Will financial literacy work on us?

Financial literacy classes haven’t really done much to improve people’s financial behavior,” wrote lawyer Dodo Dulay in his New Year’s Day column in The Manila Times.

Sounds bleak, doesn’t it, especially in light of the recent slew of investment scams victimizing millions of Filipinos. But this assertion is persuasive, as it is backed by a number of compelling scientific studies showing the dismal impact of money management classes on people’s behavior. Dulay’s article is worth reflecting on, especially among financial literacy program designers and teachers.

The Department of Education has recently rolled out a financial education program for public school students and personnel. This makes us ask: Will a money education course help Filipinos, or will it just waste everyone’s time and resources?

It’s easy to see the advantages of such a program. At the very least, it introduces young Filipinos to the essentials of personal finance such as saving, budgeting, investing, managing debt and avoiding scams. These money management lessons were sorely lacking in older curriculums; any millennial (myself included) would tell you that they wish they’d learned these lessons at school. Now that financial education is incorporated in formal education, there is hope for a generation that is at least more learned in making responsible financial decisions.

However, improving Filipinos’ financial behavior shouldn’t just stop at school programs. Financial education for adults proves to be a more immediate need, considering the hordes of adults who are still blindly putting their hard-earned money in questionable schemes. Add to that the many Filipino families who are mired in debt and are regrettably digging themselves into deeper economic pits.

It may be true that the government is not responsible for how adult Filipinos handle their personal finances. But Filipino financial literacy is way past being a personal matter today—it’s a national concern, just as poverty and quality of life are national concerns.

Alongside money management classes in schools, financial education is needed for Filipino workers and even homemakers.

One key to making financial education work for Filipinos is to communicate it effectively instead of merely instructing on it. It should be an engaging, audience-specific approach instead of a one-way deluge of ideas.

Effective communication entails knowing the audience and adapting the message to suit that audience. The subject of finance is riddled with jargon and complex concepts that may scare away or lose the attention of learners. It is a challenge for financial literacy program managers to reach out to Filipinos in a language we understand. The accessible vernacular can also foster engagement, allowing learners to ask questions or consult about their specific concerns without feeling inadequate in their expression.

Further, effective financial education takes into account the values upheld by learners. Do Filipinos value retirement savings as much as we prioritize day-to-day survival? Do we pay attention to economic news as much as we do to our religious leaders? Program managers and teachers must look into what Filipinos consider important, and what they allow to influence their money management behaviors.

Finally, it may be well worth it to promote financial literacy into the mainstream using social marketing methods. Social marketing (not to be confused with social media marketing) is the application of commercial marketing techniques to encourage a positive change in behavior among people. Instead of selling a product, it “sells” an ideal behavior.

It is how organizations and government entities have successfully campaigned for behaviors such as recycling, antismoking, HIV/AIDS testing and many others. A similar social marketing push could be key in making responsible financial management a new norm among Filipinos.

With these, I continue to be a little more optimistic about Filipino financial literacy. While it’s easy to say Filipinos are dumb and unteachable when it comes to money, we have to proactively resist that. Of course, we definitely still have a thing or two to learn—

whether we’re students, teachers, farmers, laborers or homemakers. But the fact that we’re starving for education is exactly why financial literacy must be improved and expanded in the Philippine context.

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