PETALING JAYA: Financial literacy is vital for young people to better manage their financial resources, say experts. 

Associated Chinese Chamber of Commerce and Industry Malaysia socio-economic research centre executive director Lee Heng Guie (pic) said: “Financial literacy allows individuals to better understand and maximise their financial resources.

“They must be equipped with the knowledge and skills that are needed to manage money effectively.

“Without proper planning of your financials in terms of commitment and how you use your money, your personal finances will eventually be impacted, ” he said when contacted yesterday.

“It is important that financial literacy is taught from young, when they are still in school, ” Lee said, adding that it was crucial to give young people a better understanding of the responsibility of managing their finances.

To impart greater awareness on the subject, the Malaysian Financial Planning Council (MFPC) will be organising a virtual financial literacy programme in an effort to help youths acquire basic knowledge on financial management.

MFPC said the four-hour “My Money and Me” programme would help youths make better decisions, noting that data had indicated that Malaysian youths generally lack successful money management knowledge.

MFPC pointed out that there were 13.9 million youths in the country, representing 45.8% of the population.

MFPC president Vincent Kwo said many of them rarely practised basic things such as budgeting or developing a regular savings plan, leaving them vulnerable to financial anxieties or emergencies.

“In the national commissioned study on Financial Capability 2020, the findings of which were recently published, financial unpreparedness of youths was once again made evident.

“Youths have heightened curiosity and should be advocated with having a mindset to be

successful in investing, ” he said in a statement yesterday.

MFPC noted that the money management ability of youths would be an important factor in uplifting their quality of life.

The collaborators for the programme endorsed by the Youth and Sports Ministry include the Securities Commission Malaysia, CGS-CIMB, Federation of Investment Managers Malaysia, Inland Revenue Board, Counselling and Credit Management Agency and Bursa Malaysia Islamic.

Meanwhile, Financial Planning Association of Malaysia Financial Literacy Year 2020 organising chairman Nicholas Chu Chee Khiang opined that young people today do not have financial literacy due to their background and the country’s macro-economic situation.

“When they are growing up, especially in middle-class families, their parents support them wherever needed. Their parents help them make decisions and solve their money management problems. Because of this, they lack training on how to manage money, ” he said.

“Apart from this, there is the issue of the country’s economic structure, which is unbalanced, whereby capital growth is much faster than salary growth.

“This has become a challenge for today’s youth in terms of their financial management, ” Chu added.

Source: https://www.thestar.com.my/news/nation/2020/08/22/experts-youth-should-have-financial-literacy