Financial education increases financial knowledge and planning: Study

[CityFarmer]

Financial education helps for a better personal finance. Role model, especially from parents help too...

Financial education increases financial knowledge and planning: Study

SINGAPORE - A study of a group of 565 local university students has found that undergoing financial education increases financial knowledge and planning.

Those who received financial education showed an 11 per cent improvement in financial knowledge scores and a 16 per cent increase in the prevalence of financial planning, compared to students who did not.

Professor Olivia Mitchell from the Wharton School of the University of Pennsylvania presented her findings on the research at the inaugural symposium organised by the Citi-SMU Financial Literacy Programme for Young Adults yesterday (July 4).

“Prior to this study, what we knew was that people who have a lot of financial knowledge, also had good financial habits. They save, plan and invest well, but what we didn’t know was the cause. So now by constructing this experimental structure, we can clearly identify the causal effect, that financial education leads to enhanced financial knowledge and better financial behaviours.” said Prof Mitchell.

She also said that the low levels of financial literacy around the world is coming up against a proliferation of very complex investment products. Having basic financial knowledge can help people make informed decisions is important, she added.
...
http://www.todayonline.com/singapore/fin...ning-study

[profeszor]

How unexpected. The next thing we will find on the news is that scientific education increases scientific knowledge. Shocking, definitely.

[brattzz]

lolz! ok lah ok lah, sometimes there will be articles like that... stating the obvious..

[kazukirai]

There's another article in today's issue of the Sunday Times' Invest section which states that Singaporeans' have the highest level of financial literacy among all the countries surveyed. Survey was carried out by State Street I think. Anyhow, that's pretty interesting to me because all along I was under the impression that most Singaporeans have a shockingly low level of financial literacy (judging from the level of postings on the VB, most of our buddies here are of course, of a different breed).

Looks like there might be good money to be made from trying to increase financial literacy not just in Singapore but also elsewhere.

[chialc88]

I was under the impression that most Singaporeans have a shockingly low level of financial literacy.

rai,
I thought so too until:
#1. I observed that all my students are buying and selling stocks during trading hour (using virtual $$$. thanks god!)

#2. I overhead a group of BA students studying for exam. Oh boy, coupon, zero, dividend, equity, reits and trust, ROI, hurdle rate.
I tell you, my attitude towards these youngsters changed immediately.
My heart warm up.
SGP future is bright!

Love Compassion


Earth day - save the world everyday.

[CityFarmer]

lolz! ok lah ok lah, sometimes there will be articles like that... stating the obvious..

The obvious is usually not so obvious in practice after all

Professionals are well educated in financial education, but it doesn't mean they wouldn't fall into obvious trap.

I noted more on the "16 per cent increase in the prevalence of financial planning", rather on the "11 per cent improvement in financial knowledge scores".

[butcher]

a random article for leisure reading on your rights as an investor

[greengiraffe]

banks are dangerous places if ones lack wisdom

http://www.straitstimes.com/business/ins...an-her-pay

An endowment insurance plan bought two years ago by Madam Corinne Han has proved a costly mistake.
The Prudential policy, which Madam Han, 57, bought at United Overseas Bank (UOB), requires her to pay yearly premiums higher than her annual pay.
She told The Straits Times that her intention in visiting UOB in 2013 was to open an account and inquire about fixed deposits. Instead, she ended up purchasing the policy that came with freebies like an air-fryer and a steamer.

Madam Han, an administrative executive with O-level education, earns about $30,000 a year, but the policy requires her to fork out an annual premium of $40,000 for five years, translating to total premiums of $200,000. So far, she has paid $80,000.
Back in 2013, when she visited UOB, she had $350,000 on hand due to a divorce settlement.
But after accounting for legal fees and loan payments, she would be left with about $100,000, insufficient to pay for the total premiums of $200,000.

[NTL]

banks are dangerous places if ones lack wisdom

http://www.straitstimes.com/business/ins...an-her-pay

An endowment insurance plan bought two years ago by Madam Corinne Han has proved a costly mistake.
The Prudential policy, which Madam Han, 57, bought at United Overseas Bank (UOB), requires her to pay yearly premiums higher than her annual pay.
She told The Straits Times that her intention in visiting UOB in 2013 was to open an account and inquire about fixed deposits. Instead, she ended up purchasing the policy that came with freebies like an air-fryer and a steamer.

Madam Han, an administrative executive with O-level education, earns about $30,000 a year, but the policy requires her to fork out an annual premium of $40,000 for five years, translating to total premiums of $200,000. So far, she has paid $80,000.
Back in 2013, when she visited UOB, she had $350,000 on hand due to a divorce settlement.
But after accounting for legal fees and loan payments, she would be left with about $100,000, insufficient to pay for the total premiums of $200,000.

 
Not just banks. Even insurance agents are doing that. They like to ask their potential customers to buy endowment using half of their declared cash, so that they can enjoy a "better return" for their cash.