The lack of understanding of what, how and why financial literacy, shows how low public awareness is about the importance of financial literacy as a life skill. This phenomenon is evidenced by the fact that the victims of fraudulent investment fraud, the unwise use of credit cards, and the dislike of some members of the public towards the money. Financial literacy is an individual life skill. The question arises then, who is responsible for equipping people’s financial literacy?
At this time, financial literacy is considered unimportant, so it does not need to be taught to children from an early age. In the culture of some developing countries, it is taboo to talk about everything about money in front of the child. That is why knowledge, attitudes and skills about the financial health of the family do not get a share in the curriculum of primary and secondary education, even at the college level. Therefore, it appears that financial literacy is not a life skill that must be provided to children. The assumption is that, after all, without being taught, a child according to the development of his age will know what money is.
Financial literacy is not a matter of knowing or not knowing money as a means of payment. However, as an individual’s ability to manage finances wisely according to needs, not based on desire. From an economic perspective, there are clearly differences between needs and wants. Needs are limited to what is necessary, while desires are infinite in nature.
That simple concept, if we want to be honest, is never taught to the child. When a child whines about asking to be bought something—which is not necessarily needed but just wants to have—willingly the parent will fulfill it immediately on the grounds that they can’t bear it. Such conditions without us realizing it will form a child’s consumptive attitude. When we hear the stamp that our society is a consumptive society, without guilt we blame environmental factors. Whereas in the family environment, we ourselves have triggered a consumptive generation.
The task and responsibility of teaching finance in the family can be started by providing an understanding of the difference between needs and desires—which is the basic principle of economics. Teach children with examples yang easy to understand according to their age development. At an early age, you should be a role model in shopping behavior. You should not be shopping due to desire for lust or prestige, but indeed the goods and services you bought are necessary.
When they turn into adolescence, avoid, or limit the social environment with their peers who tend to be hedonistic. Start teaching them about simple financial management. Instill an attitude of appreciating every dollar received and spent then record every receipt and expenditure. If necessary, you have them collect evidence of shopping. Check their bookkeeping records at the end of each month. Evaluate and discuss as reflections on their shopping behavior. Invite them to open a savings account in a banking institution.
When entering the age of high school, teach the 70:20:10 pattern in managing money. A maximum of 70 percent is allocated for consumption expenditures, 20 percent for investments and 10 percent for reserve funds must be saved. At the same time, give them understanding about difference in the functions of investment and savings. When they want to have a credit card, don’t you immediately agree. It’s a good idea to understand them on advantages and disadvantages between credit cards and debit cards. When you turn a student, start teaching various investment instruments as a strategy for planning future finances. Teach them the investment formula of high gain high risk, moderate gain, moderate risk, and low gain low risk. So that in the future they have a wise understanding and are not tempted by investment offers with a fraudulent mode.
Education institution from early childhood to universities must have a commitment that financial literacy is part of life skills and must be taught to students and students. Individual financial health learning should be used as a supplement to relate subjects. In economics and accounting subjects at the high school / vocational level, for example, financial literacy learning can be inserted. This is because the course is only taught within financial institutions, not individuals. Similarly, higher education level can offer financial literacy course.
Educational institutions can cooperate with business actors to sit together to create financial literacy programs as part of corporate social responsibility. Companies, for example, can provide teaching materials in the form of comics that children like. Another form of activity can be in the form of sending the CEO or its Board of Directors directly to teach financial literacy to schools or universities.
Meanwhile, the government is also responsible for educating the public to have a comprehensive understanding of managing individual and family finances intelligently and wisely. Policy regulatory support is important, especially since the government is currently launching a cashless society program. Together with educational institutions, relevant government agencies should formulate policies so that financial literacy is included in the learning curriculum at all levels of education. Finally, we hopes that all nations in the world will have a people who are all literate, digitally literate, and of course financially literate so that they can unravel the problem of poverty.