In a nutshell, Sijil Pelajaran Malaysia (SPM) is the Malaysian education system's equivalent to O-levels. It’s the final obstacle that a high-school student must overcome before they choose what field to further their studies in, where they’d want to continue their studies, and in short, what they want to be when they enter the much dreaded workforce where mom and dad will no longer support them - financially.
The exam consist of five compulsory subjects (languages, maths, science, religion and morals) which are deemed as fundamental to develop a well-rounded and productive citizen. But what is a productive citizen? How would a young adult know how to manage their finances to effectively contribute to the society and pay their dues without first learning about it?
With so many millennials struggling with debts and financial commitments, shouldn’t we teach financial literacy to our future generation from a young age, and make it a part of SPM to fortify its importance to them?
What is Financial Literacy?
No, it's not knowing how to read the serial numbers on your banknotes to tell someone's fortune. Financial literacy is the ability to understand how money works in the world. More specifically, it refers to the set of skills and knowledge that allows someone to make informed and effective decisions with their financial resources.
Considering the cases of money mismanagement happening amongst Malaysian youth today; could a syllabus on the topic have helped them prepare a little better?
We think it just may have and here are three reasons why.
Everybody Deals With Money
Even if you're on this site by mistake, or you feel like there are people who think way too much about money, it cannot be denied that money affects us in many ways. Spending, investing, donating, and saving money are things we all do daily even though not all of us are aware of the little mechanics that are involved in them.
It's typical for us to suddenly be bombarded by plenty of insurance options, credit card offers, and loans just as we enter the working world. Wouldn't it be best if we are gently introduced bit by bit to all of these different concepts and financial instruments earlier on in life? Not only will this make us better at managing our money and making financial decisions, it also helps us avoid getting duped by complicated financial scams.
On a wider level, it's also important to understand how our country handles her money, how other countries deal with theirs, and why economies fall or rise. At the very least, it helps us understand the news better.
The argument that “you need to get good grades so you can get a good job” is also given more depth if we introduce financial literacy as a core subject. Students can determine what makes a good job in the future, what kind of industries contribute best to the economy, and consequently where to direct their interests and skills to choose an optimal career for themselves.
Financial Illiteracy Is a Real Problem
A recent study by the Asian Institute of Finance shows that Malaysia's youth is ill-equipped to deal with the increasingly complex and varied financial services and products that they themselves are already using.
Combine this with how well the local economy is projected to be doing in the coming decades ahead and you get a recipe for monetary disaster down the road. Early education in financial literacy can help mitigate this problem and prepare future Malaysians with the know-how they need to manage their resources wisely.
This isn't a problem endemic to Malaysians, by the way. Countries like Canada, Japan, Singapore, Australia, and the United Kingdom are all aware of the lack of financial literacy in their populace. They've all developed government bodies, foundations and agencies in efforts to ameliorate the situation. These efforts include initiatives to add financial literacy into the school curriculum, just like we're proposing.
It Makes Us Better People
Part of why our education system makes it compulsory to study religion and morals has to do with the particularities of being Malaysian. In a country where people of all kinds of different religions, race, and customs mix around every day, it's important to know how best to treat one another. While religious and moral studies help us become close to each other regardless of race or religion, one subtle way that people might see each other very differently is socioeconomically.
Being more financially literate means understanding that money is a resource that anybody can obtain and lose. It also means having the tools to deal with their financial situation in the best way. This can help empower people of financially underprivileged backgrounds while making those in positions of financial privilege become more aware of their status.
Knowing that it's not the money you have but what you do with it, can bridge gaps between students and foster more tolerance and understanding among our nation's youth.
In helping our readers get the most out of their ringgit and exposing them to new and interesting ideas about money, it's worth thinking about the future generation of money-savers as well.
Hopefully, financial literacy would be taken more seriously as a subject of classroom study in the decades to come. What do you think about this proposal? Would you rather include some other subject in SPM instead? Let us know in the comment section below, and good luck to those taking SPM this year!