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Basic Framework

Each element inside the pyramid is experienced by all individuals.
Everyone has a current level of financial well-being, is making financial decisions and experiencing outcomes, has a current level of financial capability, and is impacted by their general skills and abilities and external factors.

An individual’s financial well-being depends on the complex combination of the strengths and weakness in the elements that comprise the pyramid.

Pyramid Base:

  • An individual with low levels of critical thinking or information literacy has a shakier foundation on which to build their financial capability.
  • The level of financial capability an individual has rests upon a host of external factors that can positively or negatively impact that potential capability.

Scaffolding of Higher Levels:

  • An individual with high levels of knowledge–but lack of access–will have a lower level of financial capability, and thus decisions and outcomes are constrained.
  • A high enough income may be able to compensate for low knowledge or suboptimal decisions.
  • The choices and actions available to an individual depend upon their financial capability but also the current set of outcomes they are experiencing.

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