It pays to understand finance2014.12.02
Financial capability 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
AT one of the community activities on teaching teens about personal finance held recently, a group of teenagers were asked what their dreams were. A particular group said in a matter-of-fact way that the first thing they would do after turning 18 was to apply for government public housing.
Housing here is a necessity as well as a scarcity. A lot of us 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 be putting a brake on their potential. How much do these teenagers know about planning for their future?
Banks’ social responsibility
IDEALLY, citizens should know their finance and banking rights, and have the skills and confidence to exercise them. But external research and banks’ own experience have demonstrated that a lack of financial education is limiting economic opportunities.
The earlier in life a person receives financial education, the more effective it is. In 2013, Standard Chartered kick-started a financial education programme for youths. In developed economies, young people’s ability to manage their personal finance sensibly and effectively needs to be boosted.
SOMETHING as fundamental as distinguishing between one’s ‘needs’ – which are the essentials – and one’s ‘wants’ – which are something nice to have – can help teenagers navigate 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 qualification for a local basketball competition. Students engage in discussions to sift through needs and wants, and propose costsaving alternatives.
Combining financial literacy with career guidance, such training does not only equip 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 directly contribute 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. At a time when maintaining financial stability is high on every market’s agenda, taking a bottom-up approach to educate the public early on may be one way to achieve the goal.
The workshop includes a seminar, group discussions, case studies and video presentation covering two key areas:
• 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 do I 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 they start thinking about courses to choose when they go to university, or their future career paths.