Core Concept: Foundational Factors

Foundational factors make up part of the Personal Finance Ecosystem FrameworkFoundational Factors are the wide variety of aspects that influence each part of the framework at a fundamental level. These factors can broadly be grouped into the following categories:

  • General Skills and Competencies include basic literacy and numeracy, problem solving skills, critical thinking, information literacy, executive function, self-advocacy, communication, persistence, and other similar competencies.
  • Values and Beliefs include internal factors like motivation, affect, attitudes, cognitive bias, time discounting, risk preference, stress, trust in the financial system, and other mental constructs.
  • Family and Culture include personal factors like family socialization and family composition, as well as culture.
  • Socioeconomics and Geography include overarching factors like the state of the economy, socioeconomics and systemic inequality and issues specific to a particular region or locale.

While the factors are germane for all individuals, the way in which they collectively influence a specific individual are unique.

NOTE: Foundational Factors are broadly categorized for ease of information sharing. The groupings themselves are not consequential, so long as the factors themselves are foundational.

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