A teacher who spends more than earns and is vulnerable to loan sharks lacks what kind of literacy?

• A. Financial literacy
• B. Digital literacy
• C. Civic literacy
• D. Media literacy

Answer: (A)

Financial literacy is the ability to manage money effectively, including budgeting, tracking income and expenses, saving, and understanding how debt works. When someone spends more than they earn and is vulnerable to loan sharks, it signals a gap in budgeting and prudent borrowing—core aspects of financial literacy. With this know-how, a person learns to live within means, distinguish needs from wants, plan for responsible credit, and recognize high-cost or predatory lending, thereby avoiding debt traps and protecting financial stability.

Digital literacy, by contrast, is about using digital tools and technologies effectively. Civic literacy covers understanding government, civic processes, and how to participate as a citizen. Media literacy focuses on critically evaluating information from media sources. These areas don’t directly address personal money management, which is why financial literacy best fits the scenario.