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Customer Education Through Financial Education
The customer education process of financial training is, in basic terms, flawed. Encouraging individuals who have reached economic maturity and are already set in their atrocious financial habits is equated to trying to build the world’s first time machine. Fundamentally, attempting to instill foundations that should have been laid during one’s youth will result in individual’s drowning into debt and, ultimately losing everything in the process anyway.
Whether we like it or not, money will continue to be a part of our human existence. Since the invention of currency, people have been trying to figure out how to best make, use and invest their earnings. Traditionally these individuals are classified as adults- normally 18-years and older. But recently, it is children that are being put first in the hope of training them for this age-old struggle. In a nation where close to 60% of its population do not know what the term ‘interest’ truly means, customer education regarding all financial lingo that accompanies personal finances must be equally imparted to the greater society. It is important to note that the single most crucial skill that can make or break one’s financial freedom is not taught in schools. Amazingly, one does graduate with a four-year degree and learn the equivalent of zero about personal finance or investing.
In an effort to save South Africa from being swallowed whole from debt alone, the Financial Services Board and Department of Treasury placed consumer education on the national agenda in 2010 and proposed a National Strategy for Financial Literacy. This called for a joint effort by industry bodies, the private sector and the newly formed National Industry Steering Committee (NISC) to address consumer credit skills relating to budgeting, financial planning, decision-making and understanding the cost and risk of credit.
Financial literacy for kids is fast becoming an indispensable market that lays groundwork for creating a financially savvy youth era. Clearly, children possess a lack of working knowledge of financial concepts and do not have the tools needed to make decisions most advantageous to their economic wellbeing. Due to this prejudice, customer education that is geared towards children, specifically, is scares to none. We at Money Savvy Kids strive to bridge this gap and provide content that is, in leman’s terms, dumbed-down enough for even a four-year-old to understand. Keeping in mind that the customer in this customer education process are children as young as four-years-old whose neuropathways are still developing, is a priority. We, as MSK, take this fact gravely as being at the helm of children’s development is a momentous and delicate process to say the least.
The visible issues of high levels of consumer debt and low saving rates creates a sense of urgency surrounding financial literacy for children. For parents to purely rely on the ‘unshaken fact’ that their children will learn all the invaluable knowledge and skill-set that is to allow them to make informed and effective decisions with their financial resources in their adult life from osmosis alone, just goes to prove that parents are living in a warped reality altogether. Financial literacy cannot be learned by simply reading the trusted 300-page user manual of yesteryear that is seldom fully understood or, if you are a follower of trends, watching a series of online videos in a single day. Achieving financial freedom is an ongoing process that involves every financial decision one makes throughout their lives. Even that first time your child buys sweets with pocket money that they have earned from doing chores around the house.
MSK truly wants to position our youth for success. Providing content that has been formulated to improve consumer behaviour from a young age by enhancing and increasing levels of knowledge, awareness and borrower confidence so that consumers can make more informed decisions when borrowing or applying for credit as adults is what we do. Financial literacy is nothing new. What is new, however, is how MSK imparts content to students. MSK teaches content through ‘teachable moments’ relevant to the specific life-stages of an individual’s life. These ‘teachable moments’ may range from taking out a student loan or buying a home. Consumer education structured around these moments are the most effective method to consumers understanding financial concepts such as credit and investing.
Customer education does not only depend on the ‘consumer’. It is also the responsibility of financial service providers, both public and private, to assist in responsible lending practices that will ultimately empower consumers and aid in economic development. These efforts can have a positive impact on the way people think about and behave towards personal finances. Let MSK help the children of our nation write a finance success story that will have them enjoying a money savvy life.