Financial Literacy: Are We Teaching Enough?

Financial literacy is relatively uncommon in Singapore. When I speak with my friends, colleagues and surf forums populated by young people, I realise the level of financial literacy in Singapore is quite low. What do I mean by that?

In my formal education from primary 1 up to university, I never learned about personal finance. About how to plan for my finances, understanding about different types of investment instruments that would be useful to me personally. The most ironic thing is that I am an accountant by training and I should be the one who has picked up the most about financial knowledge. Err... Yes and No.

Yes --in the sense that the financial management modules in the university taught concepts that were useful as someone who would work in an organisation and manage their finances but not your own!

No --in the sense that 95% of the personal finance knowledge useful to me as an individual has come from reading books on personal finance and investments and NOT from my textbooks in school.

Many of us encountered questions about financial planning only when we got the first cold-call from a insurance agent or financial planner. That is not the best introduction to the world of personal finance as the financial planner has an interest to sell a product to you to make a commission. So is there really sufficient training in financial literacy?

I feel that there is insufficient financial literacy skills being taught in schools and that more unbiased consumer education should be made available. A quick search on the internet reveals that the MoneySENSE national financial education program was only launched in 2003! Only 4 years ago? For a country that prides itself as a financial hub, it appears that consumer education has taken a backseat for too long.

The MoneySENSE website quotes,

"The MoneySENSE programme covers 3 tiers of financial literacy:

• Tier I - Basic Money Management - which covers skills in budgeting and saving, and provides tips on the responsible use of credit;
  
• Tier II - Financial Planning - to equip Singaporeans with the skills and knowledge to plan for their long-term financial needs; and
  
• Tier III - Investment Know-How - which imparts knowledge about the different investment products and skills for investing."

That sounds interesting and those of us who are total newbies it would be worth our while to go there. The schedule for May includes the following:

"MoneySENSE Talks in April and May 2007

1) Topic: Financial Planning For Families
jointly organised by Singapore College of Insurance (SCI) and the Securities Investors Association, Singapore (SIAS)

- Mountbatten Community Centre, 12 May 2007, 2:30pm - 4:30pm (Mandarin)

- Chinese Development Assistant Council (CDAC), 26 May 2007, 3:00pm - 5:00pm (English)

To register, please call 6227 2683"

While MoneySENSE's initiatives are commendable. I am of the view that we should incalcuate in our children and youth sufficient financial literacy lifeskills to be able to navigate through this murky waters known as personal finance. The overload of information available requires an educational curriculum that gives a clear framework on how one views personal financial management

The Association of Banks in Singapore and MoneySENSE have tied up to come up with this program, "Savings - the Sensible Habit" to inculcate savings habit amongst primary school students. Squirrel savers program anyone? For those of you who were studying in primary school around the 70s and 80s will remember POSB's role in helping children save. Is this sufficient? Should we be doing more?

The internet has opened up more channels of information available to the e-savvy generation. I hope that more people avail themselves to the excellent online resources and also invest in educating themselves in personal finance as the rewards we reap are for the rest of our lives.

Be well and prosper.