Questions are posed by a student doing a project. The answers are given by Tan Kin Lian.
1. Do you think young adults are able to manage their money well?
Answer: Most young adults are not able to manage their money well. They do not know the fundamentals of budgeting, the importance of savings, and do not know how to make the right types of investments.
2. What are some on-going activities available for young adults on money management?
Answer: They can attend talks on financial literacy conducted by community centers and government agencies. However, they should be wary about talks that are conducted by representatives from financial institutions, as these speakers are reluctant to tell consumers how to different between good and bad financial products. The financial institution can make a better profit margin from the bad products. It is better for consumers to attend talks conducted by pro-consumer organizations.
3. To what extent are parents and schools responsible for money management issues among young adults?
Answer: Parents and schools should provide guidance to the young adults on the suitable educational talks and books on financial management. However, if the parents and teachers are ignorant themselves, they would not be able to provide the right guidance.
4. Are there any schemes for children to start saving from young? If yes, what are they? If no, what are some possible schemes that can be implemented?
Answer: The problem about saving is that the interest rate paid on savings is extremely low and is lower than the rate of inflation. In this environment, it is difficult for children and young adults to be interested in saving, as they find that their savings are eaten away by inflation. It is important for the government to provide bonds that can give a better return than inflation rate, so that people find it attractive to save. The government has to play a role here.
5. Do you think that counselling is an effective solution to solve the problem of young adults overspending? Why or why not?
Answer: It is more important to educate young people about budgeting, saving and spending, and the high interest rate charged on credit card and other borrowings. If the young people are aware about these fundamentals, they will be more willing to save. There are a few websites that are written by pro-consumer writers. The young people should be introduced to these websites.