Janet, One Month Later
A month ago I introduced you to Janet, a resident who scored in the 98th percentile on a numeracy-based financial literacy assessment while living in her car. I mentioned that Fernandes et al. (2014) found measured financial knowledge explains only about 0.1% of the variance in actual financial behavior.
I keep coming back to that number, because it’s the cleanest possible explanation for why “just teach people the math” doesn’t work at scale. If knowledge barely moves the outcome, and yet knowledge is almost all generic financial literacy programs measure and teach, we’ve built an entire field around the wrong lever.
When I say “crisis-informed financial literacy,” this is what I mean, at the core: financial competency that’s built around a person’s actual situation and constraints, not their numeracy score. Janet didn’t need more math. She needed navigable steps toward housing. That’s not a lesser form of financial literacy. It’s the more accurate one, for someone in her situation.
If you’ve been following this series, has anything shifted in how you’d define financial literacy for the people you work with?
Author: Sandra Roussel
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