Young Workers should plan for Retirement

FINANCIAL WELLNESS: One credit hour module to be introduced at institutions of higher learning

KUALA TERENGGANU: MONEY Sense — Getting Smart With Your Money will be taught as an elective personal financial management course at local universities.

Under the module being promoted by Credit Counselling and Debt Management Agency (AKPK) to local institutions of higher learning, students will earn one credit hour.

AKPK chief executive officer Koid Swee Lian said discussions were being held with local universities to make the module available as an elective course.

So far, 74 institutions of higher learning had agreed to offer the module as a short course.

“Some have embedded the module in their financial courses but we want it to be made available to all students, regardless of the course they are taking.

“This is because it is an important life skill that will stay with them for the rest of their lives,” she told the New Straits Times at the AKPK office here.

The module, she said, had been approved by the Malaysian Qualifications Agency.

“It features, among others, 40 learning hours, 14 teaching hours, study visits, examinations and seminars.”

The module also features four hours of learning the agency’s money and debt management programme, called “Power!”

Koid said it was high time such a course was made available for young people as they made up more than half of the 76,781 people who enrolled into the agency’s debt management programme.

“Some 58 per cent of participants are between 20 and 40 years old. So, we must do all we can to promote financial wellness by empowering our youngsters to be financially savvy.”

She said the public could also enrol in the “Power!” programme conducted at AKPK offices and Bank Negara branches nationwide.

“For example, our Terengganu branch is conducting classes for the programme on Wednesday from 9am to 1pm.

“Anyone can join the programme, which is conducted for free.”

The public, she cautioned, should not ignore their financial problems.

“It will only get worse if it is not taken care of.

“They should come to us as we have a variety of educational services designed to help individuals take control of their finances and gain peace of mind that comes from wise use of credit facilities.”

Serious debt problems facing young workers were due to poor knowledge of financial planning, she said.

“It is very challenging for young workers, especially those in urban areas, to manage their finances, due to the high cost of living.

“Some made the mistake of taking car loans instead of paying off their study loans, while some went into bankruptcy after standing as loan guarantors for their friends.”

Young workers should know how to prioritise their spending and opt not to buy assets when they have just started working.

"Many young workers tend to buy cars and take high financial loans for them. They can save their money by using public transport to go to work, instead," Koid said.

A recent survey by the Education and Research Association for Consumers revealed that 43 per cent of the 1,000 respondents had poor knowledge of financial planning.

The survey showed that young workers in the 24 to 29 age group had serious debts.

"Proper long-term financial planning is very important and young workers should already start saving their money for retirement.

"What's also important is savings between now and retirement, which is why I advise them to have an emergency fund worth six months' of their salary."

Koid added that many young workers tend to be impulsive when spending money because they grew up in a consumer-driven society.

"Some young workers can be pressured by the materialistic gains of their peers and they tend to spend beyond their means."

She also advised young workers against applying for credit cards and change their attitude towards money in order to escape from falling in to the trap of poor financial management.

"People should start jotting down their expenses so they know exactly how much they have spent.

"It is a way to train yourself from spending excessively," she said. Additional reporting by Rachel Rigi