As advanced as our school systems are, it’s a shame that they repeatedly overlook one essential form of education: financial literacy.
The failure to equip our youth with basic financial know-how has long-term repercussions– and the numbers back it up. According to a survey by Standard Chartered, 62 per cent of millennials aged between 24 to 44 in Singapore have found it challenging to manage their day-to-day expenses since the onset of the pandemic (compared to 53 per cent for those aged over 45).
In fact, according to the same survey, only 18 per cent of millennials feel in control of their finances. They’re also more likely to engage in poor financial habits, like borrowing money from friends and relatives (15 per cent), paying the minimum sum on their credit cards (38 per cent) and speculating excessively to make quick gains (39 per cent), another study by OCBC reveals.
Millennials believe in investing but find it anxiety-inducing
Needless to say, financial security and anxiety are something that many millennials wrestle with. But I do wonder: is this for lack of trying?
Interestingly, a new study by our partner Franklin Templeton reveals that while one in two millennials agree that it’s good to start investing at a young age, one in three expressed that they find it complex and feel anxious about the idea. Among reasons like a lack of budget, the hesitation to start also stems from a lack of investment knowledge.
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This suggests that while millennials do recognise that investing early is beneficial, the “how-to” is still elusive to many. Could this indicate a real education gap in money matters among the younger generation? I’d think so.
This begets the question: how can we get better at teaching financial literacy and instilling good financial habits in our young?
Financial literacy is an essential life skill, not a “nice to know”
Much like your health and wellbeing, financial education is a crucial life skill that directly impacts personal wellbeing.
Learning the basics of financial literacy (like money management, personal finance, savings, investing and debt) can help establish a strong foundation for healthy money habits. It pays off to start young.
The challenge is that most youths aren’t equipped with the proper financial knowledge. In schools, teachers don’t teach about personal finance. Recent policies to introduce individual finance courses in tertiary schools in Singapore are encouraging but seem to have fizzled out in traction.
In most homes, money is often a taboo topic to discuss with the kids, unless you’re lucky to be raised in a home where your parents are open enough or financially savvy to have that money talk.
This means that the onus is often on the young to take the initiative to learn their financial ABCs. While this is not necessarily a bad thing, the murky waters of the Internet financial advice can be a tricky one to wade.
Sifting good financial advice from the bad
The rise of social media means that youths are gleaning financial insights from their favourite influencers. A LendingTree survey in the US reveals that 41 per cent of Gen Z-ers have turned to personal finance advice TikTok (also known as #FinTok).
A growing segment in the app, #FinTok is a hotbed of financial advice that is often overly reductive at best or misguided.
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Our young should be getting their know-how from legitimate sources, so they have a strong foundation and are less swayed by clickbait financial advice and shiny new investment vehicles that are too good to be true.
This is why Autumn has made sure to develop an in-app financial literacy curriculum within the app. We’ve partnered with Franklin Templeton to roll out exclusive financial literacy content that caters to all levels of proficiency.
Called the Autumn Academy, users can seamlessly access a rich library of bite-sized financial education videos, infographics and more that they can learn and digest on the go.
“Many of the financial difficulties we see people getting into stem from poor financial literacy,” shares Autumn’s CEO, Mike Kruger. “The Autumn Academy will make a foundational financial education accessible to all, including topics such as understanding your relationship to money, how to recognise a good financial plan, how to manage your finances, and how to turn your financial plans into reality.”
Starting young pays off
So, where do we go from here? If you’re a parent, start having frank discussions about money at home, and get your child comfortable with the subject early. You can do so by teaching them essential personal finances, like how budgeting works or the importance of savings.
As they get older, take it a step further and introduce them into the world of investments and the many apps that help educate and gamify the matter.
It’s also vital that financial tools recognise this gap in financial literacy and aim to bridge that through simple and easy-to-use features.
Financial tools need to be simple, accessible and arm users with the know-how to make informed money decisions. It’s precisely this philosophy that governs what we do at Autumn.
All in all, financial literacy is a life skill, and starting it young pays off. With the wealth of options out there, it’s essential to be prudent and sift out the noise. Early financial literacy teaches kids to have a good relationship with money – a valuable lifelong skill that pays off.
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This article was originally published on e27.