Financial Literacy vs Financial Wellness – a Consumer’s View

Credit unions and banks across the country have financial literacy on their to-do list, but what consumers need/want is a roadmap to financial wellness, not just financial literacy. Well, what’s the difference?

Financial literacy is about understanding money basics. Typically the curriculum includes topics like “how to balance your checkbook,” “what is a savings account,” “what is a money market account and a certificate of deposit” and what are the different loan products with possible information on how to apply and how to qualify for a loan. Sometimes the topics include information on the credit report, what is a good credit score, and maybe strategies on how to improve credit scores.

The financial wellness curriculum is hands-on, real-life, real-experience training. It teaches consumers how to use money, credit, and debt appropriately to improve their lives. It deals with the strategies and tactics on how to save, borrow when it is appropriate to borrow, spend, and, most importantly, thrive versus surviving financially. This curriculum is not about learning what a credit card is but learning how to use credit wisely, not about what a savings account is but how to create a savings discipline and find money in your cash flow to save. It’s not what money is but how to manage the inflow and outflow of funds to manage your cash flow.

Why is this distinction important to credit unions and banks?

Banks and credit unions learned in 2008 how unsuspecting consumers were when it came to using money and credit. We discovered a large number of consumers honestly believed the myth if the bank loaned them the money for a mortgage, I must be able to afford it. Consumers honestly and naively thought that they could afford to use that sizeable available credit card balance without considering the cost of paying back that revolving loan. They honestly believed they could wait longer to start to save for a rainy day or retirement.

Because of this naivety, consumers’ lives were severely strained. Families lost their homes; retirements ended or were significantly delayed. The encore career became a new lifestyle—the effect of financial stress severely impacted family health and well-being. Marriages were completed, and families were broken up. The impact of financial strain on our health has been documented and is measurable.

Also, because of this naivety, credit unions and banks suffered massive losses from uncollectible debt. It caused many financial institutions to shut down or be acquired because they were failing. Even with the financial literacy programs the financial institutions were running, they couldn’t keep consumers from making bad financial decisions. It didn’t change their misperceptions about money and credit.

Financial wellness, on the other hand, gives the consumer the strategies and tactics they need to be better consumers of loans, credit cards, mortgages, saving, checking, and debit cards. When consumers know how to use the money, spend, save, and borrow smartly and use mobile banking, online banking, and personal financial management tools to implement their money strategy, they will be more successful financially – attain financial wellness. We all know that if our members and customers are economically successful, our credit union and the bank will be successful. The result is a circle of prosperity.

Is it time for banks and credit unions to restructure and realign their financial literacy investment into a financial wellness investment? Because the financial wellness curriculum is about using the money appropriately, the long-term win for the bank or credit union, the impact of this initiative can be measured through balance growth, interchange income, product adoption, member/customer engagement, loan losses, and provision expense. So, how do you measure your financial literacy program?


Rich Jones is the Founder/Principal of Leading2Leadership LLC. Before starting his strategic planning agency, he spent over 20 years in leadership roles in the financial services sector. Before becoming an executive in the financial services sector, Rich was an entrepreneur, building and selling two businesses and working for early-stage start-up companies in executive roles in marketing, business development, and seeking investment partners. With more than three decades of experience, he brings innovative thought to companies and executives. Rich published “Leading2Leadership, a Situational Primer to Leadership Excellence.” The book is available on and was designed to be used as a book study for leadership development programs; it breaks leadership skills into manageable situations for discussion and reflection. Rich works with credit unions, CUSOs, and vendors, designing digital, data, culture, marketing, and branding transformation strategies. In 2014, Chosen as a Credit Union Rock Star by CU Magazine, and in 2018, Rich received the Lifetime Achievement Award from CUNA Marketing and Business Development Council. A Marine and graduate of Colorado State University, Jones shares his expertise at

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