Buy essay on Financial education is an inadequate tool to promote effective financial decision making.

Nowadays the topic of financial education is highly discussed in different circles of our society. Lusardi stated that “Economists are beginning to investigate the causes and consequences of financial illiteracy to better understand why retirement planning is lacking and why so many households arrive close to retirement with little or no wealth.” (Lusardi, 2006) I’d like to continue these discussions and to focus on an interesting question why financial education is an inadequate tool for financial decision making. It is necessary to understand motives of financial decisions and what drives or motivates people to make their financial decisions in appropriate way. I also want to mention in my paper how financially educated people still get caught up in fraud.
According to Lusardi we see that “As one example, the Organization for Economic Cooperation and Development (OECD, 2005) defines “financial education” as: “The process by which financial consumers/investors improve their understanding of financial products and concepts and, through information, instruction, and/or objective advice, develop the skills and confidence to become more aware of financial risks and opportunities to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being.” (Lusardi, 2006) This definition will help us to understand the main problems of our discussion and make more deep analysis of chosen topic.
First of all I want to mention that right financial decisions are most important in business sphere, but ordinary people also need to make right decisions in their everyday life. I understand that correct financial decisions are integral part of today’s activity in any sphere and even well educated people with high level of financial education still get caught up in fraud and become victims of well organized frauds.
It is interesting to mention that if you have no money, you all time think about them. If you have money, you will think already only about money too – one day famous American multimillionaire noticed. Scarcely, who will contest importance of financial questions in everyday life of people and organizations. Moreover, this utterance is just for people who daily decide the questions of financial management in their companies, their homes and also for those, who chosen finances as the profession. Well-educated people are the basis of our society but not in all cases of life financial education, for example, can be an adequate tool to promote effective financial decision making. I think it is necessary to look at the nature of the process of different decision making in the body of this paper. A man, when he accepts organizational and financial decisions and will realize them through other people, taking into account their own aims and interests in one taken, for example, financial sphere, needs specific education and knowledge, but person also needs life experience. A decision-making, as well as exchange of information, is the basic constituent of any activity. I think that a decision is a choice of the most acceptable alternative from the possible variety of variants. Malkeil demonstrates that “An organizational decision is a choice which does leader, to execute the duties, certain his position. A purpose of organizational decision is providing of successive motion of organization to the set aims.” (Malkeil, 2005)
Organizational decisions are programmed and unprogrammed. The programmed decisions are those which accompany the receipt of result, and certain some, by the already exhaust sequence of steps, decisions or actions. Unprogrammed decisions are those which arise up because of new unusual situation. Saying about different kinds of decisions it is necessary to add that often people use compromise in different financial sphere (or any kind of sphere, it can be home finances or something else) where they can’t find the right decision in time. Defining compromise we see that a compromise is an agreement, attained by acceptable mutual concessions. In continuation of this topic we see that an intuitional decision is a choice, done only on the basis of feeling, lighting up.