The State of Financial Literacy in Israel: The Reality Behind the Average
- Amit Smaja
- 6 days ago
- 4 min read
Financial knowledge is power - but only when it’s accessible, clear, and turned into action.
Beyond the National Average - A Complex Financial Landscape
A new study by the Bank of Israel reports an average national financial literacy score of 64 - a figure that seems stable, yet masks deep disparities between different population groups. Rather than reflecting a picture of stability, the average hides a reality in which knowledge and financial behavior vary dramatically across sectors, age groups, and income levels.
The study examined financial knowledge, financial behavior, and attitudes toward money. It found that financial gaps in Israel stem not only from individual decisions, but also from structural, cultural, and educational factors. The result is widespread financial uncertainty, difficulty making informed financial decisions, and a growing sense of economic insecurity.
The Arab Population: The Most Pronounced Gap
The most striking finding concerns the financial literacy of Israel’s Arab population. While non-Haredi Jews scored an average of 67, the Arab population scored just 54 - a gap equivalent to nearly an entire generation of financial capability.
What makes the gap even more concerning is that it persists even when controlling for income, education, and age. In other words, even Arabs with similar socioeconomic profiles to Jews display significantly lower levels of financial literacy. This points to deeper cultural, linguistic, and accessibility barriers.
A key example is the linguistic challenge: most financial content, digital banking tools, government forms, and financial platforms in Israel are available only in Hebrew. This reduces the ability to understand basic financial products, plan ahead, or operate independently, and increases dependency on external parties.
The Gender Gap: Women Lag Behind in All Measures
Another meaningful disparity is the gender gap. Men in Israel score 6 points higher than women in the overall financial literacy index - double the average gender gap in OECD countries. The gap is even more significant in financial knowledge, with a 14-point difference.
However, complementary data from public surveys shows the gap is even deeper in practice: only 16 percent of Arab women manage their finances independently. This reflects widespread economic dependency on others, which increases exposure to financial risk, reduces transparency, and can even lead to direct financial harm.
The Income Gap: Wealth Enables Knowledge
The study found that the largest disparity relates to income. High‑income earners scored 19 points higher than low‑income households - nearly double the average gap across OECD countries.
This creates a self‑reinforcing cycle: those with higher income have greater access to financial tools, advice, and information. Those with lower income are more likely to pay high fees, take expensive loans, and face instability. Lack of financial knowledge leads to poor behavior, which leads to higher expenses, which further erodes financial capability.
A Unique Israeli Phenomenon: Young Adults Score Highest
One of the most meaningful findings is that young adults in Israel score higher than older adults - the opposite of the global trend. In most countries, financial literacy increases with age as experience accumulates. In Israel, the 18-29 age group scores significantly higher, especially in financial knowledge.
This unusual pattern reflects a digital generation exposed to vast amounts of financial content through social platforms and online media. Yet the challenge remains: although young Israelis know more, they struggle to turn that knowledge into real‑life financial behavior. Only 21 percent of 20-44‑year‑olds fully manage their own finances.
They know - but struggle to act.
Economic Consequences: What Happens When Financial Literacy in Israel Is Low?
Low Financial Resilience
During periods of economic stress, rising cost of living or post‑war instability, individuals with low financial literacy struggle the most. They take high‑interest loans, fail to compare options, and lack the tools to prepare in advance.
Dependency on Others
Many individuals outsource their financial decisions: 18 percent of Israelis rely on someone else to manage their money. This reduces independence, increases vulnerability, and limits the ability to build long‑term stability.
Missed Opportunities
Poor financial literacy leads to long‑term losses: unnecessary fees, unused tax benefits, lack of savings, and failure to utilize basic financial products.
Mental Health Strain
Financial uncertainty is strongly linked to stress, anxiety, and even depression.
Without clarity or control, financial strain becomes emotional strain.
What Can Be Done? Policy Steps for Real Change
Practical Financial Education from a Young Age
The study highlights that real progress begins with education. Not theoretical instruction, but practical tools: reading a payslip, building a budget, understanding interest, and distinguishing between saving and investing.
Cultural Adaptation
The Arab population needs culturally and linguistically adapted financial content. Accessible financial tools and translated platforms are essential to close systemic gaps.
Reducing the Gender Gap
Women should be empowered with accessible financial education, tools, and resources. Financial independence must become a social norm.
Simplifying the Financial System
Israel’s financial ecosystem is complex. Simplifying processes, improving transparency, and making information easy to understand are critical steps to improving financial decision‑making.
How EchoNomics Fits into the Picture
The study presents the challenge, EchoNomics provides a practical solution. The platform transforms personal financial data into clear insights and provides tailored, actionable guidance.
EchoNomics helps users understand where they stand, what needs improvement, and which steps can drive meaningful progress. For young adults, who possess theoretical knowledge but lack real‑world application, EchoNomics serves as the bridge that turns understanding into action. By combining peer comparison, personalized recommendations, and a supportive community, the platform creates an environment that encourages consistent, informed financial decisions.
The platform turns knowledge into action. It gives users the tools to move from awareness to real change.
Conclusion: Knowledge Is Power - But Only When Accessible
Israel’s financial landscape is complex. Averages look stable, but the disparities are deep. Without financial education, accessibility, and simple guidance tools, large portions of the population will continue to operate in uncertainty.
EchoNomics was created to change that. To make personal finance understandable. To give every individual, regardless of background, the ability to make smart financial decisions and build long‑term stability.
The challenge is significant, but with the right tools, it can be overcome.
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