ARE YOU FINANCIALLY LITERATE?

It is an extremely emotional and trying period we are all going through and some might get laid off from work during these unprecedented times. Do remember that through strength comes through struggle. When you learn to see your struggle as opportunities to become stronger, wiser, and better; thinking changes from ‘I can’t do this’ to ‘I must do this’.

There are so many information out there that at times can become overwhelming. It is even more important to appreciate people around us-including our community- and be there for one another.

I would like to take off your mind from these worries and nudge you to think about learning new skill or being informed. I would like to bring your attention to financial literacy

Lots of men and women are not financially literate. However, women face unique financial challenges, we need the financial knowledge to build a financially secure future. We exhibit different saving and investment needs as we spend at least part of our retirement in widowhood. In this pandemic, gender pay gap is worsened. A majority of women work in community, administrative, and domestic job. Women represent a majority of low paid workers and part timers, and are in general tend to be laid off in higher rates than men. Women have a higher risk of falling into financial risk and also poverty during the covid-19 pandemic.

In addition, low financial skills combined with fewer available resources puts women’s financial security now during the pandemic and after retirement at risk. Women make less money which means less savings year over year. Having a low financial knowledge has substantial consequences because it is linked to several financial decisions.

Financial literacy is the ability to process economic information and make informed decisions about financial planning, wealth accumulation, debt, and pensions. According to OECD study, 33% of adults in the world are financially literate. 77% of the global adult population—roughly 3.5 billion people, lack an understanding of basic financial concepts.

Financial literacy has been shown to have a positive causal influence on wealth. People with basic financial concepts and life-long consequences of financial decision are most likely to set money aside. When women become financial literate, they ultimately pass it on to their children, especially daughters.

The Standard and Poor’s Ratings Services Global Financial Literacy Survey measured financial literacy using questions assessing basic knowledge of four fundamental concepts:

· Numeracy (simple interest)

· Compound interest

· Inflation

· Risk diversification

In order to be financially literate, we need to be able to answer 3 out of 4 questions regarding the above. Financial literacy is about education and confidence. It is not just about maths but how we are able to find information.

Are you financially literate?

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