Introduction to the Handbook

Financial literacy is an important precursor of positive financial outcomes and is crucial for good financial functioning in an ever-changing economy. Because young people acquire knowledge and develop skills that influence future behavior, the importance of financial literacy in emerging adulthood should not be understated. In the literature, financial literacy comprises a range of concepts including financial knowledge, skills, attitudes, and behaviors, but some also state that financial literacy should be considered not as the goal but rather as the means to favorable financial behavior and well-being. Thus, the chapter provides a narrative review of extant definitions of financial literacy, how its aspects could be interrelated, and presents two models that consider financial literacy within the financial socialization paradigm. Finally, it discusses how financial literacy relates to other constructs, how it could be measured, and what we should consider when working with diverse emerging adults in fostering their financial flourishing.