Financial Knowledge pays dividens to society

Knowing how to handle money is an essential skill for young people, and there are plenty of opportunities for banks to teach it through workshops delivered by employee volunteers, writes Mary Huen

IN one of the community activities on teaching teens about personal finance held recently, a group of teenagers were asked what their dreams and ambitions were. I was struck by a particular group who said that the first thing they would do after turning 18 would be to apply for government public housing.

Housing in Hong Kong is a necessity as well as scarce. True, a lot of us living in this city are overwhelmed by the need to find a place to live, and public housing is meant to provide a safety net for those with genuine needs. But when a group of budding teenagers see the safety net as a quick fix, they may at the same time be putting the brakes on their potential.

This begs the question – how much do these teenagers know about planning for their future? What can banks do to help?

Banks’ social responsibility
FINANCIAL institutions are becoming more and more aware of their social responsibility to contribute to the long-term and sustainable growth of communities they have footprints in. Helping communities build their financial capability is one area in which the industry can directly contribute. Ideally, citizens should know their rights, including those in finance and banking services, and have the skills and confidence to exercise those rights. But in reality, external research and banks’ own experience have demonstrated that the lack of financial education is limiting economic opportunities for individuals across markets. Without adequate financial education, not only are people less likely to make good use of financial tools that could assist them, but they can also be more vulnerable to predatory banking which, unfortunately, does exist.

The earlier in life a person receives financial education, the more effective it is, as a large part of financial education is about taking time to instil the right mindset. In 2013, Standard Chartered kick-started a tailor-made financial education programme for the youths of Hong Kong. In developed economies such as Hong Kong, young people’s ability to manage their personal finances sensibly and effectively needs to be boosted so that they can navigate through the material world.

Financial workshops
SOMETIMES, it is not complicated financial analysis that helps the most. Something as fundamental as distinguishing between one’s ‘needs’ – which are the essentials – and one’s ‘wants’ – which are nice things we want to have – can help teenagers navigate through the material world.

In the workshops, students list their ‘needs’ ranging from the tangible, such as a flat to live in, to the intangible, such as friendship; and their ‘wants’, from the latest smartphone to entrance qualifications for a local basketball competition. Through fictional scenarios, students engage in discussions to sift through needs and wants, and propose cost-saving alternatives.

Combining financial literacy with career guidance, such training not only equips youths with the skills to manage their money, but also plants the seeds among them so that when they grow up they will become financially responsible citizens. For teenagers who may regard government housing as the only way out, career guidance also helps them see the bigger picture of forging a solid foundation for wealth creation and not restricting oneself to a certain income ceiling, thereby saving government welfare for people with real needs.

Not for profit
HAVING the programme delivered by employee volunteers is also a very meaningful way for a company to engage its employees as they are able to contribute directly to the community’s sustainable development using their expertise.

In helping society groom the next generation of financially responsible citizens, banks are inputting their economic resources and turning them into sustainable social values for the long term. Delivering financial education not only benefits the students; it also creates a lot of value for the bank and society as a whole. At a time when maintaining financial stability is high on every market’s agenda, taking a bottom-up approach to educate the public from early on may be one way to achieve that goal.

Workshop highlights
The workshop includes a seminar, group discussions, case studies and video presentation covering two key areas:

Basic financial knowledge
• Identify your needs and wants – what are the necessities and what are the “nice-to-haves”?
• Responsible borrowing – what are the channels available and how to make good use of the tools? (eg, government grants and loans for tertiary education)
• Good credit card habits – how should one handle their credit card bills?

‘Planning for the future’ career sharing
In every session, an experienced banker conducts a career sharing session to help students plan for their future at a time when they are starting to think about courses to choose when they go to university, or their future career paths.

Students’ comments
"Knowing how to handle money is an essential skill for young people, and there are plenty of opportunities for banks to teach it through workshops delivered by employee volunteers, writes Mary Huen The workshop was informative, relaxing and delightful and it let me understand more about different borrowing options as well as the pros and cons of credit cards. The sharing session from the volunteers was very inspiring – not only did it deepen my interest in the banking industry, it also made me look forward to my future career!" - Xiao Mei-hui, (F4), Maryknoll Fathers’ School

"Through different activities and lectures, the Financial Education Workshop showed the significance of savings and the planning of everyday expenditures. The interactive games as well as the relevant statistics and real life examples quoted in the workshop helped us better understand the wisdom of money management. I will definitely break my bad spending habits and start saving." - Chung Kui-ting, (F5), Kwai Chung Methodist College