The country’s future depends on making every individual, young and old, fully realise the obligations and responsibilities belonging to citizenship. Every individual’s future mostly depends on their decisions, and good financial literacy helps people prepare for life.
Habits of life are formed in youth. It is, therefore, critically important that all societal stakeholders promote proper financial education and training in the useful things of life.
The launching of a pocket money app developed by university student Daniel Attard could prove to be very useful in helping young people master the skills of good personal financial management.
For his work, Attard won a competition held by ĠEMMA, the state entity tasked with promoting financial literacy in the country. ĠEMMA deserves praise for the cause that it pursues, and Attard for the tool he has created for our youngsters.
His app encourages children to save and work towards setting financial goals. It also allows parents to create tasks for their children to complete and earn a financial reward by doing so.
The ability to read and write was once the only indispensable skill for the economic advancement of individuals in an industrialised society. In today’s post-industrial era, financial literacy has become just one among a number of essential tools for anyone who wants to succeed.
Poor financial decision-making and weak consumer protection in consumer financial markets need to be addressed with more determination as they serve as an antidote to the limitations of individual financial capabilities.
The changing economic climate, in which individuals are expected to shoulder greater personal financial responsibility in the face of increasingly complicated financial products, creates a sense of urgency for upgrading the population’s financial literacy level.
The rock base of any financial literacy strategy must include the ability to prepare a household budget, save for retirement, build an emergency fund for a rainy day, understand the different investment options with their associated risk profiles, and know how to obtain credit for consumer spending or to buy a home. It should also include understanding the importance of various insurance products to manage risks.
Financial illiteracy can lead to several risks, including being more likely to accumulate unsustainable debt burdens due to poor spending decisions.
Financial skills can help individuals prepare short-term financial strategies and long-term objectives. It also helps people understand their risk tolerance based on their circumstances.
While up to some years ago, financial literacy could be mastered by reading books written by experts in a language that most people could understand. Today, IT tools, now assisted by artificial intelligence, are perhaps more user-friendly. Some banks also provide online applications to help their customers understand the essential elements of various financial products. All local banks must emulate this growing practice as part of their corporate social responsibility commitment.
Making life-changing decisions without sufficient information could lead to devastating mistakes. This is why everyone must be armed with the appropriate knowledge about finances. Financial risks can never be eliminated completely from most people’s lives. But a good grounding in financial literacy will help many to feel more confident, realising they are less likely to be surprised or negatively impacted by unforeseen outcomes.
Investing in oneself is the best investment, and it is not taxable. Developing financial literacy to improve the management of personal finances is a continuous learning process that enables individuals to hone various skills and build economic resilience.
It is never too late to start practising good financial habits. But harnessing the education system to start people young is even better.