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Consumer Economics Essay

I have realized that financial literacy and responsibility goes beyond the bottom line and paying for bills or being compensated, it also requires an understanding of the relationship of planning, budgeting and forecasting among others. As U. S. Senator Wayne Allard has stated as part of his financial literacy advocacy, “A solid financial education can help people own a home, live a comfortable retirement, and finance an education for themselves or their children” (“U.S. Sen. Wayne Allard Kicks Off Financial Literacy Month”, 2007). I believe that these words echo the objectives of Planning Your Financial Future: there is a need for proactive commitment in developing the skills that will allow us to maximize assets not only for current needs but also for future ones (Boone et al, 2005)

The first assignment seemed very straightforward: since it focused on what one wanted, it was easy enough to establish my financial goals. Every goal was important and had to be accomplished urgently. By the second assignment when one was asked to make an inventory of one’s skills for the realization of goals, there is a growing realization that personal financial management is not as straight as one’ would hope it to be. There

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is a need to match one’s skills for specific goals, a need to develop competencies for those that are to be accomplished and a need to accept what is beyond possibility.

I can honestly say that there were times between accomplishing the first two assignments that I wondered whether the goals were realizable or not. The succeeding assignments that involved budgeting, tracking assets and liabilities as well as planning for one’s future allowed the creation of strategies for the accomplishment of goals. More importantly, the exercise communicated the idea that financial management is a process and that responsibility for one’s own financial health depends solely on personal commitment.

For example, in creating one’s budget can be arguably one of the most daunting tasks for anyone especially if one has to curb expenses to make it fit into the budget. At the same time, one also has to consider the cumulative effects: having an negative cash outflow of $158.00 for one time may not seem so much but consider the perspective that it also means that the deficit to be carries over to the next period. More, if spending remains the same then there one will eventually live from paycheck to paycheck.

 The last three exercises which involved debt, insurance and retirement brings home the importance of financial planning. The issue of dept is very critical: debt should only be acquired when there is a definite means to settle them. Debt should be considered a risk, it should be avoided in generally however if not, one should choose carefully and wisely so that the risk can be justified by financial capacity or competency. Similarly, though one can be covered by insurance, one should not be dependent on it because most of the time, any proceed that can be derived from are far less then one actually needs. There is a need to prepare for the unexpected regardless of the security or insurance that is to be acquired. Finally, there is a need to realize that one has to be able to sustain one’s financial status or capacity during retirement. Retirement can be a time to enjoy the fruit of one’s labors however this can only be possible if one is able to set something aside for the future.

After accomplishing assignment plan documents for the course, there is a realization of the need for financial literacy and management. One’s financial health is dependent on one’s ability to recognize one’s personal assets, liabilities, and the ability to set financial goals and the being able to create strategies to realize these goals. Beyond the issues involving property rights and financial autonomy, there are important social implications related to personal financial health. It has the potential to improve the lives, support social development and increase the quality of life in society.


Boone, Louis E., Kurtz, David L. and Hearth, Douglas (2005). Planning Your Financial Future. South-Western College

U.S. Sen. Wayne Allard Kicks Off Financial Literacy Month (2007). Retrieved on April 5, 2007 from http://allard.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=232168&Month=3&Year=2007


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