Week 4: Importance of financial and economic knowledge

Definition

Based on APEC Guidebook on Financial and Economic Literacy in Basic Education

Financial literacy is knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well – being of individuals and society, and to enable participation in economic life. (OECD)

Financial Capability is the internal capacity to act in one’s best financial interest, given socio – economic environmental condition. It encompasses knowledge, skills, attitudes and behaviour. (World Bank)

There is growing sense of agreement that financial and economic literacy must go beyond cognitive ability and the transfer of knowledge, towards improving capability of individuals. In general, the definition of the broader term “financial capability” conveys both an individual and a structural idea, combining a person’s ability to act with their opportunity to act (Johnson & Sherraden, 2007), hence it is both the individual and the environment that has needs for development. Take a look at the definition of financial literacy discussed at the APEC Workshop on Financial and Economic Literacy in Basic Education, April 24 -26, 2013, Beijing, China.

Financial security after an athletic career isn’t always ensured:

Financial literacy for managers

Sport managers also need to understand financial processes! Financial management and accounting knowledge is vital to success as integral part of strategy.

How to deal with Uncertainty

Uncertainty can lead to financial and economic challenges in an environment with certain uncertainty always to be e taken into account. This has been discussed in the decision making face-to-face module and here we suggest expanding your knowledge by watching the following video and checking the further reading material.

Assignment

Assignment 4.1: Calculate management risks

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