Participants use a staircase under signage which reads "Annual Meeting 2024" at the World Economic Forum (WEF) meeting in Davos on January 17, 2024. Image Credit: AFP

At the recently held Annual Meeting of the World Economic Forum in Davos, financial resilience was discussed as a strategic policy lever that could safeguard the welfare of the global population.

Many statistics and studies point out to the urgency and importance of rolling-out financial literacy programs on a mass scale. A seminal global study conducted by S&P in collaboration with the Global Financial Literacy Excellence Centre reveals that only 33 per cent of the global population possessed a sound grasp of financial literacy.

Furthermore, another global survey across 81 countries stated that if governments failed to address the growing, costly demands of ageing societies, they could face fiscal setbacks of up to 9.1 per cent of gross domestic product by 2060, compared to 2.4 per cent in 2025.

With rising life expectancies, projections also indicate that individuals across the globe may face the challenge of outlasting their retirement funds by a span ranging from eight to as much as twenty years, with women bearing the greatest impact of these diminishing funds.

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Given the constantly changing economic landscape and personal challenges — ranging from resignations, job losses, career interruptions to high living expenses, emergencies, illnesses, or unplanned retirements — possessing a strong foundation in financial management can empower individuals to navigate these circumstances effectively and mitigate the potential negative financial consequences they may entail.

Embracing advantageous career moves

Financial literacy programs have yielded positive feedback from governments worldwide. Given the integral connection of money management with various aspects of an individual’s life, such programs should be regarded as a fundamental pillar within any educational system aspiring to equip individuals with the expertise and abilities to make informed financial choices.

These programs cover essential aspects such as budgeting, long-term savings, responsible debt management, emergency funds, and investment optimisation. The acquired knowledge benefits employees in various scenarios, such as gaining insights into workplace benefits, negotiating better salaries, embracing advantageous career moves, and planning for retirement.

Similarly, business owners, equipped with financial acumen, can lead their enterprises effectively, making decisions that contribute to profitability. Empowering individuals in financial management promotes wealth-building and economic self-sufficiency, fostering economic growth and reducing welfare costs for countries.

Many governments have launched successful financial literacy programs targeting diverse audiences, in line with their economic resilience strategies. Denmark boasts one of the world’s highest financial literacy rates, currently standing at 71% according to global reports.

The country has implemented various signature programs to further ingrain financial literacy within its population, including compulsory financial education in the national curriculum for seventh to ninth-grade students since 2015. Topics covered encompass budgeting, savings, loans, consumer rights, and banking operations.

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Importance of financial education

Danish Money Week runs every March and engages over 20,000 students and 700 schools annually, featuring visits from financial sector professionals to emphasise the importance of financial education.

Additionally, Denmark’s central bank, in collaboration with Alinea Publishers, has developed a digital teaching platform revolving around economics, utilised not only during Money Week but throughout the year. The central bank also extends its educational activities throughout the year to give over 100 lectures targeting upper secondary schools and business colleges each year.

Financial literacy education is integrated into the Australian Curriculum, starting as early as preschool, where children engage in interesting activities related to money. In schools, teachers use class discussions across various subjects to address real-world financial issues.

Financial literacy is embedded in various core subjects spanning mathematics, humanities, social sciences, and digital technologies. Students learn practical information with regards to Goods and Services Tax, income tax, interest on loans, currency conversion, discounts, profit and loss, credit card debts, budget plans, and making sound consumer choices.

The Moneysmart website, powered by the Australian Government, offers resources for teachers to utilise many financial principles within various contexts, such as school events, to teach students about budget planning and real-world financial problem-solving.

On the regional level, Abu Dhabi’s Authority of Social Contribution “Ma’an” has incepted the “Ghaya” financial literacy program to enhance understanding of money management as a way to support people’s personal financial goals.

The program covers crucial elements such as comprehending financial priorities, managing budgets and expenses, defining savings objectives, establishing emergency funds, and making prudent spending decisions.

That said, financial literacy must be regarded as an important policy pillar in economic resilience strategies, with the goal of fostering prosperous societies and enhancing the overall quality of life for citizens.

Sound money management

A number of diverse solutions could be implemented in this regard. It is vital to spread awareness about the significance of financial literacy, encouraging individuals to actively seek expert guidance available across various platforms and channels.

Financial literacy should be integrated into school curricula at an early stage to instill sound money management knowledge among students. Community workshops and seminars could extend practical advice beyond formal education to a broader audience, including employees, informal caregivers, and the elderly.

Governments can also enhance accessibility through user-friendly online educational platforms, while financial literacy apps can cater to the tech-savvy population, providing interactive tools and information on budgeting, saving, and investing. These diverse approaches aim to reach various demographics and promote widespread financial literacy.

To develop comprehensive financial literacy programs, governments may engage with financial institutions, experts, and advisers to collaborate on content creation and deliver tailored initiatives. Furthermore, providing free one-to-one financial coaching services allows individuals to seek personalised guidance.

Workplace-sponsored financial literacy programs are convenient for offering guidance to employees on a large scale. Additionally, specialised programs aimed at entrepreneurs can enhance their financial skills in managing enterprises.

All of these concerted efforts on financial literacy aim to equip society with the skills to navigate financial decisions and become informed and responsible citizens.

Sara Al-Mulla is an Emirati civil servant with an interest in human development policy and literature