The recent financial crisis has revealed that Americans at all income levels exhibit difficulty in managing their finances and are ill-prepared to weather economic stresses. Across the financial services landscape, the need to chart a new course for financial education has never been more apparent, and consumers themselves have never been more motivated to learn. Consumers urgently need more information and tools to recover financially and steward their financial resources.

A shift in financial education may hold the key. Signs are emerging that financial education is shifting its focus to financial capability, which emphasizes behavior change in addition to knowledge gains. Whereas financial education is a set of provider outputs, financial capability is a set of consumer outcomes. Becoming financially capable is a critical step toward establishing financial security.

Carrying out this new focus will require a variety of tools and approaches. Fortunately, new communication technologies and the insights of behavioral economics are already contributing to innovations in the field.