Someone asked for my views about the content of a financial literacy talk for secondary students. After some discussion, we agreed on the following:
* to set aside savings, from parent's allowance or part time work, in a bank account
* to distinguish between necessary and avoidable expenditures
* to calculate the interest charges on installment payments for computer, mobile phones and other items
* to avoid investing in products that are inflexible and have high charges, e.g. life insurance policies
* to have flexible savings that may be needed to pay for education and other necessary expenses
* financial burden to parents on sending children for education in overseas universities
These points are covered in my book, Practical Guide on Financial Planning which is available here.
Please share your views on other points that should be included.
Tan Kin Lian
I am thinking if there are any good unit trusts just for students, with lower fees and cater specially to their needs.
ReplyDeleteThen set up a plan which allows monthly contribution of say $10 or #20.
To illustrate the beauty of compounded interests on savings.
ReplyDeleteTo teach savvy use of credit cards and to avoid the pitfalls of high interest credit card debt.
REX comments as follows,
ReplyDeleteIT was very strange, when i attended University, they taught "Time Value of Money" under the subject "Operations Research" and that was only in the 3rd Year of Engineering course.
Now why can't they teach all these PV, FV, PMT stuffs to Pre U students? The compounding formula is based on Geometric Progression which formula they already learnt in Sec 4, (sum GP=a r^n-1/r-1) so they should be able to handle this topic. It is far more interesting and practical teaching them such money topics, as compared to doing an Integration calculation to find the area under hyperbola curve with a specific parametric forumla.
With a good understanding of Time Value of Money and compounding, they can move on to the skill to generate Business Plan which Lending banks sometimes like to see when a small business is set up. With spreadsheet, it is very easy to do, these young fellas pc savvy should have no problem figuring it all out, and enjoying it .
REX