Professional Documents
Culture Documents
pivotal
pivotal
the most pressing one through a well-crafted policy? According to William MacAskill, in
order to create the greatest impact, we should target issues that are: big in scale,
tractable and neglected (1). In context, one issue that arguably meets all the criteria is a
lack of financial literacy. What is financial literacy? It is the master key to un-coding the
cryptic jargon of the financial world and be able to unlock economic success and
stability, it’s the sheet music to organize a cacophony of dissonant and contradictory
financial advice, to a melodious harmony of prosperity and wealth, it’s the stairwell of
steps in a dingy attic, guiding those below to reach the light, a light which brings about
not only personal financial well-being but also contributes to the broader economic
health of communities and societies. Financial literacy empowers individuals to make
informed decisions about budgeting, saving, investing, and managing debt. It serves as a
beacon that illuminates the path toward responsible financial behavior, but many are
deprived of such glow in their lives leading them to be stuck in darkness, a darkness
which devours livelihoods. Alarming statistics reveal that 35% of Americans reported
they have been in debt almost their entire lives (2), the average estimated amount of
money that lacking knowledge about personal finances cost people was $1,819.
Extrapolating the results to represent the 254 million adults who live in the U.S., lack of
financial literacy cost Americans a total of more than $436 billion in 2022(3), and
roughly 16% of suicides occur in response to financial problems in the US (4). Based on
these statistics, it is evident that the absence of financial literacy manifests as a silent
storm in society, quietly wreaking mayhem on the lives of millions which goes largely
belittled and unacknowledged.
The IKEA effect, named after the Swedish furniture giant, describes how people tend to
value an object more if they make (or assemble) it themselves. More broadly, the IKEA
effect speaks to how we tend to like things more if we've expended effort to create them
(5), this can be harnessed to enhance financial education and decision-making.
In addition, the policy can also entail the government working with different institutions
to make resources accessible to everyone. This can include: offering financial literacy
workshops in workplaces, schools, and community centers. This can also encourage the
adoption of financial literacy from even an early age, allowing the future generations a
much more positive and stable lifestyle.
In conclusion, the EmpowerFin strives to foster citizens with the knowledge and
confidence needed for a financially prosperous future. Through this transformative
policy, we can envision a society where the past statistics of staggering debt and
financial struggles give way to a brighter narrative of informed decision-making,
economic stability, and thriving communities. The future, paved by EmpowerFin,
promises to be a utopia where individuals are not shackled by financial illiteracy but are
instead equipped to make choices that lead to financial well-being and a legacy of
prosperity for generations to come. In embracing the ideals of William MacAskill's
framework, EmpowerFin emerges as the catalyst for a more hopeful future benefiting
the next to come, where the neglected issue of financial illiteracy is no longer a silent
storm but a passing shadow in the light of financial empowerment. This is why I believe
EmpowerFin is the policy that today’s governments should implement to greater
consider the interests of future generations.
Bibliography:
1. “What is effective altruism?”, Effective Altruism (2022)
https://www.effectivealtruism.org/articles/introduction-to-effective-altruism
(accessed 3/10/23)
2. M.E.Cagnassola “Here’s How Much Debt the Average American Has in 2023”,
Money (2023)
https://money.com/average-american-personal-debt-amount/#:~:text=Howeve
r%2C%2035%25%20of%20Americans%20reported,high%20for%20credit
%20card%20 debt. (accessed 10/10/23)
3. L.Lach, D.Nzorubara “The Cost of Financial Illiteracy”, International Federation
of Accountants (2023)
https://www.ifac.org/knowledge-gateway/contributing-global-economy/
discussion/cost-financial-illiteracy (accessed 10/10/23)
4. D.Body, Financial Security Program”The Burden of Debt on Mental and Physical
Health” Aspen Institute (2018)
https://www.aspeninstitute.org/blog-posts/hidden-costs-of-consumer-debt/
(accessed 10/10/23)
5. “Why do we place disproportionately high value on things we helped to create?”,
The Decision Lab (2019) https://thedecisionlab.com/biases/ikea-effect
(accessed 17/10/23)
6. S.Freeman et al. “Active learning increases student performance in science,
engineering, and mathematics”(2013)
https://www.pnas.org/doi/pdf/10.1073/pnas.1319030111 (accessed 17/10/23)