May 11, 2015

Why Don't Students Care About Personal Finance (feat Cheerful Egg and Ke'ichi Wealth Management)

Source: Night Owl Cinematics

 The blog post "Why Don't People Care About Personal Finance" by Cheerful Egg  sparked off a flurry of discussion among financial online world with me contributing another article  and Ken'ichi Wealth Management  sharing on his own experiences why people don't care about finance. Kenji mentioned that in his blog post that one of the primary problem is that financial education is not thought in school and he proposed that educators should work on more visual aids like Youtube videos to encourage people to learn more about money. I heartily agree on the use of Youtube videos to engage the general public like what some of the top Youtubers like N.O.C, Jianhao Tan, Wah Bananas and Tree Potatoes.All these famous Youtube channels have one similar point... Very pretty Babes in their videos.

Pretty babes are in a critical shortage in the entire financial education scene... Maybe we can ask the only female (and pretty) female financial blogger, Budget Babe to help star in our video. Haha. Wait, no, she will smack me on my head, so scratch that idea.

Back to the problem with financial education in school, I am in an unique position to share some insights, thanks to Wongamania. Although Wongamania is designed for the adults' market, I have quite a few interested parties from schools and financial educators who approached us to make use of Wongamania in schools.

In fact, there are no shortage of financial educators who work in the schools' market. Eduwealth, Moneytree, Innervative and PlayMoolah are some of the active providers who have very innovative products to engage the youths of today.

However, they all seem to face a similar problem... Lack of interest and follow through.

The reason "Why Don't Students Care About Personal Finance" is again the problem of priorities and attitude and I see that problem to be particularly acute with Singaporean Students.

Let me break down by demographics again to give you a better insights on the problem.

Pre - Tertiary (Age 6-16)

Parent, "Hey son. What did you learn in school?"

Son, "I attended a once a year workshop about personal finance. We played games and such and learn about savings and investing."

Parent, "Great! Now you know how difficult it is for Papa to earn money. You must help Papa save money okie?"

Son, "They talk about this thing call investing in shares in school. I don't quite understand! Can you tell me more!"

Parent, "Ehh. You will understand when you grow up. Learning about money is not important now and you better focus more on your studies/ Maths/ English/ Biology so that you can find a good job and you won't have to worry about money!"  

So why did financial education fails at the pre-tertiary stage? Because financial education is always the least priority when compared to the barrage of enrichment classes out there. Many parents feel that children be spending more time tackling on the important issues at hand, like acing their PSLE and O-Levels and getting into the next elite school. In fact, ballet and music lessons probably rank ahead of financial education when it comes to the proportion of the money spent by parents on enrichment classes. The one reason why I can think why music lessons rank ahead of financial education is not because the parents think that the children will become a successful musician, but rather, these enrichment classes yield immediate results.

Take these scenario for example:

"Ah girl. Come play the Beethoven Symphony No. 5 for Aunt Jane."

"Wah. Your Ah girl so talented! Next time will be a famous musician!"

Parent beams with Pride


"Ah girl. Come explain to your Aunt Jane the theory of Economic Reflexivity by George Soros."

"Whaaat? What Soros? Who is that? Never heard of him? Why you make your daughter study all these difficult stuff? Got use one meh? She so poor thing. Kids mah, let them play lar! She now so nerdy, next time how to find a rich husband!

Parents Shamed by relatives and friends  

Financial education and the associated financial enrichment classes will never take off for our children, unless parents change their priorities and their allocation of budget towards the skills, that will really benefit their kids for life, rather than pursuits which will yield them a good degree or creative skills which are used as a competitive sport among parents.  


Tertiary (Age 17 - 24)

The Tertiary financial education market is a very interesting one. In the last post, I mentioned that students in the tertiary institutions priorities are as follows:

1) Grades
2) Girl/Boy friends
3) Fun

One interesting phenomena I observe is the students' perception of financial education as a tool to get a high paying job in the banking and finance industry, rather as a way to improve your personal finance knowledge.

There are two kinds of students in general:

The ones who wants to be an investment banker/analyst/fund manager/private banker>

They are often found in the elite business schools in Singapore and they love to sprout complicated valuation models and quote from Warren Buffet whenever they can. They also attend every virtual trading competition that they can find so that they can impress the bank executives with their knowledge and trading skills. Most of them jump straight to the complicated stuff without caring about the basic financial knowledge, such as savings, debt management and budgeting. After all, they are going for a high powered job whose role is to manage millions of dollars. Learning about budgeting are for those scums who want to be financial planners and these people only know how to cheat people using expensive insurance products (says the aspiring private banker...)!

The rest of the varsity students

Financial stuff? Are you trying to sell me insurance!?! Go away!! I have no money!!

When I got some of young adults from universities whom helped me develop Wongamania to approach their friends for play testing, many of them declined to play because it is a "financial" game. However, when they are approached from a different angle ( A fun card game like Monopoly Deal!), the response are often more positive. It seems like there is a stigma on financial stuff in our tertiary students and it is extremely difficult to get them to be interested to learn about money stuff when many students avoid the topic like a plague.

However, there is no such stigma in the universities I work with in Malaysia and many young adults embrace the learning of financial literacy. Perhaps it is the perception that they have less job opportunities and with the problems of GST and high inflation in Malaysia, they are keen to learn how to make their first paycheck go further.

With record low unemployment and rising fresh graduate pay in Singapore, Singaporean students are perhaps too comfortable and too naivete to think that the good times will continue to roll.

I even have Singaporean undergraduates coming forward to tell me that "Singapore property will never crash."

I fear our our Generation Z

Back to the financial educators effort to engage the youth, perhaps it is time to move out from just pen and paper (digital ink in this case) and start making videos


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