Why do so many Singaporeans struggle with financial matters

Think back to when you were a child. Do you remember how your mother would always say that back in her time she never took so much lunch money? And then your grandmother chimed in to say that back in her time, S$1 would last her a month. In fact, if you ask your friends and relatives, they would all have similar stories to share.

With Singapore slowly moving towards a cashless economy as part of the Smart Nation initiative, relying on your parents for financial knowledge isn't always possible.

This is just one of the reasons that many Singaporeans today are struggling when it comes to finance. In fact, a Mastercard survey conducted placed Singapore in the second position when it came to financial literacy amongst Asia Pacific countries. So, why do so many Singaporeans struggle with financial matters? Let's find out.

Absence of Financial Education

A majority of your learning comes in the form of formal education that you receive in school and college. And while you may be able to solve complex trigonometry problems, there is still a gap when it comes to financial literacy.

Schools expect children to learn financial literacy at home and vice versa. As a result, even today, in a world filled with credit cards, payment wallets, and cryptocurrencies, Singapore has people who do not know how the stock market functions, and university students who struggle to understand the concept of inflation.

This isn't to say that the Ministry of Education's curriculum isn't robust. It is. But as a society, emphasis needs to be placed on financial literacy being learned both in and out of schools.

Learning From Your Elders

As mentioned earlier, you always learn from your elders. Your grandmother taught you how to prepare the best soup with her secret ingredient, your mother taught you how to handle stressful emotional situations, and your father taught you how to ride a cycle and later on in life, he taught you how to drive. But with a world that has changed so much, whom do you learn from?

In fact, your parents are quite possibly looking to you to help them understand plastic money. So, how do you plan your finances and understand the importance of saving or the emotional pain of money physically leaving your hands when all your transactions are made with a credit or debit card or via a payment wallet? This is especially concerning since not understanding the importance of saving beyond just your CPF may lead to other financial difficulties in life.

It comes as no surprise then that many Singaporeans are struggling when it comes to trying to understand where to invest their money and how to make the most of their income without spiralling into debt.

Giving Today's Happiness More Importance than Tomorrow's Needs

There is no denying the fact that we live in a world that is driven by rampant consumerism. Moreover, with plastic money and the advances in technology, everything we want is available at our fingertips. You order for something in the morning and by the evening it is at your doorstep.

This instant gratification is what drives people to buy things they probably don't need. What this also leads to is more and more people not saving for tomorrow. It isn't that they don't understand the importance of saving, but the need to have the latest gadgets and the need to portray a certain lifestyle on social media drive people to make decisions that ultimately lead them to spend more.

As a result, you probably are in a situation where you don't know where your money is going and don't have a budget. Or if you do have a budget, you aren't able to stick to it.

What all of this culminates in is Singaporeans struggling with financial matters. The fact is, we live in a very different world today. One that is constantly changing. On a daily basis, you are faced with issues like inflation and global recession that have a direct impact on your finances. And not taking the time to build your financial literacy only leads to more struggle when it comes to financial matters.

The good news is that there are ways to ensure that you improve your financial knowledge. You can always read up about concepts you don't understand on the internet or even take a financial course online. Once you have a basic understanding of these concepts, then you can always go to your financial advisor and ask them for help with your investments. And since you know what they are talking about, you will be more confident in your financial decisions.