Calls for improving our financial knowledge abound. But they rarely take into account the tools that would actually help the most vulnerable.

Hardly a week goes by without a call to improve our financial literacy. Last week, the European Union commissioner for financial services, Mairead McGuinness, advocated for making such education a priority for Europe. She noted that one in three EU households couldn’t handle unexpected financial shocks in regular times — and the pandemic has only made things worse.
We’re all for better financial education. But a lack of knowledge is hardly the main reason why some families struggle so much with money. Low incomes, the economic environment and inflation all make budgeting challenging and falling into debt easier. If policymakers want to improve people’s financial well-being, they have to start with addressing these issues.