Financial Education in Germany: Redirecting Household Investments

In contrast to other advanced economies that are becoming increasingly financialized, Germany’s economic growth model is based on exports and savings, and its existing and potential household wealth is not channeled through financial markets and does not directly rely on them to grow. Germany’s economy is performing well, but its households feel the pinch of zero-bound interest rates on their private and public savings. Attempts are afoot to bring them into line with global trends in financial literacy, teaching people how best to manage their debts and assets, invest and diversify. They encourage them to make use of things like risk diversification, which requires investing broadly and globally, and compound interest, which implies regularly reinvesting one’s money rather than leaving it in a savings account. In so doing, they promote habits that would pit German households against the way in which their collective pools are currently managed. The battle over who or what determines household interests and directs household investments in the era of financialization – having been settled in most advanced economies through the coordination of national financial sectors with global market exigencies – is still being waged in Germany. Financial education is a key battleground upon which its progress and ramifications can be studied. My fieldwork will include attending public workshops and seminars that impart financial advice, and analyzing their contents as well as responses to them; interviewing financial consultants as well as people seeking financial advice; and collecting oral financial histories of near- or recent retirees as counterparts to formal financial lifecycle models. It will be guided by questions such as: which household economic practices are being problematized and why? How are household interests being framed and understood? What do households gain or lose by following the imparted financial guidelines? And what or who are the other stakeholders in the redirection of their investments?