Mar 17 2025 8 mins
The gap between knowing about money and actually managing it well is wider than most people realize. In this enlightening conversation with financial expert James, we unpack the crucial difference between financial literacy and financial capability—a distinction that explains why even finance professionals sometimes struggle with their personal finances.
Financial literacy encompasses understanding concepts like budgeting, investing, and interest rates. But financial capability goes deeper—it's about consistently applying that knowledge in real-world situations. As James explains, "You could be working in a bank for 20 years and still be spending more than you earn." This capability gap affects people at all income levels, from those struggling to save for their first home to high earners who somehow manage to spend more than their substantial salaries.
For those looking to bridge this gap, we explore practical steps toward financial capability. We discuss valuable resources from New Zealand authors like Martin Hawes, Mary Holm, and Liz Coe who provide locally relevant financial perspectives. James emphasizes the importance of setting clear financial goals, creating a functional budget, and regularly reviewing expenses—particularly those sneaky subscription services that drain your finances without delivering value. We also explore how modern banking tools can simplify the budgeting process by automatically categorizing your spending and highlighting areas for improvement.
Whether you're just starting your financial journey or looking to refine your approach to money management, this episode offers actionable insights to help transform financial knowledge into real-world results. Listen now to discover how you can move beyond financial literacy to true financial capability—and take control of your financial future.