PARENTS, who are the primary educators to children, should impart some financial knowledge into their little ones given that financial education aren’t being taught in schools.
Prudential Assurance Malaysia Berhad (PAMB) chief brand officer Fiona Liao believes there is no best age for children to start learning about financial management.
Noting that there is a lack of financial literacy among Malaysians, Liao said said there is a pressing need for more education to build responsible money management skills in the younger generation.
“About 25,000 Malaysians below the age of 35 have become bankrupt over the past five years, while 37% of young Malaysians are living beyond their means and 47% use more than one third of their monthly income to settle debts.
“These statistics show that managing money can be challenging for many adults and an even more difficult task is teaching children good money management skills, and to practise delayed gratification,” she said.
Youths today live in a world of instant gratification with a danger of falling into debt if they don’t have a plan to manage their money wisely, she added.
“Parents and educators should expose young children to money skills as early as they can, and it should be taught progressively as they grow up.
“Regardless of teaching, modeling by parents is also critical. Parents should set a positive example and act as a role model, without lecturing, and use their mistakes to illustrate lessons so that they could inculcate the habits that will influence wise financial decisions during their process of growing up,” she said noting that Prudential’s school-based financial education programmes - Cha Ching and Duit Right which are endoresed by the Education Ministry - teaches money management life skills.
“We want to instil positive financial values in fun and inspiring ways through four key pillars of financial management - earn, save, spend and donate.
“This teaches young children and youths on how to make financial decisions, while learning how powerful their own hard work can bear results,” she said.
Parents should never over-indulge children with material items, she added.
Allianz Malaysia’s Ng Siew Gek who heads Allianz4Good, Allianz’s corporate social responsibility arm, shared Liao’s sentiment, pointing out that early exposure on financial education enables young children to absorb knowledge passed on by their parents.
“They are at a stage where they can still be influenced to develop good financial management habits that will stick with them throughout their teenage years and adulthood,” said Ng.
She said improving financial literacy levels among children will not only enable them to handle their financial responsibilities well in the future, but will also help prevent them from falling into debt or filing for bankruptcy at a young age.
“This will indirectly help in strengthening the country’s economic stability,” she noted.
She said before teaching children how to be wise when managing money, parents themselves must have an adequate amount of financial management knowledge and act as role models prior to educating their children.
“Alternatively, parents may seek external sources or experts to build financial literacy knowledge among their children,” she said, adding that Allianz’s My Finance Coach (MFC) programme is useful for that.
The MFC programme breaks down key financial literacy topics into a few categories starting from the basics like “needs and wants”, “why and how to save” to help children understand and relate to financial matters in a simple way.
Ng added that school teachers should receive adequate training on financial literacy topics so they too can impart the knowledge to students.