The guest for this episode is Jonathan Morduch, he is a professor of public policy and economics at NYU and the author of The Financial Diaries: How American Families Cope in a World of Uncertainty, co-authored with Rachel Schneider. The book looks at the financial situations of ordinary American families. It is centered around a detailed survey of 235 households where they recorded what they earned and what they spent at an extremely granular level. From a truck mechanic whose income depends on bad weather wearing out the parts on trucks to a blackjack dealer whose tips literally depend on her customers' winnings at the blackjack table, the surveys reveal a huge amount of variance in the incomes and expenses of these households. This variance is not captured in annualized statistics, but it has profound implications for the way these households spend and save. We discuss financial literacy in the context of the real problems people face and relate the stories to some results from behavioural and experimental economics.