Poly, ITE students to be taught financial literacy

From next year, Year 1 students will take up mandatory module, which won't be graded

Visitors at the MoneySense roadshow at Our Tampines Hub yesterday. The new initiatives announced at the roadshow are part of government efforts to boost financial literacy among Singaporeans. Government agencies will also enhance their services to he
Visitors at the MoneySense roadshow at Our Tampines Hub yesterday. The new initiatives announced at the roadshow are part of government efforts to boost financial literacy among Singaporeans. Government agencies will also enhance their services to help Singaporeans better understand their financial options when making important decisions.ST PHOTO: LIM YAOHUI
Education Minister Ong Ye Kung speaking at the MoneySense roadshow at Our Tampines Hub on Nov 17, 2018.
Education Minister Ong Ye Kung speaking at the MoneySense roadshow at Our Tampines Hub on Nov 17, 2018.ST PHOTO: LIM YAOHUI

All Year 1 polytechnic and Institute of Technical Education (ITE) students will be taught financial literacy from next year.

The mandatory module, which will not be graded, will teach them budgeting, goal-setting and financial basics such as the effect of compound interest on debt and savings.

More modules will be piloted with some Year 2 and 3 students over the next few years, to help them become more savvy consumers and learn how to use insurance, investments, and national schemes such as the Central Provident Fund.

This was among the new initiatives announced at a roadshow yesterday by MoneySense, the national financial education programme, as part of government efforts to boost financial literacy among Singaporeans and help them manage their money well.

An online financial health check tool for all Singaporeans and permanent residents was also launched at the roadshow at Our Tampines Hub, which will run until today before moving to the HDB Hub in Toa Payoh on Dec 8 and 9.

The questionnaire, which is available on the MoneySense website, helps users assess progress in areas like money management, insurance, investment, retirement and estate planning, and gives recommendations to address the gaps identified.

Government agencies will also enhance their services to help Singaporeans better understand their financial options when making important decisions such as buying a flat and preparing for retirement.

MATTER OF INTEREST

Do you know how long it will take to double your money at an annual interest rate of, say, 2 per cent per year? Five years? Ten years? It will actually take 36 years. How about at an annual interest rate of 4 per cent? That would take you about 18 years. So this is the "rule of 72". Divide 72 by the annual interest rate, and that is the number of years to double your money.

EDUCATION MINISTER ONG YE KUNG, speaking at the launch of MoneySense initiatives at the roadshow yesterday.

DO YOUR SUMS

When you receive your credit card bill, there is always a minimum sum you must pay. That is not the recommended sum to pay. If you pay only the minimum sum every month, it takes you a long time to pay off your bill. If you receive a $5,000 credit card bill - and every month you pay only the minimum sum - how long do you think you will need to pay off the bill? 15 years!

MR ONG, on credit card bill payments.

These moves follow a survey commissioned by the MoneySense Council last year which found that half of working adults here aged between 17 and 29 had not started planning for their future financial needs.

The Nielsen survey of about 2,800 Singapore residents aged between 17 and 75 found that they generally had good money habits, with about two in three saving regularly, but had difficulty planning ahead.

Launched in 2003, MoneySense runs campaigns, talks and workshops on financial education, and is overseen by the MoneySense Council co-chaired by the Monetary Authority of Singapore and Manpower Ministry.

Singaporeans "generally understand what it takes to be financially healthy, but may not translate knowledge into action", said a MoneySense Council spokesman.

Education Minister Ong Ye Kung said at the launch that the roll-out of the new curriculum follows a successful pilot project involving 7,000 polytechnic and ITE students earlier this year. "They learnt how to budget and review their expenses, save towards their goals, and discovered their personal spending habits... This helps to better prepare them to manage their own money when they grow up later," he said.

The Ministry of Education said in response to queries that the polytechnics and ITE will jointly develop the modules, and have the flexibility to decide how to incorporate them into their existing programmes.

From next year, the first module will also be made available to all pre-university students through the Singapore Student Learning Space portal, a spokesman said.

Singapore Polytechnic student How Shi Yun, 17, who completed the pilot module last month, said it helped her to create a savings plan.

Ms How, a first-year student in the Food Science and Technology programme, now sets aside money she earns from her part-time job manning a food cart and limits her spending to her $200 a month allowance.

"The module was quite useful as previously I would save some money but wasn't sure how much I was spending and how much I should be putting away. Now, I know how to save the money I earn and when I look at my bank balance going up, I feel happy," she said.

A version of this article appeared in the print edition of The Sunday Times on November 18, 2018, with the headline 'Poly, ITE students to be taught financial literacy'. Subscribe