FINANCIAL literacy is not about being great at maths — it is about common sense.

This was the key message at the Federal Reserve Bank of Chicago/Visa financial literacy summit held in Chicago last week, during which people from a range of think-tanks wrestled with the major issues plaguing consumers and the global financial services industry.

The global financial crisis was a great leveller. Suddenly, the belief that after a lifetime of hard work you can pass on a better quality of life to your children had evaporated.

Richard Cordray, director of the US Consumer Financial Protection Bureau, said many people did not understand the consequences of their choices when it came to handling money.

“It is the antithesis of education to consign each generation to repeat the mistakes of the previous one.”

Culture was a major factor in determining one’s financial literacy, speakers said.

“A skills lack can be hidden in a family environment where everyone lives together. People spend money they don’t know what to do with,” said Amira Salah-Ahmed, a personal finance journalist from Egypt.

“There are cultural obstacles to women having access to financial products and exercising their know-how. Single parenthood and other issues are notoriously difficult for rural, marginalised women,” said Linah Mohohlo, governor of the Bank of Botswana.

“They spend money on their families and not enough on saving for retirement,” said Mara Luquet, a personal finance journalist from Brazil.

Simple education could help. Children could be allowed to control a small investment, learning to make mistakes before the stakes become too high. Learning to put part of an allowance aside and controlled access to credit could teach a child the value of sound financial management.

For women — who usually outlive men, earn less and often have to shoulder both family and household budgeting responsibilities — it could mean finding some uncomplicated way to put money aside, such as a stokvel.

“All you need to know is you should save part of what you make towards the future,” said Adina Chelminksy, a personal finance journalist from Mexico.

“This will help you ask the right questions about any product.”

The infrastructure available in a society also affected financial literacy, speakers said .

“Unbanked adults in Pakistan make up 88% of the population. Only 5% of women have bank accounts. They need to be brought into the net,” said Yaseen Anwar, governor of the State Bank of Pakistan.

Participants agreed that telecommunications networks could bring financial services to people by enabling cashless loans and an electronic, branchless network. However, there is a need for trust and integrity behind such innovation.

Very often, the first point of contact that economically marginalised people have with formal financial service is micro-lending, and bad experiences can put people off other offerings.

Financial literacy is an issue that the US is only coming to grips with now. In 2011, the Consumer Financial Protection Bureau was established to influence policy and regulation and act as a watchdog for consumer rights. The motivation was addressing what went wrong before the financial crash.

As part of its role as a consumer body, the bureau has a website with a multitude of tools and resources, including 930 Q&A topics on everything from comparing university loan offers to taking out a mortgage. It also offers a consumer hotline for advice and complaints. The bureau bridges the gap between people’s actual financial capability and the complexity of financial products.

Berni Ripoll, parliamentary secretary to the treasurer in Australia, said lenders were now legally obliged to print certain information on debt statements sent to customers.

“They are required to display how much you owe, how long it will take to pay off at the lowest instalment and how much you would have to pay per month to pay off the outstanding balance in 12 months.

“It’s an instant lesson in the value of paying more than the minimum instalment. Most people realise they’ll be paying off credit card debt for years at their current rate.”

Where every country could do better is in the classroom, in which there is the best chance of delivering unbiased information that will help young adults to avoid pyramid schemes and questionable lending, as well as breaking bad spending habits.

Only four US states require school children to take a financial literacy course as part of the curriculum.

*This article was first published in Sunday Times: Money & Careers