3398: What is Financial Literacy? by Jake Wengroff with I Will Teach You To Be Rich on Essential Finance Skills

Summary

Podcast Summary: Optimal Finance Daily – Episode 3398

Title: What is Financial Literacy? by Jake Wengroff with I Will Teach You To Be Rich on Essential Finance Skills
Host: Diania Merriam
Original Author of Post: Jake Wengroff, featuring principles by Ramit Sethi
Date: December 24, 2025

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Episode Overview

This episode dives deep into the practical definition of financial literacy, drawing upon an article by Jake Wengroff (with insights from Ramit Sethi of “I Will Teach You to Be Rich”). Host Diania Merriam guides listeners through the key building blocks of strong financial literacy—emphasizing not just knowledge, but actionable habits and an empowered mindset. Covering everything from automation and hidden savings to investing, debt elimination, and earning more, this episode is a concise blueprint for anyone wanting to take control of their financial life.

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Key Discussion Points & Insights

1. Rethinking Financial Literacy (01:01)

• Main Point: Financial literacy is far more than cutting back on lattes or finding elusive hot stock tips. It’s a skill that can be learned, sped up, and made less overwhelming with the right mindset and systems.
• Quote:
  “Most people think financial literacy means fixing spending habits like daily four dollar lattes and investing the money in some little known financial instrument… It is so much more than that.” (Jake Wengroff, 01:01)

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2. Five Steps to Financial Literacy (01:38–09:30)

Diania presents Ramit Sethi’s five actionable steps for becoming financially literate and setting up an effortless system for money management:

2.1 Automate Your Money (01:38–03:38)

• Insight: 80% of your financial success comes from behaviors around saving and spending, only 20% from what you know.
• Takeaway:
  • Set up auto-pay for bills, retirement accounts, and savings.
  • Categorize your money:
    • Fixed Costs (rent, utilities, debt payments)
    • Investments (retirement accounts)
    • Savings (emergency, goals)
    • Guilt-free spending
• Quote:
  “Set up recurring payments and transfers so that you’ll never have to think twice about where your money’s going.” (Jake Wengroff, 02:19)

2.2 Discover Hidden Income (03:39–05:53)

• Insight: Many “fixed” expenses (insurance, phone bills, banking fees) are negotiable. Small, focused effort can result in major annual savings.
• Actionable Steps:
  • Call providers and negotiate lower rates.
  • Request fee waivers and better terms.
• Quote:
  “A few 1-time 5 minute phone calls can save you thousands every year.” (Jake Wengroff, 04:11)
  “These savings can be considered hidden income…” (Jake Wengroff, 05:13)
• Memorable Analogy:
  Skipping lattes = daily stress; negotiating bills = set-it-and-forget-it savings.

2.3 Start to Invest Now (05:54–07:43)

• Key Points:
  • Don’t delay investing—compound growth is powerful.
  • Start with simple vehicles like IRAs or target date funds.
  • It’s never too late to start; something is always better than nothing.
• Quote:
  “Start early and you will be rich. Boom. Drop the mic.” (Jake Wengroff, 07:33)
• Stat: Nearly a quarter of US adults have no retirement savings or pension.

2.4 Eliminate Your Debt (07:44–08:40)

• Action Steps:
  • List your debts, prioritize which to pay first.
  • Work on improving credit and lowering interest rates.
• Quote:
  “Debt sucks. Credit card debt is one of the biggest barriers to living your rich life.” (Jake Wengroff, 07:44)

2.5 Earn More (08:41–09:30)

• Core Idea:
  • While making your money work for you is important, earning more remains the fastest route to improving your financial position.
  • Use skills and experience for side hustles, raises, or business ventures.
• Example:
  • $300/month extra becomes $18,000 over 5 years if saved and invested.

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3. The Mindset Shift (11:28)

• Diania's Perspective:
  • Emotional orientation towards money matters as much as tactical steps.
  • Financial literacy is about empowerment, not shame.
  • Cultural conditioning and instant gratification can be obstacles, but reframing wealth-building as exciting can make the process enjoyable.
• Quote:
  “A big part of taking charge of your finances is paying attention and being really thoughtful and intentional about spending.” (Diania Merriam, 11:54)
  “If you could get as excited about saving and investing as you are about buying a new purse... this whole building wealth thing starts to get a whole lot more fun.” (Diania Merriam, 12:24)

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Notable Quotes and Memorable Moments

| Timestamp | Speaker | Quote | |-----------|---------|-------| | 01:01 | Jake Wengroff | “Most people think financial literacy means fixing spending habits like daily four dollar lattes… It is so much more than that.” | | 02:19 | Jake Wengroff | “Set up recurring payments and transfers so that you’ll never have to think twice about where your money’s going.” | | 04:11 | Jake Wengroff | “A few 1-time 5 minute phone calls can save you thousands every year.” | | 05:13 | Jake Wengroff | “These savings can be considered hidden income…” | | 07:33 | Jake Wengroff | “Start early and you will be rich. Boom. Drop the mic.” | | 07:44 | Jake Wengroff | “Debt sucks. Credit card debt is one of the biggest barriers to living your rich life.” | | 11:54 | Diania Merriam | “A big part of taking charge of your finances is paying attention and being really thoughtful and intentional about spending.” | | 12:24 | Diania Merriam | “If you could get as excited about saving and investing as you are about buying a new purse...this whole building wealth thing starts to get a whole lot more fun.” |

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Timestamps for Key Segments

• 01:01 – Defining financial literacy beyond cutting discretionary spending
• 01:38–03:38 – Step 1: Automate your money
• 03:39–05:53 – Step 2: Discover hidden income
• 05:54–07:43 – Step 3: Start to invest now
• 07:44–08:40 – Step 4: Eliminate your debt
• 08:41–09:30 – Step 5: Earn more
• 11:28–12:24 – The mindset shift: viewing money as a tool for empowerment

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Conclusion

This episode underscores that financial literacy isn’t just about restrictive budgets or high-level investment knowledge—it’s about building systems, negotiating for yourself, starting early with investments, eliminating debt, increasing your income, and, perhaps most importantly, shifting your emotional orientation to money. Diania’s voice brings warmth and relatability, empowering listeners to treat money as a “fun and exciting” tool. The actionable steps and reframing techniques in this episode make it a practical primer for anyone looking to build lifelong money skills.

Transcript

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Car pickup fees may apply. This is optimal Finance Daily what Is Financial Literacy? By Jake Wengroff with I will teach you to be rich.com Most people think financial literacy means fixing spending habits like daily four dollar lattes and investing the money in some little known financial instrument your college roommate can't shut up about on Facebook. It is so much more than that. Financial literacy is something that is new for a lot of people. It usually takes a long time to acquire. But the good news is that we.

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Can speed things up for you.

[Jake Wengroff / Financial Literacy Host]

Saving hundreds of hours of frustration and confusion trying to shore up your personal finances. You don't have to spend years studying compound interest charts or weeks trying to find the latest hot stocks. To get there, all that's required of you is a willingness to think about money in a different way. This newfangled thinking forms your financial literacy. Here are Ramit's five simple steps to help you become financially literate and create a personal money management system that practically runs on autopilot. Automate your money let's face it, making and saving money is hard work. But understanding how to make and save money can be even harder. It doesn't have to be. As Ramit points out, when it comes to managing money, 80% or more of your long term success comes down to your behavior around saving, spending and investing. The other 20% comes from knowing what to do. So why not spend 20% of your time on acquiring financial literacy and put systems in place to reduce the 80% of the time needed on those good behaviors to save, spend and invest? The good news is that 80% of your time spent on such good behaviors can get drastically reduced by automating your bill paying and saving, whether from the websites of the bill payees themselves or directly from your online checking account. Set up recurring payments and transfers so that you'll never have to think twice about where your money's going. You won't miss the money because all or most of your money will go where it's supposed to go automatically. Here are Ramit's spending recommendations. Fixed Costs Paying bills such as rent, utilities or debt investments Placing funds in retirement accounts such as a roth IRA or 401k savings putting money away in an emergency fund savings account for gifts, vacations or for down payments on large purchases and guilt free spending money spending on restaurants, clothes OR Entertainment Number 2 Discover Hidden Income do you pay for car insurance or for cell phone service? Is it the same amount each month? Surprise. It doesn't have to be. Bills that seem fixed actually aren't. In fact, you're most likely paying much more than you should. Wouldn't it be great to spend less on the things we don't even like paying for? Think about banking and credit card fees, car insurance, student loans, even your cell phone bill accounts with interest rates or terms that we seemingly don't have control over. However, the truth is that you do have control and Ramit can show you how. A few 1 time 5 minute phone calls can save you thousands every year. It's all about negotiation, doing your homework, speaking to the right person and explaining why a change in your favor is needed. Gentle nudges and requests to speak to supervisors also help. Logically, by spending less on the things you're already paying for, you can have more money left over to save, plan for retirement or make major financial decisions. These savings can be considered hidden income, which you can use as cash for large expenses. Number three of Roommate's Money Rules Money on books, appetizers, health, or donating to a friend's charity fundraiser. Number four on the list or spending on health or education. Number seven on the list Discovering this hidden income via a few phone calls that lead to automatically reduced monthly bills is so much better than deciding against that four dollar latte. Ramit points out that deciding against the latte on a daily basis is painful and sets us up for failure. However, changes that only require us to set it and forget it via just a few phone calls per year allow us to focus on things that truly matter. 3. Start to invest Now. I don't have time and I don't want to lose money are common excuses why People don't invest as Ramit points out, nobody just loves spending time managing their money and certainly nobody likes losing it, time or money. However, Ramit has done the heavy lifting by researching investment strategies that don't take lots of time to maintain and can still pay off in a major way. You don't have to be a super smart stock picking wizard to make money. Here are Ramit's three most important factors for do your research, Be disciplined and start early. It takes work and consistent savings to become rich, so it's easier for a lot of people to keep procrastinating. Every extra year you wait to start investing makes it harder to make the same amount of money. We can't imagine you started investing when you were a high school or college student, but investing if you haven't started already needs to begin and become part of a long term strategy. Start early and you will be rich. Boom. Drop the mic. But what if you think you're too late? It's never too late. But for those who think they're late to the game starting to invest, say in their 50s or even 60s, consider target date funds and automated funds going to an ira. Investing something is better than nothing. A recent Federal Reserve report cited by Statista found that nearly a quarter of US Adults have absolutely no retirement savings or pension at all. You don't want to be in this statistic. 4. Eliminate your debt. Debt sucks. Credit card debt is one of the biggest barriers to living your rich life. Debt prevents us from enjoying ourselves and investing in ourselves. If your net worth is in the red, it makes it hard to even conceive of creating a financial plan, investing or making a large purchase. Worst of all, debt buries us in guilt and fear. The good news is that Ramit has five steps to getting out of debt fast. Figure out exactly how much debt you have, decide which debt you'll pay off first, increase your credit score and lower your APR and your monthly payments. Choose the source of funds to use to pay off the debt and get started. You will be on your path to zero debt in no time. Understanding how credit card debt, credit history, credit reports and credit scores work, and their relationship to your overall financial health is an important part of your financial literacy. Don't ignore it. Earn more. Although Ramit stresses that financial literacy is about making money work for you, make no mistake, you still need to work for your money. Indeed, earning money and more of it is the fastest and biggest way to improve your financial power. Luckily, there isn't a single universal surefire way to earn more money. Some people want to get a raise, others want to make extra money with a side hustle or by earning passive income. Still others want to start a new business that will replace their full time job or main source of income. What's more, you can use the skills and experience you already have to make more money and put it into your accounts. Steady streams of income, monthly or regularly can certainly build up over the long term. For example, $300 extra per month becomes $3,600 per year, which over five years becomes $18,000 or more if the money is placed in an interest bearing savings account or investment account. Final Words look, we get it. The amount of information on the Internet presuming to teach financial literacy or receive a financial education can seem insurmountable. The good news is that you don't have to spend years studying compound interest charts or weeks trying to find the latest hot stocks to get there. All that's required is a growth mindset, a willingness to think about making spending and saving money in a different way than you have in the past. You just listened to the post titled what is Financial Literacy? By Jake Wengroff with iwillteachytoberich.com Imagine you're.

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[Jake Wengroff / Financial Literacy Host]

That a huge part of financial literacy is shifting your mindset. Yes, there are practical things to know about money and you should do the tactical stuff like tracking your spending, develop and engage with a budget, and create a financial plan or order of operations of what to do with the gap between your income and expenses. The tips in this article about automation, investing, getting rid of debt, etc. Are all amazing tactical things we should all be doing. What you need to do with your money to build wealth is relatively simple and easy. The harder part is developing a sense of empowerment around your money to start seeing it as an exciting tool rather than a source of shame or embarrassment. This requires a more emotional shift that will allow all of these tactical things to feel less like deprivation. A big part of taking charge of your finances is paying attention and being really thoughtful and intentional about spending. I think this is hard for most people for a couple of reasons. Firstly, you've been conditioned since birth to be a good consumer and to cut back on luxuries may be a threat to your sense of self worth. But also you've experienced how good it feels in the moment to buy something. You likely have never experienced how good it feels to have a million dollars, and you may not believe that's even possible for you. If you could get as excited about saving and investing as you are about buying a new purse, for example, this whole building wealth thing starts to get a whole lot more fun. That brings us to the end for today though. Thanks so much for listening all the way through and I'll catch you tomorrow on our next episode, where your optimal life awaits.