Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
Strengths and weaknesses of financial literacy
Chapter 17 financial literacy
Strengths and weaknesses of financial literacy
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: Strengths and weaknesses of financial literacy
Review on related literature
This chapter reviews existing literatures and studies that are related to the study. The reviews begin with the financial literacy of people in the Philippines, what they know about personal finance, and the impact of knowing the methods of personal finance in their lives. This part of the research is to strengthen the ideas and concepts of our study.
The concepts and how you understand personal finance management We could simply call personal finance as all financial decisions and everyday activities that a person could do. Budgeting household incomes and expenditures, savings, investments, mortgages, insurance and all other decisions that require money are included in our financial decisions. The most significant
…show more content…
It could be easy and so simple to raise the public’s awareness to the importance of personal finance. It is significant to know and have good skills of personal finance management in order to make right or correct day-to-day decisions such as what to buy and what not to buy. This would really help us to save lots of money in the long run, as not-so-important goods or products would be bought not so frequently.
In the latest survey of Mastercard Financial Literacy Index, Indonesia and Philippines scored the lowest in the region (Asia). On basic money management, the Philippines scored 73, while Indonesia scored 70. Both were lower than the Asia-Pacific average of 75(Miral Fahmy, Reuters, 2015).
One of the best ways to increase personal finance management skills is to track a budget and fix all the incomes and expenses for each period (e.g. month, quarter, etc.). This would also help us to avoid buying unnecessary purchases and save more money for
…show more content…
It might be benefial not only for individuals or households, but also for countries’ economic system. However, it is easy to identify that most of us people lack financial literacy. This concerns not only governments, but also various researchers e.g. Lusardi, A. (2008); Marcolin, S.; Abraham, A. (2006). Exchairman of USA Federal Reserve Alan Greenspan once said: “The number one problem in today’s generation and economy is the lack of financial literacy.” After logical and systematic analysis of scientific researches authors can agree to conclusions, that financial literacy is too low in larger part of households in the
When searching for a book that discussed personal financial planning, I couldn’t find a more appropriate one. Right off the bat, the title caught my attention. “Your Money Your life” seemed pretty personal so I flipped the book over and the back read, “This new edition…explains their 9 step program and shows you how to: get out of debt and develop savings, make values-based decisions about your spending, resolve inner conflicts between values and lifestyle etc. The book now has my attention, I opened it up and began reading right there in the bookstore. Immediately at the beginning of the prologue of “Your Money Your Life” the authors started with a series of questions to ask yourself. Some of the questions included, “Do you have enough money, are you spending enough time with your family and friends, do you come home from your job full of life, do you have time to participate in things you believe are worthwhile and so on and so forth”. After answering no to most of the questions, I knew this was the book for me.
Making improvements on our financial literacy results in a wave of impacts on our economy and the financial health in our society because of responisble behiavior with our finances. These modifications to our behavior are neccesary because it let's us address primary cultural problems, for example over-credits on your purchases, mortgages possibly resulting in debt, dealing with expectations on inflation and also planning on your retirement.
Parents may not feel comfortable enough with their own financial situation to discuss personal finance with their children (Williams, 2009). Additionally, the parents, or other influencers, may not have a full grasp of certain concepts of financial literacy. In an article by Carlin and Robinson (2010) it was noted that “many retirement-age adults lack the financial literacy to understand the basic features of their retirement plans.” Financial literacy through socialization and practice may not be enough for students; whether it be “disadvantaged” youths who often lack a high quality of life at home, or youths whose parents have stable jobs with retirement
With these three scenarios, I have learned several things about making a personal budget. I learned how to research the economic situation and best predict the prices for certain things. I also learned how best to manage bills under a tight and a very free budget. I learned how to manage money, not just for myself, but for others that I may one day be responsible for.
“Horace Mann firmly believed in the utility of education to improve society and humanity” (Groen, 2008). Horace Mann said "Education prevents being poor”. As true as this quote may be, there is also a strong relationship between our debt to income ratio from the amount of loans we accrue while educating ourselves and the income we earn to repay the debt. Taking steps to educate before the problem gets worse is very important. Financial Management programs should be just as important as the other curriculums that are a required for graduation. Every high school students should be taught financial education regardless of sex, gender, color or race. One of the greatest barriers to financial literacy is overcoming student’s fear of borrowing. They should be taught how to make responsible choices financially. Some students are afraid to get into too much debt; therefore they prefer not to pursue higher education. Others worry about credit cards without the proper knowledge on how it works. This program will help relieve those fears and teach the proper ways to utilize money respon...
When it comes to financial planning, economics plays a major factor in people’s personal finances in many ways, it is an essential part of the world we live in today. When you buy gas, or shop for groceries, plan a vacation, economics is at the core of those choices. So why does economics play such a vital role, what is the driving force behind this? In its simplest form, it’s based on choice. We will look at a few factors that impacts financial planning and the economy, including the use of credit, and how the government affects the economy.
I became an enthusiast of finance ever since I was at high school. At the political economy class, my teacher asked us: if you have a million RMB, how would you use it? She then introduced us the concept of investment, and I was intrigued specifically by the stock. For the latter two years of my high school, I have been reading books and articles regarding the stock market in the U.S. and in China. As one of the outstanding students ranked top 1% in College Entrance Exam in Hainan Province, China, I was accepted by the City University of Hong Kong with a full scholarship. With the strong interest in finance, I chose quantitative finance and risk management as my major.
In conclusion, the best way to manage your money is to keep a budget and record all your transaction to see where your money is going. Living with a budget isn’t the easiest thing in the world, but it can be a great alternative to worrying about how you are going to pay for your expenses. Budgeting allows you to create a spending plan for your money; it ensures that you will always have money for the things that are important to you. Following a budget will also keep you out of debt. If you don’t balance your budget and spend more than you make, you will have financial problems. Many people don’t realize that they spend more than they earn and slowly sink deeper into debt every year.
Managing personal finances is an important skill to acquire. However, no where in school is this subject taught. As a result of a lack of preparation, our society is subject to a high percentage of people who lack financial success. Those who are successful at managing their personal finances will find that they are successful in many other areas as well. To learn how to manage personal finances there are books and web sites that provide a step by step guide to successfully managing personal finances. Those who lack financial success often possess many of the same traits.
Developing a thorough financial plan is a process that comprises a comprehensive analysis of a particular individual’s financial position and their long-term commitment to apply and observe the set financial plan through one’s life. The plan includes but not limited to, how an individual spends, saves monies and invests his or her financial assets. It encompasses knowing how to budget, manage cash and taxes, borrowing of funds, the use of credit cards, minimizing risk, investing and planning for retirement. Such a plan also requires a vigilant thought process for the future so he/she can tweak their financial plans as needed due to changes in lifestyle and economy.
Business Administration Students. This study examine their financial intelligence and how it will benefits in developing theirknowledge and information in order for them to become financial intelligent. Thus, this study will enable for the students to enhance and be broadin financial world.
Some people flourish in the small business world and others have a hard time surviving in the ever changing economy because they are not keeping financial records in proper order from lack of knowing how to do so. Some find themselves having to take out small business loans to stay aloft ending up in a disaster of debt or even at, times, bankruptcy. This also plays an important role in personal lives if they do not know how to monitor spending. It is easy to end up living beyond their means. By keeping records of all income and comparing them to the monthly debt obligation, they might be shocked on how much money is wasted on unneeded expenses, making it hard to live in today’s economy.
Personal financial planning is important because it helps you prepare financially for the future. My first short-term financial goal is to have an 8-month emergency savings account. This class helped me understand the important steps needed to achieve my financial goals. “Successful financial planning requires specific goals combined with spending, saving, investing, and borrowing strategies based on your personal situation and various social and economic factors, especially inflation and interest rates” (Kapoor, Dlabay & Hughes, 2012). First I evaluated my spending habits. This allowed me to see where I was
Money is essential for our everyday lives and people have to face choosing whether to save up or spend their money. Of course earning our money can difficult considering that it is a necessary asset that affects every aspect of our life. Every day we see people working hard to earn as much money as the can. However how they use using the all the money earned is a frequently debated topic have seen many people who earn money and can no restrict themselves from spending .They usually act like wild animals fighting for food and being separating from the delusions of business. People are usually confused and frustrated by the amount money the use in a week without knowing that their daily impulse buying objects have piled up. Although it can be very hard to control there are many easy steps to stay away y from spending and instead saying up. Setting a goal, recording the amount you spend and even lowering your expenses can be small steps that will lead to great success in saving for the future
Never have I ever climbed a mountain peak. As a child, I imagined myself conducting expeditions in deep-frozen pathways, leading amateur explorers to the top of the world, and instructing rookies in surviving harsh blizzards. Even though slightly altered, my childhood dream has been achieved. I led a team of fellow classmates, in my Strategic Management course, to the success summit of a financial competition. Over the course of a semester, I and my teammates were supposed to create and manage a company of the IT industry, in a computer-simulated environment, along with other four rival teams. I dealt with strategy and financial matters of our virtual enterprise, while my colleagues were working on marketing and manufacturing. During the four months of the exercise, I have experienced finance from various aspects: capital budgeting, through selecting favorable investment for upcoming quarters; debt management, by assessing the necessary amount and efficiency of loans; profitability analysis and dividend policy, which had been used to compile the company’s general performance index. Working in a multinational team, which included an American, a Norwegian and a Moldovan, strengthen my negotiations skills, as well as flexibility and cooperation. But above all, this experience intensified my passion for finance. Of course, a pleasant bonus was the fact that, in the end, our company’s financial performance was six times the performance of second-best team.