Financial literacy: building a conceptual framework

Financial literacy is now globally acknowledged as an important element of economic and financial stability and development. Many researchers and organizations focus their efforts on the issues related to its evaluation and improvement. However, in the initial stage of any research an analysed concept should be clearly defined an explained. A plenty of competing definitions is offered by different authors. Thus, the main goal of the current research was to provide a deep understanding of the concept of financial literacy, specifying its key elements. To achieve the established goal, an analysis of the textual information was performed, using software AQUAD 6.0 and Hamlet II. Information data base included 52 definitions of the term ‘’financial literacy’’ and the related terms proposed by individual researchers and organizations, such as OECD, EIOPA, ACIS and others. Completing the procedure of open-coding, the main directions of the research are detected: (1) analysis of key domains of financial literacy, which are knowledge, ability, attitude, and behaviour; (2) analysis of key aspects of financial literacy, e.g. numeracy, debt literacy etc. Analysis of frequencies within the framework of content analysis assisted authors to detect main elements of financial literacy and to define the most important competencies for financially literate behaviour. The results of content analysis provided by AQUAD and analysis of joint frequencies provided by Hamlet were used to perform the further analysis of the information, using hierarchical clustering technique. Diversified exploration of the concept of financial literacy allows constructing a platform to expand the horizon of its understanding. The received results will be used by the authors to develop a framework for assessing financial literacy level in Latvia