PROJECT MONEY MASTER
Money Master is an initiative of 6 partners from 5 different European countries which has the support of the Lifelong Learning Programme of the European Commission.
The project aims to contribute to the development of Financial Literacy skills of youngsters by developing and making available a computer learning game to be used in formal and non-formal education settings.
The project aims to create a computer game to be used in regular education setting and other contexts (eg blended learning, self-organised learning), that provides a simulated real life-like environment in which users are presented with key financial concepts and are required to make decisions regarding the use of money, in order to:
• Prepare them for their financial responsibilities in life, providing them with the knowledge and skills to ensure a successful transition from financial dependence to independence;
• Strengthen their behaviours leading to increased saving, more productive and responsible spending, and borrowing for sound reasons.
[What is Financial Literacy?]
The most common definition of “financial literacy” is the ability to make appropriate decisions in managing personal finances. It refers to the set of skills and knowledge that allows an individual to make informed and effective decisions through their understanding of finances.
Financial literacy is first and foremost about empowering and educating consumers so that they are knowledgeable about finance and economics in a way that is relevant to their lives and enables them to evaluate products and make informed decisions.
[Why is Financial Literacy Important?]
Mounting evidence shows that those who are less financially literate are more likely to have problems with debt, are less likely to save, are more likely to engage in high-cost credit, and are less likely to plan for the future. Financial literacy provides greater control of one’s financial future, more effective use of financial products and services, and reduced vulnerability to overzealous retailers or fraudulent schemes.
The current financial crisis has focused renewed attention on the importance of people being both well informed about their financial options and discerning financial consumers - in short, being financial literate.
The origin of the current crisis, which began in developed country markets, is rooted (among other important factors, like lax interest rate policy) in housing price bubbles that were fed by providing overextended consumers with access to credit. Financial literate consumers, it is argued, would have been more cautious in taking on credit they couldn't afford.
The current crisis has also highlighted vulnerabilities created by financial innovation and the increasing complexity of financial markets. Loan products became too complex for consumers to easily understand, and disclosure was inadequate to clarify the risks.
Thus, as recent difficulties in advanced credit markets have shown, customers everywhere would benefit from having greater financial and economic knowledge.
[What’s the Current Level of Financial Literacy in Europe?]
In the study “The Case for Financial and economic Literacy in Developing Countries” (OECD, 2009) it’s stated that “There is widespread agreement that levels of financial literacy worldwide are unacceptably low…”.
The Commission’s Communication COM(2007) 808 acknowledges that European consumers demonstrate a low level of understanding of financial matters and of basic economics and that, at the same time, the education of citizens in financial matters is becoming increasingly important as innovation and globalisation are increasing the range and complexity of financial services on offer.
Also empirical evidences support the claim that financial literacy levels are low. The current crises and the increasing number of bankruptcies declared by individuals all over Europe sustains this conclusion.
Thus, it seems safe to say that financial illiteracy is a common problem to all EU member states that needs to be addressed properly.
Nov. 2012 - Oct. 2015