In the modern world, issues such as financial well-being of citizens, financial resilience of companies, financial education, as well as their importance for the stability of the financial sector, are increasingly being discussed to the fore. Financial literacy in turn depends on financial knowledge, financial behaviour and the attitude of the individual user to finances.

Financial education, financial inclusion and financial consumer protection are priority policies both for the Member States of the European Union, including Bulgaria, and for international organisations and institutions such as the Organisation for Economic Co-operation and Development (OECD), the World Bank, the G20, etc.

The significance of financial literacy has been globally recognised for decades in a number of international fora, but it has been increasingly targeted and systematic attention has been paid to it over the last ten to fifteen years. It relates to financial education, financial inclusion, financial well-being, financial resilience and the financial services consumer protection.

Financially literate people are more responsible and better prepared to plan their economic and financial future. If financially literate people predominate in a society, the society itself is financially more stable. However, no matter how financially literate a society is, it will always have vulnerable population groups for which a targeted policy of financial literacy should be pursued.

On the other hand, the continuous development of financial products and services and their digitisation raises the need for financially and digitally literate individuals to periodically upgrade their knowledge and skills. Financial literacy and financial education should thus remain a priority throughout the human life cycle, while respecting the principle of “lifelong learning”. Financial literacy for children and the younger generation is also crucial. Improving financial skills encourages the development of autonomy and discipline, and last but not least a propensity for entrepreneurial behaviour.

Financial literacy is most often defined as a combination of financial awareness, knowledge, skill, attitude and behaviour that is needed to make sustainable financial decisions and to achieve individual financial well-being as the ultimate goal. In the OECD Methodology for Measuring Financial Literacy, it is presented through three constituent elements (components): financial knowledge, financial behaviour and financial attitudes as more information on these three components is available here.

In the beginning, financial literacy policies focused primarily on financial education. Financial education is defined by the OECD in 2005 as the process by which consumers of financial services and investors improve their understanding of financial products, concepts and risks by developing, through information, instructions or objective advice, skills and confidence to gain greater knowledge of financial risks and opportunities, to make informed choices, to know who to turn to for help, and to take other effective actions to improve their financial well-being. Financial education as a concept continues to play a leading role in the definition and policies regarding financial literacy. In recent years, however, the term financial literacy has emerged as a more comprehensive concept which in addition to financial education also contains other important components and activities: financial inclusion, financial well-being, financial resilience and financial services consumer protection, as more information is available here.