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This article was not reviewed by Monetary Authority of Singapore (MAS) or any other relevant authorities.
If you are in your 20s and working full-time, you probably did not experience any proper financial literacy lesson in your 10 years of compulsory education in Singapore.
This means that you may only have a limited amount of knowledge in financial literacy and THAT is quite a worrying issue! Are you spending and allocating your money in the way that you want?
Our Singapore Government has already noticed this issue (albeit only recently) and made it mandatory for students to go through several financial literacy modules!
What is financial literacy?
Financial literacy means being able to “make informed judgements and take effective decisions in managing their finances”. This would mean that you are equipped with the knowledge in things such as budgeting, spending, savings, investments etc.
Well, you might already have some knowledge on these things, since you have already started receiving a sum of money every month. But, are they enough? Are they adequate? Are they efficient?
If they are not, the financial consequences (that could have been avoided) could be really heavy!
1. The possibility of working till you are old and frail
Simply put, if you don’t plan your finances early, such as your expenses or saving for your retirement, you might have to keep working to feed yourself.
Do you know how much you need to retire? Do you know how much you need to budget your finances so as to ensure you retire at your desired age?
If you were having difficulties answering those questions above, it might be a good idea to start reading up or engage with financial advisers to guide you through!
Yes, some of you might also be thinking: “Never mind la, my children will feed me what.”
That’s true, but it is something that can only be known later. No one knows what the future holds. So, wouldn’t it be better that we ensure we take good care of ourselves first by planning early?
2. Earning lesser than you could have
While Singapore recently introduced mandatory financial literacy lessons, it has certainly introduced the concept of compounding in our primary and secondary school education.
Platforms such as your Central Provident Fund (CPF) and investments are where you could put a portion of your money in for it to grow. When it grows = you earn more money. So, the earlier you start, the better it is.
Work smart, not hard right?
So, if you are not well-versed in the world of investing, you could already be losing out!
3. The possibility of you NOT attaining your desired milestones at the desired time
You might want a house at 28 years old. You might want to get married at the age 26. You might want to start a family at 30 years old. But, do you know how much you need to reach those goals?
Concepts such as budgeting and saving are important to help us attain our life goals at our desired age. Hence, if we are not competent in these concepts, or rather, financial literacy, we might have to make compromises or even do loans.
In some cases, some might even loan an amount outside of their means and end up in debt and we certainly do not want that!
In summary…
Now, knowing these consequences, it would be a good idea to start reading up and improving your financial literacy so as to avoid them. Fill up this form if you’re still unsure where to start as this will lead you to engage with financial advisers to guide you through.
