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

Financial decisions can have different background for their acceptance and, for example, a decision, based on judgments is a choice, based on knowledge or in accordance with the accumulated experience.
There are a few varieties of decisions, typical for the sphere of management, but I strongly believe that these decisions will be necessary to know for an ordinary person who wants to make right financial decisions in own life:
1. In the process of planning the followings decisions are accepted: decision about priority tasks and business nature; about aims; about co-operating with external surroundings; about strategy and tactic, which get out organization/person for achievement of the put aims.
2. In the process of organization of company’s/person’s activity the followings decisions are accepted: about structuring of work of organization/person; about co-ordination of functioning of different blocks; about distributing of plenary powers between the leaders of subdivisions/members of certain group; about the structure of organization/specific group of people at the change of external surroundings.
3. In the process of motivation of personnel/surrounding people/relatives/friends the followings decisions are accepted: about the necessities of inferiors; about satisfaction of their necessities; about the productivity of work of inferiors and about their satisfaction by work.
4. In the process of control the followings decisions are accepted: about measuring of job performances; about the estimation of these results; about that, as far as achieved objective organization; about adjustment of aims. custom essay
Malkeil demonstrated that “Stereotypes – these properties of human subconsciousness enable quickly to accept not quite correct, but comfort decisions. However much their use results in that people close eyes on facts which they are not arranged, and repeat the errors.” (Malkeil, 2005) A rational decision is a decision which is founded on the base of analytical process, and often not depending on preceding experience.
Educational efficiency depends on complex application of many factors and not in the last turn from procedure made decision and their practical embodiment in life. A rightness and efficiency of the accepted decision is in a great deal determined by the quality of economic, organizational, social and other types of information. Financial education plays a big role in the process of decision making, but it is not universal tool, because many decisions should be based on human’s experience and sometimes some educational principles can even be unnecessary. Researchers sometimes assert that financial education is an inadequate tool to promote effective financial decision making. This truth has disputable character, and it has really dual nature. For example, you can receive the best education in popular university, but when you are working in a company you have no important business information and in this case your education in financial sphere can’t help you in your way of effective financial decision making process. It becomes understandable that many people based their decision on information data that allow them to be in touch with all events and be a good competitive leader or worker.
There are many cases described in different literature, even in popular newspapers we can read that people with financial education still get caught up in fraud due to their moral values, for example. Sometimes we turn of our mind and believe only our eyes. Fraudsters use our wish to help people and sometimes they are not ordinary fraudsters who can meet us at the street but it can be representatives of some popular companies who can promise us something and we will believe in their words, forgetting that it is not financially adequate thing. In such way many of us bought unnecessary things listening to announcements and even good fantasists put their money in bank and then find in the agreement hidden conditions that make their profits not as big as it was expected. In any case I don’t want to say that agreements is a fraud, but sometimes when an old lady asked about additional conditions some workers say that all is ok, and it is honest agreement. When agreement was signed by the person additional conditions can appeared in a month and then person will be disappointed by this and it will be true if this person say that even having financial education he/she become a victim of well organized fraud.
Hilgert, Hogarth & Beverly emphasized that “the value of the got information depends on exactness of task, because the correctly put task predetermines the necessity of concrete information for a decision-making. “ (Hilgert, Hogarth & Beverly, 2003)
Making decision inherently to any type of activity, and effectiveness of work of one man, groups of people or all people of the certain state, can depend on it. From the economic and administrative points of view it is necessary to examine a decision-making as a factor of increase of efficiency of production. Efficiency of production, naturally, in every case depends on quality of the decision accepted by the person. Shiller argues that “academic finance has evolved a long way from the days when the efficient markets theory was widely considered to be proved beyond doubt. Behavioral finance – that is, finance from a broader social science perspective including psychology and sociology – is now one of the most vital research programs, and it stands in sharp contradiction to much of efficient markets theory.” (Shiller, 2002)