FINANCIAL literacy has become a buzzword around the world these days.
The Covid-19 pandemic certainly has a role to play. The same is true of digitization with the increase in digital and cashless transactions.
All of this can sometimes make us forget that we are really spending money with virtual transactions and not with coins and ringgits in our hands.
The world is changing so fast and the future is clearly on digital finance, as many reports have suggested.
It also means that financial literacy is of the utmost importance and our behavioral money management skills are vital, as the financial decisions we make with our money will have a lasting impact on our well-being.
Even countries like Nepal and India are considering including financial education programs to help their populations.
Nepal believes, according to reports, that “lasting prosperity (in a nation) also means that more people need to be financially literate. “
India believes financial literacy is key for millennials.
It is also the same here.
But are there enough programs that financial literacy can be mainstreamed and reach people, even in the smallest of villages?
This is so since people are inundated with choices given the advancements in technology. Some have made bad decisions without realizing it, most often in the lure of quick wins.
Numerous surveys conducted around the world have highlighted the lack of awareness of financial literacy as a factor explaining why people do not have enough savings when they retire.
The Organization for Economic Co-operation and Development survey last year also found that young adults have some of the lowest levels of financial literacy.
Simply put, financial literacy is about knowing your relationship with money.
How well are you managing your money – savings, investments, debt, expenses, compound interest, inflation and retirement.
Having the skills and understanding will allow you to be in control of your finances to direct your income to various goals and hopefully all of this will result in better life experiences.
The good thing is that there is a great desire among 18 and 29 year olds who want to “be successful in their personal finances”, according to a study by the Malaysian Financial Planning Council and Universiti Putra Malaysia.
This means that there is a will on the part of young people to improve their social economy.
What we need are more programs to help them and it should be an ongoing effort, not a one-off.
Recently, RinggitPlus partnered with Saito University College to offer programs so that students are financially prepared when they enter the workforce.
There are many other programs available online.
Coursera offers programs in financial planning for young adults, as well as in financial markets.
Playmoolah and GoHenry are global sites for young children to learn about money management. This will hopefully promote healthy financial habits so that they learn to understand the difference between their wants and needs and spend wisely.
Several agencies such as the Credit Counseling and Debt Management Agency, Malaysia Deposit Insurance Corp, Bank Negara, Securities Commission, Multiply.org, and Financial Education Network offer various financial education aids.
They have programs in addition to the videos posted on their websites, and certainly information on how to avoid scams.
Essentially, how much further can a country make economically if its citizens are not financially aware and awake?
Therefore, more effort is needed to raise the level of financial literacy in this country so that more people can make the right choices and make the right decisions in a digitalized world.
“With the right approach to financial education, people can more productively contribute to inclusive growth and a better quality of life,” a report said.
Another report adds that “unless we improve our financial decision-making, inequalities in society will continue.”