Thursday, September 19, 2013

The corrupted ones want to teach financial literacy programme in schools

Money management in Malaysian classrooms?

September 19, 2013
The plan was devised to 'prepare pupils to take their place in society as responsible citizens by providing them with the skills and knowledge to manage their money well and make sound financial decisions.'
FEATURE
In early 2013, the United Kingdom unveiled plans to include financial management into Mathematics and Citizenship curriculums. The syllabus targeting children between the ages of 11 to 14 would focus on everything money from the payment and usage of taxes to personal finance habits and debt management.
The plan was devised to “prepare pupils to take their place in society as responsible citizens by providing them with the skills and knowledge to manage their money well and make sound financial decisions”. The mathematic syllabus will include basic financial calculations such as interest charges.
Not long later, a similar announcement was made by the education ministry in Singapore. Citing rising household debt, the ministry was keen to begin educating young Singaporeans from the get-go about debt and managing money.
And now, the initiative has caught on here.
Details aren’t forthcoming as yet on what the syllabus will look like or how much personal finance it will encompass, but any money management education will be welcome. In a seminar on financial literacy and retirement savings, Bank Negara Consumer and Market Conduct Department Director Suhaimi Ali, spoke of the upcoming collaboration with the Education Ministry to include a financial literacy programme in the education curriculum.
“There must also be greater access to information on financial management through interactive programmes and mobile applications, coupled with a network to drive financial education initiatives at the national level.
The initiatives should be fine-tuned to target parents, too, as they play a crucial role in advocating financial literacy to their children.
Financial institutions offering loans must also be responsible and not introduce promotions that would risk increasing recipients’ debt levels.” He said.
It would definitely be interesting to see what the committee comes up with to form the syllabus. Nonetheless, any kind of money management skills will be beneficial in the larger scheme of things.
These are just some of the basic personal finance lessons that would do well to be included as a life skills component.
1. Basic budgeting. For many urban children, being given pocket money has become a norm. Though the amount given will vary based on the household income level; the lesson should always be about living within your means – whatever those means are. In adulthood too, there will always be different income levels but where possible, the importance of budgeting and saving ought to be stressed.
2. Debt. Borrowing money may be an unavoidable part of life especially to purchase homes and cars but it would be helpful from early on that children be made aware that you must always pay back borrowed money and note that if you’re borrowing from institutions; you’ll be paying for it in the form of interest or fees.
3. The importance and approaches to saving. Besides properly budgeting, helping children learn to put aside money for a rainy day will be undeniably useful. Many children grow up with the idea that there is somewhere in their parent’s room either an infinite money tree for all their needs or that they are destitute and therefore shouldn’t bother with things like saving. Such lessons only serve to create unhealthy attitudes about money in the future and an inability to save. In times of real crisis, any sum saved will provide respite even if not complete relief.
These are by no means exhaustive and if the curriculum was to encompass different banking products and calculation of interest rates like the syllabus the United Kingdom; it would be doubly useful.
For many in Asia, talking about money management skills is still somewhat taboo. But what may appear as ‘meddling’ or attempts to control other people’s spending is nothing more than sharing tried and true methods of living a full life within a finite income and keeping the debt collectors at bay. The sooner everyone, including our children, are educated on personal finance the better, not just for individual families but for the economy of the country.
This article brought to you by Diana Chai of RinggitPlus.com. We believe all Malaysians should have access to free, accurate and independent personal finance information.
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Bank Negara and the Education Ministry are already teaching the Rakyat how to scam so why extend their ways to the youngsters.

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