Curricular analyses indicate that the school curricula, especially in general secondary education, make hardly any reference to personal financial content (see Förster et al. Schools in Germany offer few opportunities for students to acquire knowledge and develop an understanding in personal finance matters. Our findings illustrate how important it is that young adults obtain experience with and actively inform themselves about financial products, particularly in countries such as Germany where personal finance is not taught extensively and systematically in school. The results show clear correlations between knowledge and understanding in the dimension ‘Banking’ and both experience and information behavior in personal finance matters.
The data set was prepared through multiple imputation and analyzed using regression models. In addition, we surveyed young adults’ experience in basic personal finance matters (e.g., having a bank account, using a credit card, paying for rent) and their information behavior towards specific financial products (e.g., stocks, investment, retirement plans, and insurance). In this paper, we focus on the dimension ‘Banking’ (covering financial investing, saving, using credit). Knowledge and understanding of personal finance was assessed using the German adaptation of the US Test of Financial Literacy. In this paper, we investigate the relationships between these latter variables based on a sample of 1108 young adults from Germany, aged 17–25, beginning their studies in higher education. Hence, apart from parents’ influence as role models, important influences on young adults’ financial knowledge and understanding likely include their personal experience with financial products and their behavior of informally seeking information about specific financial products.
In Germany, general secondary education offers few opportunities for young adults to acquire knowledge and understanding of personal finance.
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