Overall levels of financial literacy […] are relatively low. Average levels of financial knowledge show room for improvement […].

(OECD, 2016, p. 7-9)

In the light of changing demographics and the prolonged low-interest rate environment, long-term saving decisions by individuals become increasingly important. Saving optimally over one’s life-cycle requires knowledge and competencies that many people have never acquired, yet everyone has to make these decisions for himself. Aside from basic financial knowledge, such as time value of money or the interplay between risk and return, life-cycle saving and investment decisions require additional concepts and considerations, such as human capital, decisions regarding housing (rent or buy), inflation and how to protect your wealth against it or the impact of certain risks (e.g. occupational disability) and how to protect against such risks, to name just a few important examples.

Optimal life-cycle saving and investment decisions require concepts that go beyond the time value of money and the trade-off between risk and return.

The project “Understanding Saving in Europe (USAVE)” develops online courses, which allow participants from two different target groups to acquire the necessary knowledge and competencies in the field of life-cycle saving and investment. One course is targeted at the general public, and requires no specific prior knowledge. The other online course is targeted at students of finance, economics, or related disciplines at higher education institutions. Both courses can be taken free of charge, whenever participants have the time to do so, at the participants’ own pace. Both courses will be supplemented by online software applications, which can be used to carry out calculations without the need to spend a lot of time on understanding the formulas in the background (course 1, targeted at the general public), or the need to spend a lot of time on coding (course 2, targeted at students).

Knowledge in and understanding of personal finance are key for optimal life-cycle financial planning and decision making.

The main goals of both courses are to improve the participants’ understanding of long-term personal finance decisions and to equip them with the competencies that are necessary to set up and periodically revise/improve their own life-cycle financial planning. The second course (targeted at students) digs deeper and discusses also the theoretical underpinnings, methods, and formulas behind the concepts and online apps provided.