Teaching financial literacy at school plays an important role in shaping the life of school children to face financial challenges in future. The Organisation for Economic Co-operation and Development (OECD) in its assessment and analytical framework report in 2013 found that low levels of financial literacy have also been associated with a lower standard of living, decreased psychological and physical well-being and greater reliance on government support.
Financial literacy is the ability to make informed judgments and effective decisions regarding the use and management of money. It empowers an investor to make the right decisions and finally achieving financial stability. Financial education is a long-term process. Building it into curriculums from an early age allows children to acquire the knowledge and skills to build responsible financial behaviour throughout each stage of their education.
Some of the major quintessential studies like MoneySENSE in Singapore and AC Neilson research in Australia found that poor financial literacy is often associated with the direct result of poor basic financial skills. These studies collectively impart that without proper financial literacy, individuals made investment errors and are prone to making wrong decisions in the management of money.
The UAE is a rich country in the Middle East region that is vibrant and cosmopolitan. In 2013, the total population of the UAE was recorded to be 9.2 million. Expatriates contributed to around 7.8 million with the Emiratis accounting for 1.4 million of the population. With so many complexities and challenges there was no formidable research undertaken to analyse the savings and spending propensity of the UAE and how they rely on investment information to undertake saving decisions.
It is not surprising that financial literacy is already a principal subject of discussion in the UAE with a portion of the nation’s economic development program aimed at producing a financially knowledgeable society that will prop up a sustainable, diverse economy by 2030.
Banks, institutions and private firms are joining to collaborate in introducing financial literacy curricula in schools to make children financially strong in making investment decisions.
- The reader is a doctoral researcher on financial literacy in the UAE.