Abstract

Financial literacy is recognized worldwide as a crucial tool in increasing individuals’ abilities to make sound financial decisions in their lives and in improving national economic well-being. Most financial-literacy education (FLE) programs assume that financial education leads to financial literacy which then leads to good (or improved) financial behavior. The relationship between FLE and financial literacy has been credibly established, but there is little evidence yet to suggest that increased financial literacy leads to improved financial behaviors. The relationship between financial knowledge and financial behavior is inherently complex and difficult to measure. However, the current lack of evidence and consensus on best practices for how to affect financial behavior undermines FLE as a project because its relevance depends on adoption of tools and processes that demonstrably correlate with improved financial behaviors. In this article, the authors question the “rational choice” assumptions of orthodox financial-literacy education and discuss how cognitive biases and culturally based contexts affect financial decisions, making the creation of programs that address financial behavior a “wicked problem.” We propose that three design factors may facilitate the development of behaviorally inflected financial-literacy tools and materials: 1) user, 2) design process, and 3) visualization. We speculate that the finite small-scale effectiveness of generative tools, including those deployed in MoneyWorkshop may be productively combined with Narrative Visualization methods to produce more widely disseminable (and potentially testable) tools, materials, and programs to support financial literacy for financial behavior change.