Personal Finance 101
Asked 3w ago
There are a few reasons, mainly because of
1) social media. In a hyper connected era, we simply cannot avoid advertisements of any kind, whether it is direct, e.g. Followed certain influencers, YouTube ads, or indirect, e.g. Friend's recent staycation. Getting constantly bombarded, while not being actively thinking about it can cause a subconscious effort to spend more.
2) Simply don't have resourcefulness. For those living paycheck to paycheck, and is really poor, ie can only afford to spend on necessities, dependant on grants, they only focus on survival, and hope the kids get a better life, this group I can't fault them.
For those that are not under this category, they may not be actively seeking out personal finance, due to laziness, information overload, not enough time/money, too paranoid/skeptic, too proud.
3) Different priorities. Depends on how young the adults you are referring to. In the 20s, people are getting rushed to complete degree, followed by marriage. Where got time to think about personal finance? If any, the goal of planning during this period is to save up for wedding/house, which is relatively short to mid term. After that, it's the mortgage (and possibly baby) to take care off, which simply takes out whatever remaining resourcefulness they have. Young adults may eventually settled for the stable rat race life (by working hard in their jobs for that increment/promotion) because who would want to choose uncertainty while having commitments?
4) Possibly the most damning one of all. Crab culture, as mentioned by The Woke Salaryman, combined with an echo chamber.
See who they hang out with, and do they talk about such hard topics. It's easy to say, hey that guy did it. But when the guy talks about what he sacrificed to get there, these people turned off, because they are comfortable with where they are and are either afraid or unwilling to change, without seeing if there's any way to adapt/modify the lessons learnt.
And what do people usually do after learning about such things? They tell their friends, who have no context of the situation. What does the friend do? The friends, whether out of genuine concern or otherwise, shoot the idea down. (E.g. 100k by 30? 1M65? Mai siao lah translation: don't be crazy/lunatic) having received this kind of feedback, it further reinforce the belief for this group of people that financial literacy is not for them, or that it's a scam.
That’s a really interesting question, though it hinges on the assumption that young adults are not financially literate—which is not necessarily the case today.
—1) Older =Savvier in Financial Literacy?
I suppose it’s also a matter of how we spend our free time outside of mugging/working and spending money on treats.
I do observe that there’s an increasing trend of more financially literate youth over the years and they may be even savvier than older adults sometimes in terms of managing finances as they are exposed to more information online via blogs and websites like Seedly.
I also don’t feel that it’s a fair assessment that age dictates how financially mature or literate an individual is—just look around you for real life examples.
Perhaps in the past a particular method of saving and investment worked very well as SG economy transformed from industrial economy to a knowledge based economy today, and some people benefitted greatly from smart investing decisions during that period.
However, SG’s economy is no longer enjoying that rapid economic growth anymore— so some “tried and tested” advice from the previous decades may not work as well for young people now.
—2) Priorities Differ
Each of us has different needs and wants— some prefer to YOLO while others adopt a more conservative suffer first enjoy later approach. I do not think it’s fair to stereotype most young adults as irresponsible and frivolous in spending. It’s just a matter of different values when it comes to budgeting and investment.
—3) Decision making depends on stage of life
Perhaps if one is single without any obligations or dependents to look after and is generally healthy, he/she may not feel that it’s urgent or pertinent to manage his/her finances. However, when people move to different phases of life, their decision-making when it comes to what to spend on and what not to would change accordingly.
Ultimately, what works for somebody may or may not work for you. So, use your own discretion to make important financial decisions wisely—it’s your life anyway.
I think that the young adults today are generally better in terms of financial literacy than say 10 years ago.
That is because of social media where it is easier to get information from platforms like Seedly, Investment Moats etc for free.
We have come a long way and I think we are getting there.
Saw this really interesting question. Here are my thoughts about this!
Personal finance is fundamentally broken because:
We live in a Singapore society which is Capitalistic & Meritocratic
We prioritise hard STEM skills such as Science Technology, Engineering and Mathematics
Personal Finance evolves with the times with new policies, rules and
However, it is improving and getting better because:
The Internet - simple nformation is found online
People are realising that it you can DIY and learn from other community members
People are less afraid to talk about it, a taboo topic, online and offline
I actually don't really believe the solution is to teach it in schools because I do believe that these life lessons are often best if they are taught at the point when you need them.
And it really can be a very 'opt-in' subject.
But fun fact, in University, Personal Finance is a level 4000 module, which is way more advanced than a level 1000 module. (shocking!)
Hope this helps, Cheers!
Some possible reasons based on what I have observed in my surroundings (on top of those mentioned - different priorities/ lack of resources):
Not having the right settings to learn about financial literacy - most millennials in Singapore generally have a relatively comfortable life without having to worry about their expenses, and regular allowances by doting parents. This entitlement may have set a comfortable lifestyle with little second thought when purchasing items such as one drink (tea/ coffee/ bubble tea, etc) a day, unlike the past generations who were more careful with their spendings.
Misconception that financial planning starts after you have your first income. This misleading notion that budgeting (likewise setting aside savings for financial goals / investment & insurance) is too early becomes a complacent reason for millennials to delay their learning about finlit.
Nevertheless, there are many sources like Seedly, or new robo-advisory platforms that are gaining the attention of the younger generation. So, it's depends on the young adults themselves to pick up these skills, where the past education syllabus may not have covered enough. Start learning, and start hustling!
Reading through other answers, I think that maybe is our Singapore environment, while focus on market economy is also quite socialist, much more than most except for Communist nations. So the people trusts the government (nanny state, used previously) including personal finance advise. From housing (social housing + loan limits), personal + car loans, retirement planning, child education, insurance (Medi-schemes, MHA/MINDEF etc), CPF Life (annunity), healthcare (Pioneer & Mendaki), SSB, SRS etc, etc - many apects of personal finance has "advised" and catered by our government to some extend.
So to get more young people exposed to financial literacy, our government just need to tell our parents & young that is important. However, then more people would also question and ask for liberty to manage it themselves since they become more aware.
Most people understand the concept of saving. However, how to channel those savings into risk-managed investments delivering suitable returns was not taught in school.
This, coupled with YOLO culture may not be helpful to frame one's mindset towards understanding finance and spreading returns out in a consistent manner over the years.
If you are interested to learn more about financial management. Don't hesitate to reach out! (From a fellow investor)