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

A decision-making process requires logical and well-organized approach, because people make decision, which are attended with certain obligations and necessity of making reality of them. From all ambiguities person in ordinary life must choose a decision which will allow attaining end-point. This vagueness can accept the row of forms and present:
1. standard decision, at acceptance of which there is the fixed set of alternatives;
2. binary decision (“and or not”);
3. multiple-choice decision (there is a very wide choice of alternatives);
4. innovative (creative) decision, when it is required to undertake actions, but there are not acceptable alternatives.
Purpose of the well-organized making decision is to promote objectivity and provide the account of all important information. If cause-effect analysis is a deductive process which compels person to collect information, and then to sift from their by a critical exception, the process of making decision is pulled out by a requirement on creation of database which is after used for a screening-out and exception of less desirable alternatives.
Forecasting is a part of correct decision making process and Shiller explains this fact in the next words: “Thus, the fundamental principle of optimal forecasting is that the forecast must be less variable than the variable forecasted. Any forecaster whose forecast consistently varies through time more than the variable forecasted is making a serious error, because then high forecasts would themselves tend to indicate forecast positive errors, and low forecasts indicate negative errors. The maximum possible variance of the forecast is the variance of the variable forecasted and this can occur only if the forecaster has perfect foresight and the forecasts correlate perfectly with the variable forecasted.” (Shiller, 2002)

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To find the correct ways of decision of problem, people must not aspire to its immediate permission, and it is practically impossible, and must accept the proper measures on the study of reasons of origin of problem on the basis of present internal and external information. At the choice of criteria for a decision-making people follows the system of norms and principles with which it is possible to compare an alternative decision. Norms, as a rule, limit the choice of criteria, because many people can not change interpretation of one or another law that narrows activity in a decision-making. To the number of such limitations it is possible to take absence of sufficient experience and qualification, presence of keen competition and other.
Thus, based on above discussed information it is possible to conclude that in every area (it can be business area or everyday situations); a decision-making is component part of administrative function. The analysis of the financial reporting allows objectively assessing the actual financial situation and accepting an optimum in this situation decision. It will be wrong position from our side to affirm that financial education is an inadequate tool in all cases but it is necessary to mention that financial education is one component of the big process that helps to work in effective way. According to Lusardi it is obvious that “for the leader of establishment or organization understanding of decision-making nature is extraordinarily important.” (Lusardi, 2008) It will help him to succeed in the art of management, able using the methods of analysis of the financial reporting. Daily every person accepts mass of decisions. A capacity for communications and making decision is ability, developed with experience. In all situations it is necessary to remember about the level of responsibility, because we are always responsible for our words, actions and also financial decisions.
This theme had got development not only in an economy and management. In the process of work under my research paper I paid attention to enormous amount of methods of making decision, which are widely used in an information theory and information science, it is also main component of everyday activity for each ordinary family. In particular, due to these theories develops stormily direction of development and improvement of artificial intelligence. Following to the general tendency unexampled to the rapid evolution of information technologies in modern society it is possible to suppose that the theory of making decision has prominent future. For the end of my paper I want to say that traditionally people perceive finances as awful thing or boring collection of numbers. Breaking this stereotype is possible, if to trust that finances are merrily, interestingly and unusually process.

 
Works cited:
Hilgert, Marianne, Hogarth, Jeanne & Beverly, Sondra. “Household financial management: the connection between knowledge and behavior.” Federal Reserve Bulletin, Board of governors of the Federal Reserve System. (US) Issue July, 2003, pp. 309-322.
Lusardi, Annamaria & Mitchell, Olivia. Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education Programs. Michigan Retirement Research Center, University of Michigan, 2006.
Lusardi, Annamaria. Financial Literacy: An Essential Tool for Informed Consumer Choice? June 2008. NBER Working Paper No. W14084.
Malkeil, B. “Reflections on the Efficient Market Hypothesis: 30 Years Later.” The Financial Review, 1-9, 2005.
Ruffenach, Glenn. Confessions of a Scam Artist. Wall Street Journal, August 9, 2004, page R1.
Shiller, R. From Efficient Market theory to Behavioral Finance. Cowles Foundation discussion, 2002. Paper, No. 1385.