govt road blocks would give the wealthy/asset owners access to keeping and acquiring even more wealth.

Financial Samurai
01/18/2016 9:54 pm

Fascinating stuff! Looks like a lot of upside to start a personal finance blog in the US, and not as much in Canada! 🙂

01/24/2016 9:12 am

An observation — if Canadians are 68% financially literate, meaning we understand the concepts and functions of finance, how come only 1% of us are millionaires? Seems very telling of the very obvious disconnect between theory and reality.

(I’ll post this again later elsewhere, just because no one reads old posts, so this is basically ether fodder.)

01/28/2016 6:01 am

[…] comes from not knowing what you’re doing.” That’s why countries that are less financially literate tend to have a less affluent population. People who work in business and investment […]


[…] problem is already well documented, with a recent global survey ranking the nation amongst the least financially literate in the world. Just 28% of South Africans considered to be financially […]