Select One Of The Scenarios To Focus Your Causes

Select One 1 Of The Scenarios On Which To Focus Your Causes And Effe

Select one (1) of the scenarios on which to focus your causes and effects paper. Research the topic and include credible sources to support claims. Identify your purpose clearly, incorporate audience needs, establish a desired tone, and organize information/claims effectively. The scenarios include:

1. The President of Strayer University asks you to write about the major causes and effects of stress on college students, to help improve the student experience.

2. The director of your state unemployment agency asks you to write about the causes and effects of unemployment on individuals and families, to aid outreach efforts.

3. The CEO of Bank of America asks you to write about the causes and effects of not maintaining a personal budget, to help the company's communication department develop budget forms.

Write a four to five (4-5) page academic paper that includes a clear thesis statement, describes the major cause, identifies a leading second cause, and discusses two (2) economic effects and two (2) effects on people. Ensure a coherent structure with an introduction, body, and conclusion. Support claims with three credible sources (excluding Wikipedia or other non-academic websites). Follow formatting guidelines: double-spaced, Times New Roman font size 12, one-inch margins, APA or specified formatting for references. Include a cover page with title, student’s name, professor’s name, course, and date; the cover and reference pages are not part of the page count.

Paper For Above instruction

The decision to focus on a particular scenario among those provided is a crucial step in developing a comprehensive causes and effects paper. Each scenario offers unique insights into societal, economic, or individual challenges, and aligning your research and analysis with one of these contexts allows for a targeted examination of causative factors and their ramifications. In this paper, I will choose the scenario involving the causes and effects of not maintaining a personal budget, as requested by the CEO of Bank of America. This topic is particularly relevant given the increasing importance of financial literacy and personal financial management in contemporary society, and it offers ample opportunity to explore economic and personal outcomes that influence both individuals and broader financial systems.

The thesis of this paper posits that neglecting personal budgeting stems from a combination of psychological, educational, and social causes, which in turn lead to significant economic consequences such as increased debt levels and financial instability, and personal effects including heightened stress and reduced quality of life. The causal analysis will identify key factors such as lack of financial literacy and psychological factors like impulsivity as primary causes, and a secondary cause like inadequate financial education at the school level. Understanding these causes is vital for developing effective strategies to promote better financial habits and literacy among consumers.

The major cause of not maintaining a personal budget can be attributed to a lack of financial literacy. Financial literacy refers to the knowledge and skills needed to manage financial resources effectively. Research indicates that many individuals lack basic understanding of budgeting principles, interest rates, credit management, and investment, which impairs their ability to plan and control their finances (Lusardi & Mitchell, 2014). This deficiency often results from educational gaps, where financial literacy is not emphasized in school curricula, leaving individuals ill-equipped to handle financial responsibilities. Moreover, psychological factors such as impulsivity and a tendency toward immediate gratification also play vital roles. These traits prompt individuals to prioritize short-term pleasures over long-term financial stability, leading to overspending and neglect of budgeting habits (Peters & Buxton, 2018).

A leading second cause is the inadequate emphasis on financial education within the school system. Many educational institutions do not incorporate comprehensive financial literacy programs, which leaves young people unprepared for financial decision-making in adulthood. According to the Financial Industry Regulatory Authority (FINRA), only a minority of high schools include personal finance in their curricula, contributing to a general lack of preparedness to manage budgets effectively (Financial Capability Study, 2018). This educational gap perpetuates a cycle where individuals enter adulthood without essential skills, increasing their likelihood of poor financial management and subsequent negative effects.

The consequences of neglecting personal budgeting extend into the economic realm, particularly through increased debt levels and financial instability. Without proper budgeting, individuals often rely heavily on credit cards or loans to meet expenses, which leads to accumulating high-interest debt. Research demonstrates a clear correlation between poor budgeting habits and higher debt-to-income ratios, often culminating in financial distress or bankruptcy (Lusardi & Tufano, 2015). Furthermore, inadequate budgeting contributes to wider economic instability, as a significant portion of the population might default on loans or accumulate unsustainable debt, affecting financial institutions and the economy at large.

On a personal level, neglecting personal budgets can cause heightened stress and a reduction in overall life satisfaction. Financial stress is one of the leading sources of anxiety among adults, and failure to manage finances increases uncertainty and feelings of helplessness. A study by the American Psychological Association (2019) revealed that financial worries are a major contributor to stress-related health problems, including sleep disturbances and depression. Additionally, poor budgeting often results in reduced access to essential resources and opportunities, impeding personal growth and life quality. Individuals may experience difficulty affording healthcare, education, or even daily necessities, creating a cycle of hardship and emotional strain.

In conclusion, the causes of not maintaining a personal budget are multifaceted, primarily involving a lack of financial literacy and insufficient educational emphasis on financial skills. These causes lead to significant economic effects such as rising debt levels and systemic financial instability, as well as adverse personal outcomes including increased stress and diminished well-being. Addressing these issues requires a comprehensive approach that enhances financial education at all levels and considers psychological factors influencing financial behavior. Promoting financial literacy and responsible money management can foster healthier financial habits, ultimately benefiting individuals and the broader economy alike.

References

• American Psychological Association. (2019). Stress in America: Stress and health. Retrieved from https://www.apa.org/research/action/stress-in-america
• Financial Industry Regulatory Authority. (2018). Financial Capability Study. FINRA Foundation.
• Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5-44.
• Lusardi, A., & Tufano, P. (2015). Debt literacy, financial experiences, and overindebtedness. Journal of Pension Economics & Finance, 14(4), 332-368.
• Peters, E., & Buxton, H. (2018). The psychology of financial decision-making: Impulsivity and self-control. Journal of Behavioral Finance, 19(2), 123-135.