Imagine someone buying an appliance on installments, without understanding that they will pay double its value. A young couple using their first credit card as if it were extra money, without thinking about the accrued interest. Or a politician offering unlimited subsidies or nationalizing savings.

In each case, ignorance weighs more heavily than a lack of money and makes us vulnerable to debt , irrational consumption, and political and economic deception.

The traditional education system teaches language, mathematics, and history, but fosters financial illiteracy (FI): people unable to understand and apply basic concepts about how credit, saving, investing, or debt management work. We know how to read texts, but not balance sheets. We calculate areas, but not interest.

Data that highlights the problem

According to 2023 data from the Organisation for Economic Co – operation and Development (OECD), the average financial literacy score for adults in 39 countries was 60 out of 100

The lack of financial education knows no social class, gender, or economic power of countries. In the United States, for example, levels have worsened in the post-pandemic era, affecting even those with a university education .

In Europe, only 18% of citizens enjoy a high level of financial literacy . And in Latin America, countries like Peru and Uruguay show the worst levels of financial knowledge .

On the other hand, the inhabitants of Sweden, Japan, Germany, New Zealand, and Singapore are the best prepared in this area.

Financial education and mental health

Lack of financial education has direct effects on mental health, stress, and depression. The Inter-American Development Bank indicates that economic worries are one of the main sources of anxiety among the working population .

Constant fear of non-payment, uncertainty about the future, or guilt over ill-informed financial decisions become factors in emotional and physical deterioration. Conversely, financial education empowers: it allows for planning, anticipating crises, and making decisions with greater control and confidence. Teaching how to manage money is, ultimately, teaching how to live with less fear.

Some inspiring models

In Finland, there is a business village , Yrityskylä , a simulated city that teaches children from primary and secondary school onward how to manage income, taxes, and businesses. Thus, it seems no coincidence that it ranks second among OECD countries with the best financial literacy. Furthermore, its Central Bank has created educational centers in this area for adults, extending learning to the entire population

A similar strategy is applied in some US states, where legislation requires schools to offer economic and financial education classes as a graduation requirement , not just as a supplement to other subjects.

It is not enough to say “let’s teach finance.” A public policy with continuity, evaluation, and real integration into education systems is required to reduce the population’s financial vulnerability: more debt, less saving, and a greater risk of political and economic deception.

Educating to Decide

Early financial education should be as essential as mathematics or civics. It is not about training accountants, but citizens capable of understanding basic concepts such as budgeting, interest, saving, risk , and responsible investing. And if this education reaches the most vulnerable and historically socioeconomically excluded populations, all the better.

OECD countries that have prioritized this education demonstrate that a financially empowered generation has multiplier effects on their families and communities, even influencing their parents’ economic decisions .

To Protect Democracy

Financial education is not a privilege but a social necessity and a way to protect democracy. Understanding money, at any age, means taking control of your life, reducing stress, and building a more stable future.

In Latin America, there is an urgent need for the design of comprehensive public policies that bring together schools, universities, the financial sector, governments, and the media. Financial literacy cannot depend on individual interest: it must be considered an educational right and a tool for social inclusion.

Because in a world where ignorance is paid for with interest, learning to decide remains the most revolutionary act we have left.

Author Bio: James Manuel Pérez-Morón is Professor, International School of Economic and Administrative Sciences at the University of La Sabana