FinSight

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Introduction:

In today's modern complex financial world, a clear understanding of personal finance for many is crucial. Unfortunately, however, a significant portion of the world's population in various countries lack even the most basic education in the world of financial literacy. The lack of education regarding financial literacy is severely detrimental, especially on the youth, since it encompasses the crucial financial skills of budgeting and investing.

Causes/Reasons:

As of the present day, there are multiple factors that prevent the education of financial literacy. The most crucial of which is the fact that most educational systems around the world do not mandate the education of personal finances in neither the primary nor secondary school levels. In addition, the education of financial literacy is also gapped due to socioeconomic classes, with the higher income classes being much more likely to be educated rather than the lower income classes. These detrimental causes results in the youth having little to no knowledge on how to manage their own finances

Consequences:

Due to the ever-growing list of financial products, services, investment platforms and more, the dire need of proper financial literacy for all is only growing. The complexity of these services requires consumers to look ahead and recognize potential financial pitfalls/upsides associated with these various services. However, without a proper education in financial literacy, the youth will be subject to making potentially life changing financial mistakes or missing out on life changing financial upsides.

In a more personal perspective, a lack of financial literacy can severely impact many individuals throughout their entire lives. The lack of basic education regarding financial literacy will likely lead to excessive amounts of debt, along with poor credit scores and low savings rates. These actions, while harmless at the beginning, can really create life-altering consequences in the future. For instance, a lack of proper financial foundation with decent savings and good credit scores may lead to the inability to handle unexpected expenses and to build future retirement.

Even at a more macro-societal level, a widespread lack of financial literacy has detrimental effects regarding the economy. For instance, it contributes to higher rates of bankruptcy, which in turn results in lower consumer spending and a further reliance of social welfare program. In terms of economics, it will result in a slower economic growth, which leads to detrimental consequences for all socioeconomic classes.

Conclusion:

The societal issue of financial illiteracy is extremely urgent. Despite the issue being caused by educational/socioeconomic gaps and cultural attitudes, the key solution lies in the collective effort of the common people to take responsibility to educate those less fortunate. A better financially educated population will lead to better outcomes for various individuals and various economies.

Reflection

I chose to build FinSight, a financial simulator in order to potentially build allow many people, even those financially illiterate, to be able to potentially manage their own finances properly. In addition, I wanted to give financially illiterate people the chance to be able to create proper financial plans, which in turn, will assist in preventing financial ruin.

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