How does numeracy influence financial capability

Financial literacy is the knowledge/skills people have about their finances that enables them to capably manage their household finances (Lusardi and Mitchell 2014). There is considerable literature on how to conceive and measure financial literacy. One component of financial literacy, numeracy, plays a particularly controversial role is numeracy. Numeracy refers to understanding the meaning and application, in this case, of numbers to household finances. Some argue that numeracy is irrelevant to financial capability (French & McKillop 2016). Others argue that competency with numeracy is a critical ingredient in financial literacy (Skagerland et al. 2018). The project seeks to address this tension in literature.

In fall 2023 we will begin a study that will use qualitative and quantitative methods, within a financial diaries methodology, in Birmingham/UK and Winnipeg/Canada, to examine how numeracy affects modest-means diarists’ financial capability.

Co-researchers: Dr Adele Atkinson, Center for Household Assets and Savings Management (CHASM) & Dr Jerry Buckland