KUALA LUMPUR – Educationists have called on the government to integrate financial literacy into the education system as youths and young adults increasingly face the risk of economic instability and bankruptcy.
They said decisive action must be taken on the matter as financial challenges grow increasingly complex in the modern world, adding that the importance of financial literacy has become more evident than ever.
Parent Action Group for Education Malaysia (PAGE) chairman Datin Noor Azimah Abd Rahim said integrating financial literacy into the educational curriculum is imperative for preparing students for future financial responsibilities.
“Financial literacy is extremely crucial in today’s education curriculum. Many may not realise the impact of being bankrupt until it is too late,” Azimah said.
“With the current educational curriculum, the number of bankruptcies has risen tremendously among young adults. At the elementary level, students must first learn the basic arithmetics of addition and subtraction.
“And as they progress, the focus should shift to understanding the importance of not spending more than they earn and learning how to budget to live within their means.
“The key is that one must be able to add and subtract. Then it is about not spending more than he earns and learning how to budget to live within one’s means.”
Azimah suggested practical steps educators can take to integrate financial lessons into existing subjects.
“Set a revenue stream then list the expected expenses for the month. If there is a deficit then either prioritise expenditure or find a supplementary source of revenue to overcome the shortfall. Discipline is paramount,” she added.
She noted that this hands-on approach not only teaches them about budgeting but also instils discipline and prioritisation skills.
Azimah added that a significant challenge in delivering financial literacy is poor performance in foundational subjects such as mathematics.
She added that 90,000 students performed poorly in mathematics for the latest SPM examinations, indicating a rudimentary problem in the education system.
“With 52% of students performing poorly in SPM, it is a strong indication that the fundamentals are not being caught early.” Azimah said.
According to the Insolvency Department statistics last year, a total of 31,140 individuals aged 35 and below have been registered as bankrupt from 2014 to May 2023.
She said the long-term goals of financial literacy education should be to foster a generation of young adults who are financially savvy and capable of making informed decisions.
Azimah said she envisions a future where young people are building successful businesses, overcoming the middle-income trap, saving diligently and investing wisely.
The effectiveness of these goals can be gauged by a reduction in bankruptcy rates and an increase in personal investment portfolios, she said.
Different methods for different levels
National Union of the Teaching Profession secretary-general Fouzi Singon highlighted the critical role of financial literacy in Malaysia’s educational curriculum.
According to Fouzi, financial literacy equips students with essential knowledge and skills to manage personal finances effectively.
“This includes understanding budgeting, saving, investing, and credit management.
“Integrating financial literacy within the TVET (technical and vocational education and training) education is essential for developing independent, financially responsible adults who can contribute to Malaysia’s economic stability,” Fouzi said
He added that key financial concepts and skills should be taught at different educational levels.
“In elementary school, students should learn basic concepts such as saving, spending, and the value of money.
“Middle school students should be introduced to more complex concepts such as budgeting, understanding needs versus wants, basic banking, and an introduction to interest and loans.
“High school students should tackle advanced topics such as personal finance planning, credit and credit scores, investments, taxes, insurance, and the implications of debt.”
Addressing the current challenges in delivering financial literacy education, Fouzi noted the lack of a standardised curriculum, insufficient teacher training, and limited classroom time.
At the policy level, financial literacy should be mandated as part of the core curriculum, with clear standards and learning outcomes, he noted.
Fouzi said at the implementation level, professional development for teachers should be provided, financial literacy should be integrated across subjects, and technology and interactive tools should be used to enhance the effectiveness of financial education.
For students struggling with basic mathematical concepts, Fouzi suggested using concrete examples and hands-on activities to illustrate financial concepts.
“Simplifying complex ideas into manageable steps and using visual aids, such as charts and graphs, can also help.
“Providing additional support through tutoring, peer mentoring, and using financial literacy software that adapts to the student’s skill level can make learning more accessible.”
He said integrating these lessons into TVET and STEM contexts can help students see the relevance of maths in real-world scenarios.
Lack of depth in lessons
Sibyl Su, a retired English teacher from SMK Sultan Abdul Samad, also advocates for integrating financial literacy into the school curriculum.
“Without the basics, it will lead to a generation that spends what they don’t have and is saddled with debt. We need to teach them how to live within our means.”
Su said financial literacy can be seamlessly integrated into existing subjects without overwhelming the current curriculum.
She pointed out that financial literacy is already present in the education system, both curriculum and extracurricular activities. The issue, she said, is the lack of emphasis.
Financial topics are included in the Kemahiran Hidup syllabus and across various subjects, especially Perdagangan (Commerce).
“Even in English classes, you have themes on finance where you plan out projects and do budgeting,” she said.
Besides that, extracurricular activities, such as Entrepreneurs Day or Canteen Day, require students to plan sales projects and calculate projected earnings, with each proposal needing a budget.
Despite these opportunities, Su notes that time constraints often prevent these lessons from being explored in depth.
On key financial concepts and tools, Su highlighted the importance of teaching the benefits of saving.
She advocates for educating students to save from the moment they receive money rather than saving what remains at the end of the month.
Additionally, she stressed the necessity of learning how to calculate and file taxes, which are essential life skills and understanding that “money doesn’t grow on trees”.
Recognising scams that sound too good to be true, thereby preventing people from becoming victims of cybercrime.
“That will stop people from falling prey to schemes that wipe out savings.”
Su also shared practical activities and projects that can help students grasp budgeting and money management, adding that class projects are a fun and effective way to learn.
“For example, planning a class trip where you have to work out budgets on accommodation, transport and food. (These activities) help get their heads out of the clouds.
“Charity projects to raise funds are classic ways to impart financial skills, teaching students that not everything can or should come from their parents, she said.
She said teaching financial literacy has a profound impact on students’ future financial decisions and responsibilities.
“It will teach the sensible skills and help them stay safe and debt-free.”
Addressing the challenge of students who struggle with basic mathematics, she said that while many mathematical concepts learned in school may never be used in life, financial skills are essential and will be used throughout one’s life.
“In maths you learn things you will never use in life. But these financial skills will be used throughout your life. That in itself is the motivation.”
This practical relevance, she believes, motivates students to engage with financial education. – July 20, 2024