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Why Financial Literacy Is Essential for Fixing a Broken Personal Finance System: A Review of Fixed: Why Personal Finance Is Broken and How to Make It Work for Everyone by John Y. Campbell and Tarun Ramadorai
Why Financial Literacy Is Essential for Fixing a Broken Personal Finance System: A Review of Fixed: Why Personal Finance Is Broken and How to Make It Work for Everyone by John Y. Campbell and Tarun Ramadorai
This review assesses John Campbell and Tarun Ramadorai’s book entitled Fixed. Why Personal Finance is Broken and How to Make It Work for Everyone. The volume is an excellent discussion of the research on household finances around the world. Most importantly, the authors examine how and why the financial system tends to fail instead of helping consumers and retail investors. Campbell and Ramadorai also propose solutions to the problem, including stronger regulation and simplified financial instruments. However, if the system is to work for most of us, an additional factor is required: better financial literacy. Indeed, enhancing financial knowledge is essential if people are to be empowered to make better financial decisions, guard against deceptive practices, utilize financial instruments to their benefit, and take advantage of the opportunities offered by financial markets and the government. Without such basic knowledge, regulation and simplified financial instruments will not fix personal finance.
