Financial Literacy Won’t Save You

You can know exactly how compound interest works and still be drowning in debt. The problem isn’t your ignorance—it’s the system.

Financial literacy is a good thing. But when it’s used as a substitute for real change—or to shift blame onto people who are struggling—it becomes something more toxic. Here’s why knowing more isn’t always the answer.

There’s this idea that if you just knew more about money, you’d be fine. If you only understood how mortgages worked, or what an ETF is, or how to build a budget, you’d stop feeling stressed. You’d stop making mistakes. You’d finally get ahead.

It’s a seductive idea. It feels empowering. But it’s also wrong—or at least, incomplete.

Because knowing things doesn’t mean you’ll do things. And even when you do the right things, the system is still stacked against you.

In my financial planning practice, I meet with people all the time who feel ashamed for not knowing more. They’ll say, "I feel so dumb for not knowing how a Roth IRA works." Or, "My parents always said credit cards were bad, but I never really understood why."

You know what I tell them? Of course you don’t know. Why would you? This stuff isn’t taught in school. And the people who benefit from your confusion have spent decades making the rules more complicated, not less.

Take mortgage advice. One couple I work with recently got a mortgage, and one set of parents (including a financial advisor!) keeps telling them to pay it down aggressively. Avoid debt. Pay extra every month. That advice sounds good. But in their situation, those extra payments might be better spent elsewhere—on time together, on giving to mutual aid, or on work that aligns with their values. Financial literacy doesn’t help much if it doesn’t account for real-life tradeoffs.

Or take overdraft fees. Banks make billions off them. You think that’s because people just don’t understand how checking accounts work? Or is it because life is expensive, and people are busy and overwhelmed and can’t check their balance five times a day?

Or take Citibank, which lobbied to repeal usury laws so they could charge sky-high interest rates. Now they send mailers from Sioux Falls, South Dakota—a direct result of those lobbying efforts. And then they turn around and sponsor financial literacy campaigns to help you "understand" how credit works. They broke the system, and now they want to teach you how to survive it. That’s not generosity. That’s gaslighting.

Here’s the thing. Financial literacy is fine. But it’s not the same as financial agency. It’s not the same as being able to make choices that reflect your values. And it won’t build a safety net in a world where housing, health care, and child care are out of reach for millions.

If you’re struggling to make ends meet, knowing how amortization schedules work won’t help you. What you need is higher pay. You need affordable housing and child care. You need a society that actually supports people instead of blaming them.

Even people who are doing well—people with high incomes and good degrees—can feel overwhelmed. Because organizing your finances takes work. A lot of work. And no one tells you that. They just say, "Be more financially literate." As if that’s the problem.

Let me say it clearly: the system is confusing on purpose. If everyone understood it fully and had the time and energy to act on that understanding, a lot of companies would lose a lot of money. So they keep it opaque. And then they blame you for not understanding it.

So yeah, learn more if you want. I’m a financial planner. I obviously think that knowing more is better than knowing less. But don’t let anyone tell you that financial literacy is a magic bullet. It’s not.