Financial Literacy Is Dead — Here’s What To Aim For Instead

It may be shocking to consider, but financial literacy is dead. At least, the way we’ve been talking about it.

Sure, understanding the basics of money is important. But a grasp of the basics is not the solution to the financial challenges many consumers face. As it’s taught today, financial literacy lessons are outdated and ineffective, raising the question: Are we setting too low a bar for the skills people need to accomplish their money goals?

If you memorize a list of Spanish vocabulary words, are you suddenly fluent? Without the ability to hold a conversation, ask meaningful questions or navigate cultural norms, you’d still lack the fundamentals of true fluency. 

The same goes for money. Knowledge is not power unless it’s implemented habitually and intentionally.

What does financial literacy mean today?

Financial literacy is the ability to understand and use basic financial tools and concepts, including budgeting, saving, credit scores and interest. It’s fundamental. But it’s not transformational.

I once taught a workshop on money habits to a group of college students at a top university. One young woman proudly told me that she had a credit card, used it responsibly and never missed a payment.

But when I asked whether she carried a balance or how much she paid each month, she looked confused. “I just pay the minimum,” she said. “Isn’t that good for my credit?”

What she didn’t understand was that her balance of around $1,000 would take years to pay off if she only made the minimum payments. The clothes she’d bought would end up costing her more than double their original prices in interest.

Technically, she was checking the financial literacy boxes, but she was far from financially fluent. Once explained in real-time in the context of her own circumstances, she paid the balance off in full shortly after that workshop.

Why financial literacy isn’t enough

There’s been a lot of buzz about financial education being added to high school curricula. And while I agree that it’s a step in the right direction, it’s not the full solution to climbing levels of consumer debt, the rise of AI and the feeling that many Americans feel worse off than their parents. 

In fact, Bankrate’s 2025 Financial Freedom Survey found that 77 percent of American adults say they aren’t completely financially secure, and nearly half (45 percent) surveyed think they need to earn $100,000 or more annually to live comfortably.

With such a substantial percentage of Americans feeling insecure about their financial health, it’s clear that our efforts toward financial literacy are insufficient. Here’s why:

• Financial literacy is often transactional and focused on memorizing terms, not understanding context or strategy.
• It doesn’t account for modern financial challenges like student loan debt, the gig economy or rising housing costs.
• It rarely addresses the emotional and cultural dimensions of money — shame, family beliefs, consumerism and mental health. According to Bankrate’s 2025 Money and Mental Health Survey, Americans who say money is negatively impacting their mental health are three times more likely to have paid a bill late over the past month.

Financial literacy teaches consumers how to follow the rules and keep their heads above water, not how to build wealth. I like to compare financial literacy to playing basketball — just because you’ve learned the rules and even studied the playbook, doesn’t mean you’ll know how to maneuver during critical times in the game.

It’s time to level up to financial fluency

Financial fluency is the ability to understand, apply and communicate about money in a way that’s personal, intentional and strategic. Fluency goes deeper than just numbers. It includes your:

When you’re financially fluent, you can explain how your investment accounts work, anticipate your tax liability, ask relevant questions of your advisor and control how money flows in and out of your life.

More importantly, financial fluency means knowing how to pivot instead of panic during stressful financial times. If you lose your job, endure an expensive emergency or plan to expand your family, simple financial literacy may not be enough to help you navigate uncharted territory.

My starting point

At 28, I was earning a six-figure salary, paying my bills on time and contributing to my 401(k). I checked all the financial literacy boxes.

But I also had over $300,000 of debt between student loans and a mortgage, and I had no idea how I was going to retire or afford a life I actually enjoyed.

It wasn’t until I learned how to read amortization schedules, confront the cultural trauma and scripts behind my spending and understand how taxes, retirement accounts and building additional income streams worked together, that I became fluent.

Your new goal post: financial freedom

Financial freedom isn’t just about having “enough” money. For me, it’s about waking up without financial anxiety. It’s saying “no” to situations that drain you and “yes” to the opportunities that grow both your self-worth and net worth.

Here’s what financial freedom can look like:

• You don’t need a paycheck to survive.
• You can afford to walk away from toxic jobs or clients.
• You have time to rest, care for your health and pursue your purpose.
• You invest in endeavors that align with your values and vision for the world you want to live in.
   

When you know better, you do better

By the age of 40, my husband and I had paid off all our debt, built a $2 million investment portfolio and are now entertaining early retirement, driven by our discovery of the FIRE movement. We navigated this as first-generation Filipino Americans with no inheritance and no financial literacy education at home or in school.

Now, we work because we want to — and because we love helping others accomplish their financial goals. We travel the world, invest in businesses that align with our interests and coach people who want more than just the bare minimum.

Because we skipped literacy and aimed for financial independence, we became fluent along the way.

How to rewrite your financial standards

Financial literacy is knowing the words. Start by getting acquainted with your current financial circumstances and filling in the gaps in your knowledge.

• Are you financially literate?

  • • Do you have a list of all the accounts with your name on them that have money flowing in or out?

  • • Do you know the interest rates of all your debts, including credit cards, car loans, personal loans or mortgages?

  • • Do you know the value of all the assets you own?

  • • Do you track your expenses regularly?

Financial fluency is speaking the language. Take that vocabulary and apply it to your real life. Learn how to make money decisions that reflect your values, lifestyle and well-being. Ask yourself:

• Are you financially fluent?

  • Do I know how to explain my financial goals clearly — to myself and others?
  • Do my money decisions align with my risk tolerance?
  • Can I confidently ask questions of a financial advisor, tax pro or lender without feeling intimidated?
  • Do I understand how my taxes, investments, debt strategy and income all connect?
  • Do I feel confident in my ability to emerge from stressful financial situations successfully?

Financial freedom is rewriting your own story and living it. This is where you employ money habits that make your own version of a wealthy life a possibility. Consider:

• Are you financially free?

  • Can I cover my needs and wants without stress or guilt?
  • Do I have enough flexibility to take a break, walk away from unfulfilling work or take care of loved ones without sacrificing my own progress?
  • Am I making money decisions that are building a future I actually want — not just one I feel stuck in?
  • Do I have the time, energy and money to invest in the best health outcomes for me?
  • Am I creating a life that is unique to me, or am I copying someone else’s script?

Final thoughts: Shoot higher and you’ll land further, even if you fail

Here’s my unpopular but honest opinion: If you’re aiming for “financial literacy” as your finish line, you’re already short-changing yourself. When you aim for financial fluency, and eventual financial freedom, even your “failure” ends up better than most people’s goals.

Because the reality is that when you aim high, you’re building not just knowledge, but power, resilience and peace. So what if you fall a little short? You still land way ahead of where you started.