Do Hungarians speak ‘finance’?

 Written by Melinda Cooper 

While multiple statistics show that Hungarians have some of the lowest levels of foreign language literacy skills in the world, the situation seems to be very different when it comes to their knowledge of financial literacy.

The latest global financial literacy survey conducted by the OECD ranks Hungary somewhere in the middle amongst the 24 countries that took part in the survey.

But what can we conclude from this? Does this mean that Hungarians have plenty of money as a result of their high financial literacy skills?

Unfortunately, not at all.

Financial literacy does not refer to the level of financial wealth, but to the way in which money is managed.

The questionnaire used by the OECD for this survey is split into three sections: knowledge, behaviour and attitude. The first section relates to the theoretical knowledge of financial terms and processes, the behaviour section has questions about how one spends their money, and the attitude relates to the forward planning (such as pensions and investments)

Looking at these 3 individual measures gives a clearer picture of what is going-on with the Hungarian population.

While Hungarians rank exactly in the middle for financial knowledge skills, they have the second worst score (behind only Italy) for financial behaviour, but jump significantly up in the league table for financial attitude – ranking 4th behind Indonesia (top), Slovenia and then Malaysia. 

Digging deeper in the report, we find another area where Hungarians are lacking behind other nationalities. This is the section about keeping control of money, such as keeping a record of expenses and avoiding indebtedness mainly due to regular and conspicuous consumption. Sadly, Hungarians are at the bottom of the table here, suggesting that we are indeed exposed to significant levels of indebtedness.

Low financial literacy is a global concern, that became mostly evident during the 2008 financial crisis and has not shown great improvement since, despite the numerous programs in the last two decades supported by governments and private organisations that were meant to improve financial literacy within the population.