A systematic approach to cultivating financial knowledge and financial decision-making skills. It implies the use of appropriate pedagogy, learning objectives and assessment techniques, as well as being of adequate duration to allow the learner to incorporate new knowledge into their existing schema.
A variety of tools, resources and activities that inform the individual about a topic or decision.
Examples include small-dose lessons not part of a broader program or curriculum, articles or reference
resources, tips and tricks, calculators and decision aids.
They often are used in self-directed inquiry or in conjunction with behavioral interventions. They can and
should be used as a part of a financial education program or initiative, but on their own do not constitute
education as they lack pedagogy, learning outcomes and assessment techniques as well as sufficient
duration for the learner to fully assimilate the information into lasting knowledge.
Financial Well-Being [aka Financial Wellness]
Self-defined by the individual.
Typically includes elements such as satisfaction with ability to manage current situation, ability to exercise choice, feel in control and future prospects.
Financial Actions and Outcomes
The decisions made and actions taken by the individual, as well as the resulting outcomes and impacts of
any external shocks.
Outcomes can be objective (e.g., credit score) or subjective (e.g., confidence). Shocks can be positive (e.g., work raise) or negative (e.g., large health care bill, fraud).
There is a feedback loop between actions and outcomes.
The individual’s ability to act in their own self-defined best interest.
It is comprised of two key elements:
- The knowledge and expertise to decide or act (aka financial literacy)—can be built through external knowledge interventions or self-directed inquiry and experience.
- The ability to exercise choice or take action (aka access to appropriate financial instruments).
The individual’s general skills and abilities (e.g., critical thinking) and external
factors (e.g., economic inequality, health).