What is the primary purpose of financial literacy?

The primary purpose of financial literacy is to equip individuals with the knowledge and skills necessary to make informed financial decisions. This includes understanding various financial concepts, such as budgeting, saving, investing, and managing debt. By developing financial literacy, individuals can better navigate their personal finances, plan for the future, and make choices that align with their financial goals.

Financial literacy helps people discern between different financial products, recognize potential pitfalls, and maximize their financial opportunities. It empowers them to ask the right questions and seek advice when necessary, ultimately leading to improved financial outcomes and security.

The other options either imply behavior that is contrary to the goals of financial literacy—such as increasing spending or promoting high-interest loans—or describe a negative impact on consumers, which does not align with the principle of fostering understanding and informed decision-making in financial matters.