We Need To Build Financial Capability In Hawaiʻi’s Classrooms
While financial knowledge may exist, the capacity to apply it effectively often does not.
October 29, 2025 · 4 min read
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The state of Hawaiʻi recently passed Senate Resolution 44, which calls for the Hawaiʻi Department of Education to develop a financial literacy curriculum for high school students and to encourage teachers in other grades to incorporate financial concepts into their classrooms.
Research has shown that financially literate individuals benefit not only themselves but also their families and the broader economy. However, what many fail to understand is that financial literacy and financial capability are distinct concepts.
Defining the Difference
Financial literacy and financial capability are often used interchangeably, yet they represent distinct concepts. Financial literacy refers to possessing knowledge about everyday financial situations, such as banking, savings and credit, to make informed decisions.
Financial capability, however, extends beyond knowledge. It involves the ability and confidence to apply that knowledge when making real-world financial decisions.
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According to the 2024 National Financial Capability Study, 66% of 18-to-34-year-olds reported engaging in poor credit card behaviors, and 46% used non-bank methods, such as payday loans and pawn shops. The study also found that many adults spend more than they earn.
This data underscores a critical gap: while financial knowledge exists, the capacity to apply it effectively often does not.
Financial Stress And Decision-Making
Financial capability must also be understood through the lens of psychology and human behavior.
For individuals and families living in poverty or underserved communities, economic decisions are often made under chronic stress. When a person is struggling to pay a bill, provide nutritious meals for their children, or save for emergencies, even basic financial tasks can become overwhelming.
Research in 2024 explored this concept through a visual study of adults who had sustained brain injuries. Participants described how stress and sensory overload shaped their daily decision-making. Although this study focused on individuals with neurological trauma, similar cognitive barriers appear among those facing financial hardship.
The 2024 NFCS reported that 63% of respondents spend more than five hours per week thinking about personal finances, which is a source of ongoing anxiety. Earlier studies reveal a strong correlation between financial stress and reduced cognitive bandwidth, limiting people’s ability to make sound financial decisions.
Why Financial Literacy Alone Is Not Enough
The state’s efforts to promote financial literacy are commendable, but the DOE must ensure that instruction goes beyond knowledge to build capability. It is not enough for students to learn about interest rates or budgeting; they must also develop habits, confidence, and resilience to act on that knowledge.
According to the NFCS, while Hawaiʻi respondents perform relatively well on financial literacy questions, many still struggle to manage their finances effectively. Over half (51%) reported difficulty covering expenses, 41% lacked emergency savings, and 59% had not begun planning for retirement.
These challenges are magnified in an increasingly digital economy. More than half of Hawaiʻi respondents (53%) used their mobile devices for payments, and 62% used them for money transfers, yet digital banking and asset management literacy remain uneven. Financial education must therefore evolve to address both traditional and modern financial contexts.
A Call To Action For Hawaiʻi’s Future
Our future leaders deserve more than literacy. They deserve the ability to navigate financial systems confidently, manage stress effectively, and make informed choices that strengthen their families and communities.
By teaching capability alongside literacy, Hawaiʻi can raise a generation not only prepared to manage money but also equipped to build financial resilience for the future of our islands.
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