The Death of “Passive Financial Literacy”

Contents

• Background — “Financial Literacy”, a status report

• The Action Gap: from “Financial Literacy” to “Financial Fitness”

• Action Items for “Financial Fitness”

Background — “Financial Literacy”, a status report

Financial literacy is commonly defined as the possession of knowledge, skills, and behaviours. The OECD describes it as having “awareness” of financial knowledge, attitudes, and behaviour, while the US NFEC (National Financial Educators Council) adds the ability to “confidently” make decisions.

As a subject, it didn’t truly capture government attention until the 1990s. Japan published a strategy in 2002, followed by the UK and USA in 2003. In 2008, the OECD established the INFE (International Network on Financial Education), and in 2025 the UAE Central Bank announced its First National Financial Inclusion and Literacy Policies Forum. Financial literacy is a baby of Gen Z, and it is ready to mature.

The Problem

While definitions of “financial literacy” vary in how they mix knowledge, skills/tools, decision-making, and the evaluation of financial choices, what remains absent is an ecosystem that enables these ingredients to come together into something easily consumed by the public. The result is improved understanding of educational needs — but an approach to action that remains static.

This article is a “call to action.”

The Physical Fitness Precedent

In the 1970s UK (with the USA perhaps ahead by a few years), the high street was a “fitness desert,” with only 30 purpose-built fitness centres in the country and a handful of training instructors. Local governments responded by triggering a boom of 4,000 leisure centres to bridge the “Wolfenden Gap” — the drop-off in activity after children left school.

Then came the books. Jim Fixx’s The Complete Book of Running helped transform a niche activity for high-level athletes into a mainstream motivation to view one’s body as a physical balance sheet — not bad coming from an overweight smoker. Jane Fonda’s Workout Book, later a best-selling tape, helped fill the “action gap” between reading and doing. Dr. Kenneth Cooper’s Aerobics added a benchmarking system, giving readers a way to determine whether they were “healthy” or “sick.”

Today, 63% of Gen Z (18–24) exercise regularly compared to 32% of those over 65 (PureGym). Age-related fitness is booming, with age-group runs, swims, and triathlons now mainstream. The performance measurement industry has also blossomed with the rise in data-driven health tracking. The 1970s lacked data; today, fitness and health are ingrained as “positive habits,” evidenced by the 42% of UK adults wearing devices that measure steps, heart rate, and calories — and some even use them to tell the time.

The Action Gap: from “Financial Literacy” to “Financial Fitness”

Dave Ramsey’s The Total Money Makeover is a useful read for the next phase of the financial fitness industry as it seeks to become ingrained in society much like physical fitness has evolved. Imagine the economic impact if 63% of Gen Z and 32% of those over 65 were actively pursuing “financial fitness.”

Ramsey’s book identifies universal needs. We highlight three of them and explore how technology and AI can help turn “literacy” into action.

Opportunity for action #1: The Online Multi‑Jurisdictional Balance Sheet

Ramsey emphasises establishing a net-worth mindset — taking a holistic view of one’s assets and understanding the difference between capital and income. This approach encourages individuals to assemble data from various sources and narrate it into a single, cohesive picture.

While online portals for financial aggregation exist, there is currently no viable multijurisdictional online balance sheet. The opportunity to collect data and structure it so that individuals aggregate/disaggregate information and perform appropriate risk analysis is still in its infancy — especially for people holding assets across jurisdictions.

Opportunity for action #2: The “Education Escalator”

Ramsey frames financial education as a linear progression: you don’t invest until you clear your debts. Around the world, age group training programs are beginning to reflect this staged approach to literacy. There is a growing amount of content appearing in school curriculums to get the literacy going. It is, however, largely fragmented.

The educational sector has an opportunity to build an “Educational Escalator” focused on improving the concept of lifelong learning. Financial stability is not achieved through one decision; like physical fitness, it requires discipline and habit. Different ages also require different actions — the needs of a 20-year-old differ markedly from those of a 60-year-old.

Opportunity for action #3: A Contextualization Library

Ramsey argues that personal finance is 80% behaviour and only 20% “head knowledge.” The goal is to move people away from “abstract math” and toward “psychological wins,” such as the debt snowball method.

This opens the door to a library that explains the why behind the structure of data and lifelong learning. Modern technology and AI could contextualize information from an individual’s balance sheet and turn it into personalized lessons — Ramsey used radio stories for generic explanation. We would expect AI to be able to add more personalised connections between an individual's balance sheet, the lifelong learning escalator, and the library.

Action Items for “Financial Fitness”

Turning these three opportunities into action will require effort from the entire community — from government initiatives and corporate support (through workplace savings and pensions) to school level engagement. As the physical fitness example shows, meaningful change takes time. But a strategy that integrates these areas into an ecosystem focused on individual financial fitness would be of high consequence for any country.

Integration is the key. We start by thinking of an individual’s balance sheet as the “scoreboard” of wealth and financial stability. As with physical fitness, individuals start with varying levels of financial fitness. An integrated system would link their various assets — both individually and as an aggregate — with corresponding forecasts and probability analysis.

Linking this with health data could allow the creation of a Human Digital Twin, capable of answering the perennial financial planning question: “What happens if you die too soon, and what happens if you die too late?”

The financial aspects of a “digital twin” would rely on integrating:

• The individual’s online balance sheet

• The individual’s stage of financial literacy within an “Education Escalator”

• A contextualization library that personalizes insight based on that individual’s current circumstances

Wish‑list for a Multi‑Jurisdictional “Scoreboard”

The heart of the system is the balance sheet. Historically, building such a tool required overcoming not just technological barriers but legal ones — especially jurisdictional issues. Ironically, recent regulations, such as open banking and data management law, now reduce these obstacles by specifying guidelines on how to build such systems.  On the technological side, blockchain will certainly improve the efficiency and speed with which data is collected, with a reasonable expectation of doing so at a lower cost than previous technologies allowed.

Objective: Building the Net-Worth Mindset — the Multi-Jurisdictional Online Balance Sheet Wish-List:

• The aggregation of information into an online balance sheet with (of course) highly secure data feeds.

• Dynamic multicurrency consolidation, with the ability to separate different “base currencies”. A “base currency” being the one for end use (i.e. retirement in Australia; education in the USA).

• Jurisdiction specific‑ tax/compliance tracking with reporting deadline alerts

• Improved documentation and tokenization of assets, including fractional assets (e.g., a portion of a bottle of wine or a section of a Van Gogh)

• Alternative asset ingestion (e.g., real estate, art, private equity). Recognizing that current balance sheets often struggle with non-liquid asset valuation.

• Audit-ready data trails.

• Hierarchical ownership mapping (useful for wills and estate planning)

  
  

The first regulatory paper I ever read began with words to the effect: “You can’t stop a fool parting with his money.” But the more we help build Ramsey’s “net-worth mindset,” the more empowered people become. It enables individuals to confront Spike Milligan’s humorous request: “All I ask is the chance to prove that money can’t make me happy.” With better tools, more people can build wealth — and find out for themselves.

END.