Financial literacy for oneself and economic progress

FINANCIAL literacy has become a buzzword in the world these days.

The Covid-19 pandemic certainly has a role to play. The same goes for digitization with the rise of digital and cashless transactions.

All this can sometimes make us forget that we really spend money with virtual transactions and not with coins and ringgits in our hands.

The world is changing so fast and the future clearly lies in digital finance as many reports have suggested.

It also means that financial literacy is of 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 people.

Nepal believes, according to reports, that “sustained prosperity (in a nation) also means more people need to be financially literate.”

India believes that financial literacy is key for its millennials.

It is also the same here.

But are there enough programs that financial literacy can be scaled up to reach people in even the smallest villages?

This is so since people are inundated with choices given the advancements in technology. Some have taken harmful decisions without realizing it, most often in the lure of quick gain.

Many surveys around the world have pointed to a lack of financial literacy awareness as a factor in why people don’t have enough savings in retirement.

The Organization for Economic Co-operation and Development survey conducted last year also found that young adults have some of the lowest levels of financial literacy.

Simply put, financial literacy is knowing your relationship with money.

How well do you manage your money – savings, investments, debt, expenses, compound interest, inflation and retirement.

Having the skills and understanding will put you in control of your finances to allocate your income to various goals and hopefully all of this will translate into better life experiences.

The good thing is that there is a strong desire among young people between the ages of 18 and 29 who want to “be successful with 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 is more programs to help them and that should be an ongoing effort, not a one-time thing.

Recently, RinggitPlus partnered with Saito University College to offer some programs so that students are financially prepared as they enter the workforce.

There are many other programs available online.

Coursera offers programs on financial planning for young adults, as well as financial markets.

Playmoolah and GoHenry are global sites for young children to learn money management. This will hopefully promote healthy financial habits so they understand the difference between their wants and needs and spend wisely.

Several agencies such as Credit Counseling and Debt Management Agency, Malaysia Deposit Insurance Corp, Bank Negara, Securities Commission, Multiply.org, and Financial Education Network offer various financial literacy aids.

They have programs in addition to videos posted on their websites, and certainly information on how to avoid scams.

Essentially, how much more can a country progress economically if its citizens are not financially aware and awake?

Therefore, more efforts are needed to raise the level of financial literacy in this country so that more people can make the right choices and decisions in a digitalized world.

“With the right approach to financial education, people can contribute more productively to inclusive growth and a better quality of life,” says a report.

Another report added that “unless we improve our financial decision-making, inequalities in society will continue.”

Sarah J. Greer