Numeracy Is Only a Fraction of the Story: A Mixed Methods Study Exploring the Role of Numeracy and Other Skills Among Low-Income Participants in Canada and the UK

Abstract

Financial literacy is the knowledge people have about their finances that enables them to capably manage their household finances. There is considerable literature on how to conceive and measure financial literacy (Lusardi and Mitchell 2023). But the indicators and measurement of financial literacy for people with low-income is contested (French & McKillop 2016). This is partly because the standard indicators of financial literacy (the 3 or 5 standard questions) involve certain types of numeracy skills. Some argue that numeracy is irrelevant to financial capability (French & McKillop 2016). Others argue that competency with numeracy is a critical ingredient in financial literacy (Skagerland et al. 2018). By using the financial diaries methodology and qualitative interviews in Canada and U.K., this project seeks to address this tension in the literature by considering these questions: Is numeracy important for participants’ ability to manage their finances? If so, in what ways? Are there other complementary or competing skills that people with limited means use to manage their finances?