Why financial literacy matters – The Royal Gazette

Money literacy: Financial literacy can have a significant influence on your life (Photograph courtesy of pixabay.com)

Yes, I am writing about financial literacy again. No matter where you look, it has become a global buzzword, laden with concern, now generating significant increases in various initiatives in various countries to develop, publicize and provide access and exposure to teaching programs. from financial literacy topics for adults to recommendations for starting primary school.

Why now? There are two overriding factors, in my view, which both illuminate important issues of harmony in community living.

First factor: The hasty and unexpected onset of Covid-19 and its long period of exposure and spread in communities has torpedoed families and community finances around the world.

When you are too sick to work, when you have a strong fear of losing your job because no one is shopping, eating out, or buying anything but basic necessities, when you have lost an important salaried owner of a two-earner family, when a loved one (or more) has passed away, or when the stress of what seemed like never-ending health issues, changing of the caretaker, home schooling, work-from-home deadlines have overwhelmed even the most serene of people, leaving so many to also face severe financial savings decimations.

Factor Two: Reports and surveys from educators, politicians, financial leaders, banking and lending institutions, consulting professionals, governments and non-profit organizations in the North Atlantic (U.S. United Kingdom, Canada) and the OECD – all far more intellectually astute and influential than yours – is that despite existing valid financial literacy programs, analyzes of student and adult scores on financial understanding of base remained static for at least a decade. In some countries’ test statistics, high school students have actually lost marks over the past decade.

A review of the comments on national test results in our three largest neighbors is as follows:

UK: financial literacy was added to the secondary school curriculum in 2014, while a survey of UK adults in 2021 said ‘UK schools are failing to teach students about personal finance, according to new research. In a survey commissioned for the FinancialTimes by Ipsos Mori, 90% of people in England admitted to learning “nothing at all” or “not much” about finance during their schooling. According to the World Bank, two in three of the world’s population, including one in three in the UK, are financially illiterate.

Canada: adult population financial literacy surveys reported better results than the US and UK.

WE: surveys indicate that financial capability is only around 50%, with many Americans struggling with financial stress, with 78% of adults living paycheck to paycheck (2017 Career Builder survey) .

This is very concerning on an individual, family, community, state, national and regional basis, relative to the economic success of a modern society and the personal financial well-being of families and their communities.

Finances haven’t gotten any easier – in many areas they are more complicated than ever, while credit/debt is easier than ever to obtain, with the ramifications of these loan programs still not fully understood.

Financial fraud is rampant among the elderly, especially, as they can become high theft targets if they are not internet savvy. The Canadian Bankers Association has partnered with ABC Life Literacy to introduce digital literacy education for seniors and adults who are not internet savvy.

Three new buzzwords are also appearing. Financial well-being, financial resilience, and financial capability: all three are preferable to literacy, since it implies that if one does not participate in a program, one is illiterate. Almost everyone in modern societies has some financial literacy, but what they lack to be more successful is how to solve financial problems for the best outcome – and that requires having the confidence to improve financial literacy. .

It’s not just about money, financial well-being begins with attitudes toward oneself, one’s relationship to money, and using monetary concepts to make the best financial decisions.

That’s not all.

Financing isn’t just buying or selling something to feel good about, helping you move up the ladder of acquiring assets, buying insurance, applying for credit cards, reviewing your employment status, receive a pension, open an investment account, make a will, etc…

The law is strongly linked.

Virtually all financial decisions have positive or negative consequences, all related to key aspects of the law. Yes, the law, understanding its impact on contracts, implied and actual liabilities, fraud, commerce, ethics, effect on related parties, is critical to all parties’ contractual responsibilities.

Financial capability is now an analysis of human behavior on a global scale – understanding what you know about finance, how you generally behave in the face of financial problems, and how you can find the resources to make the best financial decision for you. and your family. When you are able to go through this process comfortably and successfully, you have financial resilience and are in a state of financial well-being.

What’s better than that?

How do you think we Bermuda Islanders would score on a financial literacy test?

Sources

“Half of UK adults need ‘urgent help’ to manage their money”, Financial Times, Claer Barrett

“Telling Statistics of Financial Literacy in the United States”, OppU, Samantha Rose, https://www.oppoans.com/oppu/articles/statistics-financial-literacy/

“Canadians get a passing grade on financial knowledge, but more than half underestimate their knowledge,” new poll finds, Canada Life

2020 OECD/INFE International Survey on Adult Financial Literacy,

https://www.oecd.org/financial/education/launchoftheoecdinfeglobalfinancialliteracysurveyreport.htm

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Martha Harris Myron’s book, The Dawn of a New Beginning: Your Basic Financial Review to Dramatically Improve Your Lifestyle, is now available on Amazon. The book is the first in the Bermuda Islander Fundamental Financial Planning Primer Series to promote financial literacy in Bermuda.

The book is available in E-book format ($2.99) with linked video/podcasts and Paperback (297 pages) $36.18. https://tinyurl.com/2bd7b4pI

All proceeds are donated to registered charities in Bermuda – in 2022, the Bermuda Sloop Foundation.

Martha Harris Myron, a Bermuda native with US connections, is the author of Bermuda Islander Fundamental Financial Planning Primers, published by Amazon, and a consultant for Olderhood Group Bermuda Ltd.

Sarah J. Greer