Can You Pass the Global Financial Literacy Test?


We use various forms of assessment in many areas of our lives. The IQ test for instance is widely used to measure the intelligence of a certain individual and predict his performance which would be beneficial for personal and professional success.

In addition, we employ Daniel Goleman’s Emotional intelligence test to evaluate several aspects of one’s emotions to create self-awareness and how to respond effectively in any given stressful situation.

On the other hand, the physician is making a diagnosis through and results of examination taken from laboratory to assess the patient’s health condition.

At school, we used academic assessment as an integral part of teaching and learning.

Purpose of financial literacy assessment

What about financial literacy? How do we assess whether someone is capable of managing his personal finances?

People with low levels of financial literacy tend to incur more debts, unable to compare and later make related decisions about investment programs, fail to plan for retirement, miss the importance of emergency fund, pay more extra fees related to financial products offered to them, and often unsuccessful effort in investing.

In order for you to make sound financial decisions, it is essential to have at least basic financial concepts. Because the cost of financial ignorance is so high, financial education is therefore essential to improve the quality of life.

Standard & Poor (S&P) on financial literacy

Numerous researches have been conducted about financial literacy but the Standard & Poor (S&P) is the most popular one. S&P is an American financial services company that publishes financial research and analysis. They provide a credible source of information about the subject and conducted survey about financial literacy in many countries.

Take for instance, the S&P’s Ratings Services Global Financial Literacy Survey is the world’s largest, most comprehensive global measurement of financial literacy.

Four financial concepts

Dr. Annamaria Lusardi, the Academic Director of Global Financial Literacy Excellence Centre at George Washington University School of Business highlighted the findings and made the information available in public. It is the first ever conducted global survey covering more than 140 countries in the world.

The survey was conducted last 2014 and the results come from interviews of more than 150,000 adults (15 and above). They were tested on their knowledge of four basic financial concepts: risk diversification, inflation, numeracy (capacity to do calculation in the context of interest rate), and interest compounding (saving and debt).

The questions were designed typically at the basis of financial decisions making in which are universal and can be asked regardless of any country to ensure the tool is valid and objective.

What are the findings?

What are the highlights of the study? The survey indicates the following findings:  there is a low levels of financial literacy around the world, numeracy and inflation are the most understood concept, risk diversification is the least understood concept, women’s financial literacy levels are lower than men’s, and the young are a vulnerable group and an important target for financial education programs.

Which countries have the most number of people who are financially literate?  They are countries from Europe such as Denmark, Norway, and Sweden who topped in the survey with 71 percent of adults who are financially literate followed by Canada, Israel, and UK. The United States on the other hand has 57 percent of adults who are financially literate, according to S&P survey.

What about the Philippines?  Significantly, the survey found the Philippines was one of the 30 least financially literate countries in the world, with only 25 percent of adults aware of the basics of managing their money.

Thailand has 27 percent, or two percent comparatively higher than the Philippines. Compared with other Asian countries, Singapore has the highest number of financially literate adult with 59 percent.

You may check the S&P Global Financial Literacy Survey summary report here. (

Now, it’s your turn to answer the survey

These are the sample questions being asked to respondents with four or five options to choose. To test your financial literacy, see how well you answer the following questions about financial concepts or money.

Risk Diversification

1. Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments?

a. one business or investment

b. multiple businesses or investments

c. don’t know

d. refused to answer


2. Suppose over the next 10 years the prices of the things you buy double. If your income also doubles, will you be able to buy less than you can buy today, the same as you can buy today, or more than you can buy today?

a. Less

b. the same

c. more

d. don’t know

e. refused to answer

Numeracy (Interest)

3. Suppose you need to borrow 100 US dollars. Which is the lower amount to pay back: 105 US dollars or 100 US dollars plus three percent?

a. 105 US dollars

b. 100 US dollars plus three percent

c. don’t know

d. refused to answer

Compound Interest

4. Suppose you put money in the bank for two years and the bank agrees to add 15 percent per year to your account. Will the bank add more money to your account the second year than it did the first year, or will it add the same amount of money both years?

a. More

b. the same

c. don’t know

d. refused to answer

5. Suppose you had 100 US dollars in a savings account and the bank adds 10 percent per year to the account. How much money would you have in the account after five years if you did not remove any money from the account?

a. more than 150 dollars

b. exactly 150 dollars

c. less than 150 dollars

d. don’t know

e. refused to answer

So how did you do? If your score is low, now might be the time to find a credible financial mentor and start improving your finances. Seek someone who could help you. In my case, I’ve been very blessed to have come upon the Truly Rich Club as my financial coach.

Remember, financial success is a result of a strong commitment and sound financial habits.

“We were not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate.”Robert Kiyosaki

Note: Follow  Jun Amparo’s blog at RichlyBlessedToday to get to know more of personal financial.

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Jun Amparo

Jun Amparo

JUN AMPARO is the author of two inspirational books about personal finance and marriage.  He is nominated as Huwarang OFW 2019 organized by The 700 Club Asia and is pursuing his doctoral study in education. Presently, he is working as a university counselor and lecturer at Asia-Pacific International University in Thailand.