Financial Literacy, and Why Knowledge Alone Rarely Changes Behavior
Financial literacy is knowing how money concepts work. Multiple meta-analyses show that literacy education alone explains very little of what people actually do with money.
This is one of the best-evidenced findings in the whole dimension, and it is a cautionary one. A landmark meta-analysis (Fernandes 2014) found financial-education interventions explained only ~0.1% of variance in financial behaviors, with effects decaying within months; later meta-analyses (Kaiser 2017; Miller 2015; Menard 2017) converge on the same conclusion while noting that narrow, 'just-in-time' education tied to a specific decision works better than broad courses. We grade this A because the evidence consistently shows the LIMIT of knowledge-only approaches, not because literacy education reliably changes behavior.
- 'If I just learn enough about money, my finances will fix themselves' (knowledge is necessary but far from sufficient)
- 'Financial literacy scores predict wealth' (the measured link to behavior is small and fades over time)
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Every source below carries its own grade and links to the original study. This is the audit trail.