Financial literacy is the capacity to comprehend and efficiently handle money.
It covers a wide range of financial principles, including budgeting, saving, investing, and debt management. Sadly, financial literacy remains a serious issue in the Philippines.
Many Filipinos lack the information and skills necessary to make sound financial decisions, resulting in financial instability and vulnerabilities. This limits their capacity to learn about financial goods and services which makes it harder for them to save, invest, or acquire credit.
The lack of financial education in the Philippines could be for the following reasons:
- There isn’t yet a comprehensive financial education program or a required subject in the school curriculum today.
- Poverty and low-income levels, for example, make it harder for people to prioritize and buy financial goods and services. The recurrence of investment misrepresentation and fraud happens often victimizing vulnerable groups in favor to get-rich-quick schemes despite the government efforts and advisories.
- The media and marketing messages that favor quick pleasure and consumption above saving and investing.
- The low level of financial literacy is also influenced by cultural factors from family, and friends, and frequently turn to them for financial guidance. However, they themselves are not equipped enough to give sound financial advice and this could result in a loss of independence in financial decision-making as well as a lack of confidence in financial institutions.
- The role of informal financial systems, such as pawnshops and loan sharks online that you can get cash in just few taps, that do not promote financial literacy or responsible financial behavior.
- People’s inclination to rely on financial goods and services they may not completely comprehend, which might lead to financial troubles later on. A lack of awareness of the risks and rewards of various financial goods and services.
The best thing we can do to improve our financial literacy as individuals is to take matters into our own hands by doing research, learning, and understanding the basics of money.
We’re starting a series on everything related to finance that would be simple to understand, get started with, and most importantly, to promote financial literacy. It can help you be equipped to make wise financial decisions, knowledge of various sorts of investments, and create a more secure financial future.