Literature Review Financial Stability. According to Goodhart (2006), financial stability has proved difficult to comprehend, mainly because there is no one accepted definition of what financial stability means. However, a vast national study by the United Way Worldwide identified two critical components that must exist in order for families to attain financial stability: stable adequate income and stable adequate financial resources (Valley of the Sun United Way, n.d.). Moreover, a report from the Corporation for a Skilled Workforce and United Way Worldwide (2011) stated that financial stability is achieved when families obtain sufficient resources via jobs that render enough income to sustain their daily necessities. Consequently, the main goal of financial stability is to increase the …show more content…
In particular, low-income people may have a lack of awareness about or distrust in banks and other financial institutions (Birkenmaier and Curley 2009). Therefore, communicating to them the advantages of using traditional banking versus using alternative banking services may help them to understand how to more effectively meet their banking needs (Robbins, 2013). Since many low income persons live paycheck to paycheck, acquiring a checking account could be an investment towards financial stability. Nearly 10 million households in the United States are unbanked and low income and minority families are disproportionately among the unbanked (U.S Department of the Treasury, 2008). Additionally, low-income families usually pay more for minimum financial services and have poor credit history, which prevents them from being able to rent affordable decent housing, or buying a reliable car on credit (Robbins, 2013; Jacob, 2000; Valley of Sun United Way,
Common Sense Economics: What Everyone Should Know About Wealth and Prosperity, written by James Gwartney, Richard Stroup, Dwight Lee and Tawni Ferrarini, explains the foundation of economics and how it all works in all aspects of our lives from the role of the government trickling down to personal credit cards and savings. This book was written with clear language for the audience to understand and comprehend the large amount of information within its condensed size. The authors’ target audience for this book seemed to be for those individuals wanting to learn the mechanics of economy including economic growth and stability. Gwartney separates his book into four parts: Part I, Twelve Key Elements of Economics, Part II Seven Major Sources of Economic Progress, Part Three Economic Progress and the Role of Government, and Part IV Twelve Key Elements of Practical Personal Finance.
...lity. When I research the definition of stability it stated: the strength to stand or endure. Therefore stability is something all organizations should value.
Finances play a part in everyone’s lives. According to critics, the generation of Millennials have not been the most accomplished in this area. However, new information is on the rise, and it shows that Millennials are becoming more financially stable. The generation of Millennials is a broad group. The group of Millennials associated in this discussion are from the beginning of the Millennial generation, which are those born between the 1980s and 1990s. The Millennials generation itself ranges from the 1980s to 2004. After the Great Recession, the older generation of Millennials had a massive setback with financial security. Since then, Millennials have always been known for having poor finances by critics. Millennials may not
As college students now, we know how important it is to know about how to avoid debts because many of us are or will rely on student loans to get through our higher education. Champlain College’s Center for Financial Literacy used national data to grade each state in the United States on how much effort is put into providing financial literacy for their high school students. Based on the information gathered in 2015 only 5 states obtained a letter A grade on their financial literary education; these states are Utah, Missouri, Tennessee, Alabama, and Virginia. These states require their students to take between half a year to a whole year of a either general financial literacy or personal finance. It is unclear how the student achievement is measured after taking these courses, but the resources to learn about what to expect are provided and are required to be able to graduate from high school, which cannot be said about all other 45 states in our country. 11 of the states were given a letter F grade, including our beloved California. These states do not offer finance classes alone or embedded into other courses. Although the achievement of students who take these courses is not exactly measured after graduating it is still significant information for them to carry with them into their adulthood. Many high school graduates will enroll in a community college or a 4-year university and will be targeted by credit card companies because they lack the knowledge on how important credit is and how to avoid debts. This is not only a worry shared by the graduating students but by the parents as well. MasterCard gave a survey to its cardholder members and 64 percent of these adults said they were worried that their
Malone, K., Stewart, S. D., Wilson, J., & Korsching, P. F. (2010). Perceptions of financial well-
...seat to financial stability. As the economy has begun to improve, more people are able to leave their parents’ house and create their own life as individuals.
My financial situation has not been the most stable throughout my post-secondary education. At the moment I have a part time job while I am at school. Having a job while I am at school does effect my performance, however I am still able to do very well. Over the course of my post-secondary education, my financial situation had become so severe that I was not sure if I should even complete school. Gladly, I am still in school and am working towards my goal however, things are not yet that bright financially.
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
bank made me realized that less fortunate people do anything to be able to eat
The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).
Following the trend of economy, it is important to investors to understand that strong economy creates strong stock market. To elaborate further, as stock prices are increased by current and future expectations of earnings, thus without a strong economy it would be difficult for the companies to increase and sustain their earnings (Kong 2013). The economy development is usually calculated using the gross domestic product of a countries. On the other hand, a change is the stock price can also cause a major impact to the consumers and investors directly. Hence, a loss in confidence by investors can cause a downturn in consumer spending in the long term, which will also affect the economy’s output (Aysen 2011). The graph below shows the relationship of stock market price (KLCI) and the GDP of Malaysia in 2009. Thus, it can be concluded that the economy and the stock market has a positive relationship.
Credit companies and banks make it very easy for families to spend money they do not have. For instance, credit cards are commonly accepted in stores, restaurants, and many other establishments. Parents sometimes feel that they need to buy their children everything they want, regardless if the money is not in their wallets. They also live such busy lives, making it hard to cook a meal at home. Parents find it more convenient to go through a drive-thru or to dine out instead because it saves time. On the other hand, they are spending extra money they do not have. Families also like to go on vacations that they cannot afford. Charge vacation trips it all on credit cards. Meanwhile, only able to make the minimum payments on them. They probably do not consider the interest rates that these credit cards have. Another situation is when one of the parents decide to buy a car without having a down payment. Financing cars paying loans with massive interest rates. Sometimes this occurs when they see someone they know buy a brand new car, so they think that they need one too. This is known as competing with the Joneses. Many parents and children want what everyone else around them has. However, the parents may believe they can afford it, but in reality all the overspending adds up an...
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.
They observed that millennials have less trust in banks and financial institutions because of the Great Recession. Millennials are more educated when it comes to financing big purchases compared to previous generations. The research also shows that 80% of millennials believe they should start saving for retirement as soon as possible. Most millennials were making their break in the “real world” when the Great Recession broke out, not only did this affect their trust in financial institutions, but it also made them take financial matters into their own hands. Millennials financial stability is on the rise and growing at a much faster rate than their counter generations. Millennials are becoming more diverse with their investment options and especially taking into consideration the need to save for their future. This article exemplifies this case for millennials and their