What is a consequence of poor financial literacy?

Poor financial literacy can lead to significant challenges when it comes to managing one's finances effectively. Difficulty understanding debt obligations is a common consequence because individuals lacking financial knowledge may not comprehend the terms, interest rates, and potential repercussions associated with borrowing money. This misunderstanding can lead to poor decision-making, such as accumulating unmanageable debt, failing to make timely payments, or not recognizing the long-term effects of high-interest loans.

In contrast, the other choices highlight positive outcomes that would typically arise from strong financial literacy. Increased investment opportunities, improved budgeting skills, and enhanced saving techniques are all indicative of a solid understanding of financial principles. However, those who struggle with financial literacy are less likely to achieve these benefits and instead may find themselves unprepared to navigate the complexities of personal finance effectively.