29/01/2021
Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.
The lack of these skills is called FINANCIAL ILLITERACY.
A study from Cambridge University and University College London, found "striking weaknesses" in adults' financial skills across 31 countries.
It says financial literacy is essential if consumers are to avoid getting into debt or being misled on money matters.
In the Philippines, the BSP made a study of about the extent of financial literacy of Filipinos.
“Financial distress is a reality for Filipino families living from paycheck to paycheck, those relying on low-income livelihoods, and those dependent on remittances from relatives abroad. Even families who were doing relatively well are increasingly becoming vulnerable as the pandemic continues,” BSP said
Of the seven financial literacy related questions, BSP found that Filipino adults were only able to correctly answer three as they have little understanding of compounding interest; the effect of inflation on the buying power of households and investment risks, returns and diversification.
Survey results also shows that Filipinos have a forward-looking attitude, but scored low in daily money management and long term financial planning.
www.philstar.com/business 2020/07/14/2027722/pinoys-need-improve-financial-literacy-bsp
This is one of the problems that we Filipinos are facing but we are ignoring.Yes. We have a problem and it is Financial illiteracy.
We have the duty to learn and be guided with our finances for us to avoid getting into lots of loans and debt. We should learn the basics of inflation, compounding interest, stocks and investments.
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