Financial Literacy Should Start With Palau’s Youth

By Jackson Henry —-

In ancientPalau, folks skilled in building canoes or fishing were highly revered and admired in the villages. Their skills secured their future. That is understood since the ancient Palauan economy revolved around self subsistence and survival did not depend on cash. In this modern world, cash management for this generation of Palauans has become a crucial tool for survival and self advancement. Thus, financial literacy can no longer be considered a folly but a skill required to navigate our way in this “jungle” of money and finance. Hence, we need to teach basic finance to our youth today so they do not squander their future.

So if you are a Palauan youth reading this article, you have a huge “leg up” over your peers and over millions of people around the world. According to US statistics, less than 50% of adults do not even have a budget. 40% of credit card holders carry over their principal balance from month-to-month. 33% of the people never pay their bills on time. Survey also indicates that 80% of people say they need professional financial advisors. No wonder why so many people have to borrow from friends and neighbors just to make ends meet or when they encounter sudden money woes. Habitual borrowing is a symptom of financial illiteracy.

The problem with financial literacy or lack thereof, is cultural. Some cultures regard money discussions with children, like sex, as taboo. Thus, parents and village elders shove money matters “under the carpet” and leave the young to grow up picking up bits and pieces of money management from the streets and from non-professional acquaintances.  With money now playing a larger role in our society and in cultural activities,Palaucannot afford to handle money like rolling dice in a casino.Palaucan no longer afford to bury its head in the sand, like an Ostrich, impervious to today’s money matters.

Financial literacy is best taught to the Palauan youths early. The first lesson is “money do not grow on trees…. they must be earned”. Second is “there is no free lunch….someone has to pay for it”. Third is about budgeting, income and prioritizing fixed and variable expenses. Savings and investments also should be taught so they can learn to be financially independent during their retirement years. Knowledge in banking, taxes, jobs, obtaining loans for commercial or consumers uses, credit cards and buying or renting homes are also critical to know at an early age. Good money skills lead to financial autonomy.

Whether Palau likes it or nor, whether its cultural or not, our youth are facing financial challenges at an early age today and so they need proper tools to tackle these challenges in order to avoid the pitfalls that so many adults fall in today.

It can be construed that financial illiteracy can drive youth to steal, beg or borrow in order to meet their money needs. By contract, financial literacy can make a huge difference by empowering the youth to be good citizens and to build solid foundations not to be liabilities but to be assets of a nation.  As William Jennings Byan once said, “destiny is not a matter of chance, it’s a matter of choice”. Financially literacy is a choice. To get ahead, teach basic finance to your kids today.

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