Financial Literacy Is Not Enough: The Gap Between Knowing and Doing

We often hear that financial education is the key to financial freedom. We teach people how to budget, explain credit scores, encourage saving, and introduce debt-reduction strategies. These are all important lessons. But I have been considering a deeper question: What happens when people know what to do financially but still struggle to do it?

As the founder of Kingdom Wealth Dominion, I see financial education as an important part of my mission. However, my studies in instructional design have challenged me to examine whether providing information is always the most effective solution.

Consider a parent who understands the importance of saving but has very little money remaining after paying rent, utilities, transportation, and groceries. Is the problem necessarily a lack of financial knowledge? Or could the real challenge involve insufficient income, competing responsibilities, and limited financial flexibility?

This distinction matters because knowledge and performance are not the same.

The Consumer Financial Protection Bureau (CFPB, 2017) recognizes that effective financial education involves helping people bridge the gap between knowledge, intentions, and actions.

I believe financial education must move beyond teaching people what a budget is. We should also explore whether they have the resources, confidence, support, and opportunities necessary to use that budget successfully.

As an instructional designer, I am learning to begin with the problem rather than immediately designing a solution. Before developing another financial-literacy workshop, I would want to understand the barriers participants experience in their daily lives.

Perhaps some participants need instruction. Others may need personalized coaching, accessible financial tools, community resources, or opportunities to practice making financial decisions.

Financial empowerment should not end when someone understands the lesson. It should help them apply what they have learned.

Let’s Discuss

Have you ever known exactly what you needed to do financially but struggled to follow through? What stood in your way?

Reference

Consumer Financial Protection Bureau. (2017). Effective financial education: Five principles and how to use them. https://www.consumerfinance.gov/data-research/research-reports/effective-financial-education-five-principles-and-how-use-them/