When it comes to understanding finances, there are many questions that haunt me. Are we truly inclusive when it comes to finances? Can we distinguish between our needs and wants? Are we vulnerable to financial scams? Are we aware of our nation’s economic situation? Do we educate ourselves about banks and financial institutions?
All of these questions find their answers in the realm of financial literacy. Recently, I had a wonderful opportunity to collaborate with the Ujyalo Foundation and the British Council to host a workshop titled Money Talks, which aimed to amplify women’s voices in the field of financial literacy.
While saving and investing may seem ordinary to us, it is crucial that we also understand the misconceptions and myths surrounding money. Millennials and Gen Z often find themselves confused when it comes to financial matters. Gen Z, in particular, has largely relied on their parents for financial support throughout their lives, but an understanding of financial literacy can change this.
Need for financial literacy for Gen Z in Nepal
Financial literacy is crucial for young and ambitious individuals, even though they may assume it is only for the elderly and less educated. In the workshop, I shed light on why financial literacy is even more vital for the younger generation.
They have dreams of owning a home, retiring early, paying off debts, travelling the world, or starting a business. However, without financial literacy, these aspirations remain out of reach. Financial literacy empowers one with the knowledge, skills, and mindset to effectively manage and grow money.
It enables one to make wise financial choices, overcome short-term setbacks, and achieve long-term objectives. It is not just for older or less educated individuals; it holds even greater significance for young people also as they face unique challenges.
This generation is constantly bombarded by consumerism. The lines between needs and desires are blurred, and society equates success with material possessions. They are easily swayed by trends and the allure of new trends and fashion.
Social media platforms monetise their personal information and tempt them with tailored ads, making it difficult to resist unnecessary purchases. Unfortunately, acquiring things to impress others online jeopardises their financial security. The Covid pandemic exposed the harsh reality for many young individuals living paycheck to paycheck. If only they had possessed financial literacy and built an emergency fund.
They are impatient and seek rapid wealth. This impatience, coupled with ambition, makes them vulnerable to financial and investment scams. Even those who invest often lack the necessary literacy and end up losing both their money and their future.
Traditional savings accounts are no longer sufficient to build wealth steadily. Inflation erodes savings, and many turn to the financial markets without truly understanding them. The fear of losing money hinders anyone from investing and achieving their financial goals.
Experience at Money Talks
As a young banker, I have a vision of spreading financial literacy throughout our country, with a particular emphasis on reaching out to Gen Z. Last week, being a part of Money Talks gave me this chance. During the workshop, I noticed that even something as basic as applying for an initial public offering (IPO) was a new concept for many participants.
However, they were eager to learn about investments, IPO applications, the process of using apps like Meroshare, and other stock-related terms.
The participants were largely unfamiliar with economic terms such as inflation, recession and liquidity. In order to ensure their comprehension in a simplified manner, I employed a range of effective techniques, including the use of relatable real-life examples, insightful articles and the comparison of economic data.
Additionally, their curiosity was piqued by Nepal’s liquidity crisis, prompting me to provide a comprehensive explanation of its nature, while also dispelling any circulating misinformation that misleadingly equated it with Sri Lanka’s economic crisis.
One noteworthy observation regarding the Gen Z participants was their tendency to blur the line between their genuine needs and mere wants. This inclination towards unnecessary expenditures rather than saving stems from a lack of conscientiousness. Furthermore, there appeared to be a prevalent habit of procrastination when it came to saving money.
To address these issues, I encouraged the participants to develop a discerning ability to differentiate between their essential needs and desires. By fostering this distinction, they could prioritise immediate action towards saving and investing, starting from that very day.
Most of the participants were recent graduates and were involved in entrepreneurial ventures in the arts sector such as painting and ceramics. Considering their circumstances, I encouraged them to take advantage of subsidised women’s entrepreneurship facilities to help grow their businesses.
The workshop covered various topics, including portfolio diversification, insurance, budgeting, and financial planning. The workshop ended with business idea pitchings by the participants. To my surprise, they came up with so many innovative ideas really triggered me to start up my own business as well.
Despite their diverse educational and familial backgrounds, I find great optimism for the future as I witness these young women keenly interested in Nepal’s economic and financial landscape. A promising path lies ahead as they actively engage with these subjects.
Our education system fails to impart basic personal finance skills. We learn complex equations with little relevance to our lives while financial literacy is neglected. We rely on social platforms for financial knowledge, but the information may be exploitative.
However, we have the power to educate ourselves. Online financial literacy courses and technologies are readily available. We can start by tracking our income and expenses, categorising them, and creating a budget based on available funds.
Additionally, understanding finance will help to bring more money through formal channels. This will play a vital role in mobilising the economy in the bigger picture.
Financial literacy may not be as complex as rocket science, but it does require dedication. With determination, one can attain the essential knowledge and skills to navigate financial paths successfully. It is time to seize control of the finances, chase after aspirations, and safeguard the future.