The Federal National Council has called for steps to increase investment literacy, as The National has reported, but there might be merit in going further still. Everyone in the UAE would benefit from learning about financial matters overall. The need for lessons in financial literacy and investment literacy is only one part of this.
The FNC is urging the Securities and Commodities Authority (SCA) to take steps to raise investment awareness because some are turning to short-term investment and speculation, practices that can adversely affect the country’s long-term economic prospects. The FNC is right to identify a potentially serious problem, but young people also need to know the ins and outs of personal finance. Obviously, this is beyond the SCA’s remit and must fall to the education sector. There is little doubt that it will fill a big gap. Too many people lack awareness of how to budget and save. The National Bonds’ latest Savings Index in 2014 showed that the majority of UAE residents do not have a suitable financial plan. Combating this lack of financial literacy means starting young, even before some of life’s biggest expenses appear on the household budget. Banks should be encouraged to launch awareness campaigns about how to manage money for lifelong financial stability.
More crucially, perhaps financial literacy should be part of the school curriculum, starting in the early years and continuing right through high school. It could either be integrated into mathematics or as a separate financial management course, with a focus on making it relevant to everyday concerns, such as what to look for in a bank; debit Versus credit cards; canny ways to pick a car loan; how to balance your personal budget.
The naysayers will argue that financial literacy is best learnt at home. So is learning how to cook and clean and yet in countries that teach home science at school, it is said to be an important addition to the curriculum. As well as a vital resource for children who aren’t taught the basics of cooking and housework by their parents. The same argument must apply to financial literacy. If the parents don’t know it or can’t transmit it, at least let their children learn it at school.