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Financial literacy must be a life-long agenda


In the past, the older generation depended on cash and even barter for their daily purchases or securing what they needed. With the advent of technology and modernization, money is now rarely flashed, especially in the urban areas and especially by younger shoppers.

The way we shop has changed as well. Cashless shopping is now the preferred choice of spending and is also viewed as a status symbol. Consequently, this advent has also created ample opportunities to abuse and extend credit, the fastest way to fall into debt trap and find one’s self, neck deep in financial troubles.

Given this syndrome, it is important more than ever before to make education about personal finance and financial management a life-long activity.

This is because, in our ever modernizing society where various cash less form of transactions are coming into play, in what is basically an increasing cashless society, it’s easy to spend without realizing how much one is spending or has spent until it is time to pay the bill.

Whether it is Maybank’s Cashville kidz, One Passbook for One person, CamGSM Co Ltd’s Cellcard “3-2-1 Service or simply programmes and initiatives like your money matters, all of these programmes and more, helps students learn healthy financial habits and make informed decisions about their money, a key element of education which in Cambodia is still lacking and which needs to be stepped up.’

The rising concern about young adults starting out in life with debts, is strong indication of a great need for good financial literacy programs to educate the younger generation on matters pertaining to personal finance. This is evident as a global comparison of financial literacy that was conducted by the World Bank across 150,000 people in 140 countries found that only 1 in 3 adults can be considered financially literate. Malaysia (36%) scored slightly above the global average pass rate of 33%. That is higher than Indonesia (32%), Thailand (27%), Philippines (25%), Vietnam (24%) and Cambodia (18%), but lower than Taiwan (37%), Hong Kong (43%) and Singapore (59%).

Thus, the financial habits the young learn early in life carries through to their adult years and personal financial knowledge and decisions are key factors in the household debt figures countries across the world are seeing today.

An extract from “Dollars and Sense” says: “Today, the personal finance space is changing faster than ever. Technology has made new product categories possible and that government policies must also be constantly revised and introduced to be better equip Cambodians to understand the ever-increasing financial decisions they must make.

In the world of finance, as with everything else in life, prevention is better than the cure, as the adage goes. If policy makers can enable the youth, rural masses and the head of households, the women, understand fundamental concepts like debt trap, dangers of borrowings and inability to pay, interest, and risk, then the masses will be better equipped to make informed decisions to avoid the dangers lead to financial problems, as well as the vicious cycle that follows.

Simply put, money is the root or all evils and without it, it is the root cause of all problems.

Thus, if the masses do not have the basic knowledge or skills to manage their finances, they could probably still end up in a difficult financial mess. And once we’re in financial distress, things become much harder for us.

One of the key elements to financial literacy is the ability or rather, to develop the ability amongst the masses to understand that money is not an indefinite resource and that, if not properly managed, would run out. The key to ensuring that money does not run out or remains in check is the knack for budgeting one’s finances and this can only come about through education and awareness campaigns, lots of it, at all levels, across all segments of society and without discrimination.

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