Lesson 10 - MsArgos/RMI_2501_Fall_2026 GitHub Wiki

After carefully reading Chapter 7, find your trio here, and then write a 100-word paragraph on the chapter's main limitation. Cite one authoritative source in-text to support your critique and add the full reference at the end of the paragraph.

PS. Be ready to briefly share in class what you think is the best critique and why.

Group 1: This chapter, much like most of the rest of this textbook, feels far too shallow in its explanations on most of the topics that it discusses and it feels incomplete. For example, it discusses Chapters 7 and 13 bankruptcy but barely mentions any difference; but, crucially, it is fundamentally lacking in its explanation that there are types of debts that neither bankruptcy nor death can save you from. In the case of things like hospital debt, they'll literally shove your debts onto the next of kin after you die and you cannot declare bankruptcy to avoid student loans (Can Bankruptcy Discharge Student Loans? (2026 Guide), 2026). (https://usbankruptcy.net/resources/student-loans-bankruptcy/)

Group 2: One limitation of this chapter is that it overlooks real-world situations, assuming that individuals always have stable incomes and predictable expenses. In reality, unexpected financial shocks like sudden medical emergencies or income drops, along with macroeconomic shifts like inflation or economic slowdown easily disrupt these neat textbook models. Although the chapter recognizes these factors, many of its strategies are based on the assumption that people are able to simply respond to those situations. According to the Federal Reserve 2025, only 55% of U.S. adults had enough emergency savings to cover three months of expenses. This makes some of the chapter's strategies less realistic for people with limited financial resources.

Reference: Yamaguchi, Kazuo. “Japan’s Gender Gap – IMF Finance & Development Magazine | March 2019.” IMF, International Monetary Fund, Mar. 2019, https://www.imf.org/en/Publications/fandd/issues/2019/03/gender-equality-in-japan-yamaguchi. Accessed 5 Oct. 2026.

Group 3: The chapter's main limitation is that it assumes readers already have the knowledge to use the financial tools it describes. It tells people to ladder CDs, compare credit card APRs, and match debt to the life of an asset, but offers limited guidance on applying these strategies and checking current financial rules. Grohmann et al. (2018)found that higher financial literacy is associated with greater use of formal financial services, with an unweighted country average of 36.6 percent financial literacy in 2014. The chapter's advice may work best for people who already understand finance, offering beginners insufficient support for evaluating recommendations.

Grohmann, A., Klühs, T., & Menkhoff, L. (2018). Does financial literacy improve financial inclusion? Cross country evidence. World Development, 111, 84-96. https://www-sciencedirect-com.libproxy.temple.edu/science/article/pii/S0305750X18302122

Group 4: The main limitation of Chapter 7 is that it does not fully explain how credit card rewards can be incorporated into a personal budget and focuses heavily on the U.S. financial system. For example, a 2% cashback card could return $16 monthly on $800 of spending, which could help cover groceries if the balance is paid in full. However, FDIC insurance, FICO scores, credit reporting agencies, and financial regulations may differ across countries. According to the OECD, financial systems and consumer financial regulations vary internationally (2023). Therefore, readers should consider reward strategies and their country’s rules when applying this advice.

Reference: OECD. (2023). OECD/INFE 2023 international survey of adult financial literacy. OECD Publishing. https://doi.org/10.1787/56003a32-en

Group 5: One limitation of this textbook is that some topics are not discussed in enough detail. This textbook tells us about “Direct Deposit”. In this chapter, there is the positive thing about direct deposit, such as a paycheck is directly deposited into a savings account and for the recipient, direct deposit is also fast and secure, and it makes it easier to divide money between different accounts. However, this textbook should be mentioned about cons of direct deposits because it is security risks, such as hacking and cyberattacks. Once your paycheck is deposited into your bank account, you may have less flexibility to access cash immediately. For example, if you need part of your paycheck in cash, you have to withdraw it from an ATM or bank branch (White, 2025). Another limitation of the chapter could be that it does not address what happens if people have technical difficulties or their bank accounts freeze. Electronic direct deposits can be problematic because banking systems can go down, and bank accounts can be frozen if there is some sort of error. https://www.stltoday.com/exclusive/article_6d8dfa19-9d08-56b3-829b-154fd29286ab.html

Group 6: The main limitation of the chapter is that while it lists multiple ways to borrow money, it does not compare and contrast the various facilities. Understanding the key differences, positives and negatives, risks involved in terms of all of the methods is important to make an informed decision. Although it can be self-explanatory by reading the different sections, but having a side-by-side comparison helps understand the concepts to make any future decisions. Additionally, there are other things to consider as well, like how they can impact one’s credit score, and how eligibility differs for the options (McFarlane, 2026). (Reference: McFarlane, G. (2023). Personal Loans vs. Credit Cards: What’s the Difference? Investopedia. https://www.investopedia.com/articles/personal-finance/041415/pros-cons-personal-loans-vs-credit-cards.asp)