Financial literacy is changing as students and adults both benefit from traditional financial knowledge as well as savvy online skills to make informed decisions.¹ 

Financial education faces an expanding field of digital products and services such as online banks, investment platforms, payment apps, and buy-now, pay-later offerings. It also must keep pace with emerging risks, such as fraud and the sharing of personal information.²

Digital financial literacy combines bedrock financial skills — such as budgeting, saving, investing, borrowing, and debt management — with digital knowledge and safety.³

The topic is becoming more important as younger Americans embrace quick and easy financial experiences. Empower research shows that 40% of Gen Z consumers leave home without their physical wallets, relying solely on their digital equivalent.

Game on 

Purchasing habits start early. A recent survey of 15-year-old students in the U.S. and other countries by the Organization for Economic Cooperation and Development (OECD) found that more than 85% made an online purchase during the last 12 months, with 66% using a mobile phone.⁴

Behavioral economics has a role to play as contactless payments and other technologies make financial transactions nearly effortless. Students are tackling topics like cognitive biases and how emotions and personal values influence financial decisions.^5,6

Gamification is also being used to teach financial literacy to students growing up in the digital age. Such platforms offer diverse formats and game-like features such as achievement badges to better relate to students’ online experiences with money.⁷

Some educators have embraced apps such as The Uber Game, which puts users in the shoes of a full-time Uber driver with two kids to support and a $1,000 mortgage payment.^8,9 The NFL and Visa teamed up on Financial Football, an interactive, 3D game where students advance down the field by answering questions on topics like budgeting and saving, financial products, life events, and identity theft.¹⁰

A recent study by the Government Accountability Office said games, challenges, and other digital tools, such as podcasts and infographics, can enhance student engagement on financial literacy topics.¹¹

Read more: How emotions and mood influence financial behavior

Staying safe 

In addition to managing money, financial literacy must focus on skills like how to protect personal data and spot fraud, the GAO said.¹²

Growing up in the digital age hasn’t made Gen Z consumers less susceptible to fraud. Deloitte’s latest Connected Consumer survey found that Gen Z is more likely than Baby Boomers and other generations to fall victim to scams, including having a bank account or credit card hacked.¹³

A study from EY found that Gen Z prefers seamless payment experiences and is less concerned about data and privacy. Nearly 40% of Gen Z consumers regard using a PIN number on a debit-card transaction to be a pain point.¹⁴

Trusted sources 

Financial literacy professionals say high school courses should include topics like payment and trading apps and digital money, noting that students are hearing about them elsewhere.¹⁵

Rooting out misinformation can be challenging, especially on social media. Content creators and “finfluencers” often brand themselves as money experts and endorse a wide range of products from credit cards to cryptocurrencies to investment strategies.¹⁶

Agencies including the SEC have launched campaigns urging Gen Z and other investors to choose online financial advice and information carefully, while also making them aware of government resources and programs.¹⁷

Despite challenges, consumer financial professionals say that properly vetted online advice can be useful.¹⁸

Parents have significant influence as gatekeepers. Students who discuss financial decisions with their parents are more financially literate than their peers, according to the OECD survey. More than two-thirds of students said they do so at least once a month.¹⁹

Read more: Teens take financial literacy into their own hands: Programs are here to help