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April 2016

Are neurotic, extraverted youths in more need of financial education?

Pablo Peña's picture

Every day more and more people in the world have access to financial services. In the minds of many, that poses an important risk. People need financial education, particularly in the form of information, to prevent them from making dangerous financial mistakes. They need to be aware of fees they pay, the interest rate charged by their credit cards, and important clauses in the contracts they sign.

The funny thing is, not even people we consider financially savvy know those things. I put these kinds of questions to 30 Mexican economists, all PhDs working in the financial sector or in academia. 38% did not know the APR of their credit cards. 66% did not know approximately how much they paid last year in fees to retirement fund managers. 72% claimed they do not usually read the fine print in bank contracts.