FINANCIAL literacy has become such a buzz word globally these days.
The Covid-19 pandemic certainly has a part to play. So has digitalisation with the rise in digital and cashless transactions.
All these can sometimes make us forget that we are really spending money with virtual transactions and not with coins and ringgit in our hands.
The world is changing so fast and the future is clearly towards digital finance as many reports have suggested.
This also means that financial literacy is of utmost importance and our behavioural skills towards money management is vital, as the financial decisions we make with our money will have a lasting impact on our well being.
Even countries such as Nepal and India are considering to include financial literacy programmes to help their people.
Nepal believes, according to reports, that “sustained prosperity (in a nation) also means more people must be financially literate.’’
India believes that financial literacy is the key for its millennials.
It is also the same here.
But are there enough programmes out there so that financial literacy can be widespread to reach people even in the smallest of villages?
This is so since people are inundated with choices given the technological advancement. Some made harmful decisions without realising them, most often in the lure for quick gains.
Many surveys that were carried out globally pointed to the lack of awareness on financial literacy as a factor why people don’t have enough savings when they retire.
The Organisation of Economic Co-operation and Development’s survey conducted last year also revealed that young adults have among the lowest levels of financial literacy.
Simply put, financial literacy is about knowing your relationship with money.
How well do you manage your money – savings, investments, debt, expenses, compounding interest, inflation and retirement.
Having the skills and understanding will allow you to be in control of your finances to allocate your income towards various goals and hopefully all these will translate into better life experiences.
The good thing is that there is a high desire among youths aged 18 and 29 who want to “achieve personal finance success’’, according to a study by the Malaysian Financial Planning Council and Universiti Putra Malaysia.
This means there is willingness on the part of the youths to improve their social economy.
What we need is more programmes to help them and it should be a continuous effort, not ad hoc.
Recently, RinggitPlus teamed up with Saito University College to provide some programmes so that students are financially prepared when they enter the workforce.
There are many other programmes available online.
Coursera offers programmes on financial planning for young adults, and also on financial markets.
Playmoolah and GoHenry are global sites for young children to learn about money management. This will hopefully nurture healthy financial habits so that they grow to understand the difference between their wants and their 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 assistance on financial literacy.
They have some programmes besides the videos posted on their websites, and certainly information on how to avoid scams.
Essentially, how much more can a country progress economically if its citizen 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 digitalised world.
“With the right approach to financial education, people can contribute more productively to inclusive growth and better life quality,’’ said a report.
Another report added that “unless we improve our financial decision making, inequality in society will continue.’’
