This article first appeared in The Edge Malaysia Weekly on November 13, 2023 - November 19, 2023

There have been calls lately for financial literacy to be taught in schools.

Parent Action Group for Education chairman Datin Noor Azimah Abdul Rahim proposed that subjects related to financial literacy should be taught in secondary schools, if not earlier. “Teaching people how to manage their money from young would make them wiser in the monetary sense and in the decisions they make as adults,” she said in an Oct 5 news report in theSun.

Press reports indicate that although Insolvency Department statistics show youth bankruptcy has been on a downward trend since 2017, over 31,000 youth aged 35 and below were registered as bankrupts from 2014 to May this year.

Azimah’s call was echoed by Amy Seok, chairman of Malaysian Literacy in Financial Education Association. She was quoted as saying in the same report that financially literate young adults would be less likely to depend on government aid programmes and have higher rates of home ownership and business ventures.

Financial literacy is basically basic money-management skills and includes programmes that focus on topics such as budgeting, saving and credit management, retirement and savings. (For the record, these are all topics covered by the two financial literacy programmes for young people under The Edge Education Foundation [TEEF]: “Money and Me: Youth Financial Empowerment Programme”, a co-curricular programme in English for Form 4 students, and Cekap Duit: Cakap Tentang Duit, a programme in Bahasa Malaysia for youth both in and out of school.)

There is research to back the belief that those who are better at managing their money are less likely to become bankrupt. One study published in the International Review of Financial Analysis in May last year (“Personal bankruptcy and consumer credit delinquency: The case of personal finance education” by Vishaal Baulkaran) showed that US states that required personal finance education for high school students had fewer Chapter 13, Chapter 7 and total bankruptcies (both chapters pertain to personal bankruptcy).

Other research shows that those with low financial literacy are much less likely to invest in stocks. They are also less likely to plan for retirement or accumulate wealth. The fact that most Malaysians cannot afford to retire should strengthen the case for financial education in schools.

TEEF’s journey in financial literacy began in 2014 when New York-based Citi Foundation gave us a grant to design and launch a financial education programme for secondary school students. “Money & Me: Youth Financial Empowerment Programme” was launched at five schools in Kuala Lumpur and Petaling Jaya in 2016 in collaboration with partners from the private sector. Money & Me teaches both financial literacy and basic entrepreneurship skills such as coming up with a simple business plan which students have to implement at the end of the programme.

From about 90 students in Selangor and Kuala Lumpur, Money & Me has grown to encompass some 500 students in seven states this year, including Sabah and Sarawak. The programme is carried out in schools in collaboration with our seven corporate partners, 10 Rotary Clubs, one university and teachers in 23 participating schools. Almost 140 volunteers, who are employees of our corporate partners and Rotary Club members or university students as well as over 50 teachers, facilitate the lessons based on the Money & Me manual designed by TEEF.

“Save”, “Spend”, “Earn”, “Grow” and “Give” are the five modules in Money & Me. We believe that it is important to not just equip young people with the skills to make sound financial decisions but also to give back to society — something that The Edge Billion Ringgit Club members do consistently.

Sales Day, which is when students implement their business plans and sell their products, usually in school, has netted over RM96,000 between 2016 and 2019. Money & Me took a break in 2020 because of the Covid-19 pandemic and there was no Sales Day in 2021 or last year although students were required to produce business plans as part of the “Money & Me Young Entrepreneurs Challenge”.

Since 2016, students taking part in Money & Me have donated just over a fifth of their total Sales Day earnings, amounting to almost RM20,000, to charity, the community or their schools’ Parent-Teacher Association to benefit their school or schoolmates in need.

TEEF’s other financial literacy programme, Cekap Duit: Cakap Tentang Duit, was the product of collaboration between the foundation and local NGO Malaysian CARE. Based on Money & Me, it is designed for audiences that may be less literate or not in school. It was launched by CARE in 2017 at Sekolah Integriti Kajang (SIK), a school in Kajang Prison for those aged 18 to 25. SIK moved to a new location in 2018 and became known as Pusat Koreksional Puncak Alam (PKPA).

Apart from PKPA, Cekap Duit has been run at SOLS Academy of Innovation and by Purple Lily, an NGO in Sarawak. Tamarai Pulau Pinang, a Penang-based NGO, is currently running the programme for a group of B40 youth and students.

Recently, a team from OCBC Bank (M) Bhd’s Wholesale Banking Division led by relationship manager Leon Wee partnered with TEEF and Pertubuhan Perkhidmatan Sosial dan Pembangunan Komuniti Daerah Gombak (PSPK) to run the programme for about 30 children and teenagers aged 11 to 17. PSPK is a community-based NGO in Kuala Lumpur that seeks to facilitate development for underprivileged women and children.

The OCBC team conducted two of the 10 Cekap Duit lessons, with PSPK staff conducting the rest. Wee said that it was the first time that the department had run a financial literacy programme for youth, although individual staff had previously volunteered with Bank Negara Malaysia’s Financial Industry Collective Outreach.

Fourteen-year-old Livenesh Gopinathan, who participated in the programme, said: “I enjoyed coming for every class. If possible, I would like to keep coming to learn. I have never heard this taught anywhere before. At every class, I learnt new things. After this, I can help my mother go to the bank and I also understand how to manage money. I have started saving after coming to this class.”

“The kids’ eagerness to learn more is a testament to the module’s success in imparting crucial financial literacy concepts,” said PSPK assistant executive director Keerthana R.

It is TEEF’s hope that more young people will have an opportunity to learn these concepts and put them into practice.

Dorothy Teoh is CEO of The Edge Education Foundation and a judge for The Edge BRC Corporate Responsibility Awards

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