April is financial literacy month, but what exactly is financial literacy, and what does it mean for us? Everyone has different levels of experience with financial products, terms, and organizations. We also have different levels of confidence with using them. University of Maryland Extension has a team of personal finance educators offering educational workshops and trainings across the state. Learn more about our programs on our website.
Let’s discuss some different financial health measures and how we can use them to evaluate our own personal finance situation.
Financial literacy is personal finance knowledge. It is what we know about topics including saving, investing and debt, and insurance, along with related concepts such as interest rates and creating budgets. Financial literacy also measures our ability to make informed decisions about financial products like investment accounts, loans, health and life insurance, and more.
The idea of financial literacy education assumes that if individuals have more financial knowledge, they will manage their financial resources better and have a stronger sense of financial well-being. How is your financial literacy? You can take some self-tests and find out.

Financial confidence. Financial confidence is a different measure than financial literacy. The problem with financial literacy measures is that we can have knowledge about something, but still feel uncomfortable using that knowledge to grow or protect our money. As the term implies, financial confidence describes how comfortable an individual feels about managing their finances. For example, we can know how about savings accounts and the importance of emergency savings. We could know how to compare interest rate yields. However, if someone fears going into a bank or is not comfortable talking with a bank representative about opening an account, the knowledge, or financial literacy, is not helping them achieve their goals.
Financial empowerment is a frequently used term. Financial empowerment combines the concepts of financial literacy and financial confidence. According to the Consumer Financial Protection Bureau, financial empowerment means you’re both informed and skilled. The sense of empowerment builds confidence, helping you effectively use your financial knowledge, skills, and resources to reach your goals. Try this financial empowerment assessment tool.
Financial wellbeing is another important personal finance measure. Financial well-being determines how much your financial situation and money choices provide you with security and freedom of choice. It is a measure of how you feel about your money situation and your sense of control over your finances, regardless of how much money you have. There is a widely used financial wellbeing self-test which you can take at https://www.consumerfinance.gov/consumer-tools/financial-well-being/. You can read more about financial wellbeing and the self-assessment here.
How do you feel about the results of these assessments? Do you want to know more about financial products, or are you with an organization that helps people manage their resources? University of Maryland Extension has educators, programs, and resources to help. Connect with us to partner together on our journey.