Being fully literate on complicated subjects, such as economics, can be tricky. But when there’s money on the line, every word we use has to be treated with care.

The problem is that financial language is one of the biggest barriers for people trying to understand how to better manage their money. In fact, a report by a content and language analytics company found that 58% of the content from the top 50 banks in the U.S. is not readable for the average American. That means that more than half of us don’t have a clear understanding when it comes to conversations about money.

In the confusion, two terms that can be misconstrued are ‘financial literacy’ and ‘wealth literacy’. They may seem the same, but there’s a big distinction between the two, and grasping the nuances can go a long way to helping you make smarter, long-term financial decisions. Here’s our simple and savvy explanation:

What’s financial literacy?

Financial literacy is the ability to understand your finances, know tools that can help you build and manage your finances, and apply them effectively. Good financial literacy can have a direct impact on your financial wellbeing.

To be financially literate essentially means you have good financial skills: you can budget well, make sound investment choices, and avoid high-risk decisions. People who are financially literate tend to be less vulnerable to fraud, have greater success saving, and use resources like credit responsibly.

Knowing how to pay off debts, taking out a mortgage, having insurance, and understanding your credit score are core examples of financial literacy. However, in the modern age, where there’s a huge range of online financial products and services available, financial literacy includes being aware of how to safely use digital platforms and apps, and how to recognize things like suspicious activity.

Yet despite the need for every person to be financially literate, the Financial Industry Regulatory Authority (FINRA) estimates that roughly 66% of Americans lack the skill. Not having financial literacy is dangerous, because people are more likely to accumulate debt, develop poor spending habits, earn a bad credit score, and even fall into bankruptcy.

What’s wealth literacy?

Money can be viewed from two perspectives: economic and extra-economic. The first leans toward financial literacy skills, and the second refers to how we behave with and respond to money – typically rooted in our individual experiences and memories. For many groups in society, chronic financial stress has formed financial trauma that negatively influences how they build and sustain wealth.

Being wealth literate is to acknowledge how you emotionally connect with money, how you use financial knowledge to increase your net worth (the total value of everything you own/have), and how you actively achieve your unique financial goals. It’s centered on dismantling the institutional and societal barriers that can limit some of the most vulnerable people’s ability to gain wealth.

Current systems are not built so everyone has equal access to a healthy relationship with money, and so being financially literate is not enough. Studies show that the median wealth of black Americans will fall to zero by 2053, while nearly half of all single black and Hispanic women in the United States have zero or negative wealth.

If financial literacy is the theory, wealth literacy is the practice.

Financial literacy is like the curriculum you have at school – it contains all the information you need to learn, but it doesn’t always factor in context. Wealth literacy, on the other hand, is about taking information and applying it in the real world against real limitations.

Conventional financial literacy is a broad concept – it’s something you recognize you should have, but it’s not always clear how it personally affects you. For example, you can understand that planning a weekly budget is useful, but you may not understand how your spending is relative to your net worth going up or down. Wealth literacy means effectively knowing how to navigate an exclusive financial system, and manifesting your knowledge to shape lasting wealth.

Wealth literacy is the necessary evolution of financial literacy in a world where everyone has the same pathways to financial stability and prosperity. Money education cannot be viewed with a one-size-fits-all approach, it has to identify and respond to people who have been marginalized and traumatized by previous financial structures. By shifting focus toward wealth literacy as a more encompassing form of financial literacy, there can be a stronger springboard for people to improve both their wealth and wellbeing.