The costs of financial illiteracy
I like my subject line. It is punny ("pun" and "funny") that the financially illiterate probably won't get. No irony I consider myself fundamentally financially illiterate despite years of trying to dig myself out of a lifetime of financial problems, most attributable to being virtually comatose when it comes to understanding finances, from the outside or inside. Compound (heehee) this illiteracy with genuine financial emergencies that might afflict anyone potentially (which is also the reason for people to have a "rainy day fund" a.k.a. "emergency fund"), my history results in an unfortunate freefall to financial disaster.
Anyhoo I googled "financial literacy" and one of the articles that came up that I liked was this one from The New Yorker.
http://www.newyorker.com/talk/financial/2010/07/05/100705ta_talk_surowiecki
Excerpt from the sixth paragraph of the above.
In fact, the reverse is true: the less people know, the more overconfident in their abilities they tend to be. ... This is known as the Dunning-Kruger effect: people who don’t know much tend not to recognize their ignorance, and so fail to seek better information. No wonder, then, that the least knowledgeable people in the Atlanta Fed study were also the least likely to do research before getting a mortgage. By contrast, well-informed people are more likely to ask others for help. If financial education taught people only how little they actually know, it would accomplish quite a lot.
Separately a wikipedia article (yeah, yeah on relying on wikipedia as a source) titled, "Financial literacy." It is shorter than some articles, but a nice global summary on the topic.
http://en.wikipedia.org/wiki/Financial_literacy
Am excerpting the opening paragraph.
Financial literacy is the ability to understand finance. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions through their understanding of finances.[1] Raising interest in personal finance is now a focus of state-run programs in countries including Australia, Japan, the United States and the UK.[2]
Anyhoo I googled "financial literacy" and one of the articles that came up that I liked was this one from The New Yorker.
http://www.newyorker.com/talk/financial/2010/07/05/100705ta_talk_surowiecki
Excerpt from the sixth paragraph of the above.
In fact, the reverse is true: the less people know, the more overconfident in their abilities they tend to be. ... This is known as the Dunning-Kruger effect: people who don’t know much tend not to recognize their ignorance, and so fail to seek better information. No wonder, then, that the least knowledgeable people in the Atlanta Fed study were also the least likely to do research before getting a mortgage. By contrast, well-informed people are more likely to ask others for help. If financial education taught people only how little they actually know, it would accomplish quite a lot.
Separately a wikipedia article (yeah, yeah on relying on wikipedia as a source) titled, "Financial literacy." It is shorter than some articles, but a nice global summary on the topic.
http://en.wikipedia.org/wiki/Financial_literacy
Am excerpting the opening paragraph.
Financial literacy is the ability to understand finance. More specifically, it refers to the set of skills and knowledge that allows an individual to make informed and effective decisions through their understanding of finances.[1] Raising interest in personal finance is now a focus of state-run programs in countries including Australia, Japan, the United States and the UK.[2]