Wednesday, 23 August 2017

'Invisibility' makes managing money hard for youth

Financial literacy experts say as society goes cashless, the young lose sight of value of money
By Serene Luo, Deputy Schools Editor, The Straits Times, 21 Aug 2017

University education for British citizens used to be free - until the late 1990s when policies changed and students instead took loans to pay for tuition fees.

By 2013, students would graduate with some £45,000 (S$80,000) of debt, as they would have borrowed roughly £9,000 for tuition and £6,000 for room and board each year.

On top of that, said Mrs Marilyn Holness and Dr Nicky Reid, students were being handed cheques as part of their loans every few months - to pay for their rent and bills - but they had not been taught to manage their finances and often found themselves struggling to buy food before their next cheque was to arrive.

The two were behind the Money Doctors national support service for students in Britain, which at its peak reached 200,000 students in more than 100 universities there, teaching them life skills in managing their personal finances.

Both of them are at the University of Roehampton: Mrs Holness is director of student engagement, and Dr Reid is an educational developer at the learning and teaching department.

They were recently in Singapore to conduct workshops for parents and children as part of the RHB Financial Literacy Programme by RHB Bank.

The "invisibility of money to young people" is one main factor exacerbating the problems that young people have with money, they said.

Said Dr Reid: "For Marilyn and me, our parents worked and brought home pay packets - money in little brown envelopes. Money was spoken about in the household. As a child, you knew things had to be paid for (out of this packet). We knew money was finite.

"But now, kids sit in a trolley in the supermarket, and you take whatever you want and pay with a piece of plastic."

Added Mrs Holness: "Also, with ATMs, (as a child) you see people put a card in the wall and out comes money like magic."

They named things such as contactless card payments, or features like Apple Pay on the iPhone, as adding to that invisibility of money.

Singapore, for instance, wants to be a Smart Nation where technology has widespread use, including e-payments and banking transactions.

The downside is that "you don't make a tangible link when you tap that it (money) is coming out of your account", Dr Reid said.

This can lead to the inability to understand what money is worth and, eventually, bad financial habits.

Added Mrs Holness: "Even if you don't change your behaviour, be aware of it. Challenging attitudes towards money is the first step to changing behaviour. If you are not aware of it, you can't change."

For instance, property agent David Ng, 45, said his eldest son, 13, thought of car-hailing services like Grab as "cheap" and that "he could just keep pressing the button (on his cellphone to book a car)".

He had to explain to his son how the services worked, Mr Ng said, adding that "the sooner you get started with (financial education), the better".

Moreover, children are coming into contact with electronic money at an increasingly younger age, Mrs Holness said, which could exacerbate the problem.

Singapore's glitzy retail scene, with an abundance of shopping malls and brands, may create "a whole set of pressures" too, Mrs Holness said.

"How do you go around without spending money?" she said.

"There must be some people who must be walking around and seeing these malls, but knowing they don't have a lot of money.

"But you still have to walk through the mall and see others spending. It's difficult to be in a mall and not want things."

Ultimately, children are "not doing anything wrong" when they think that money is limitless, said Dr Reid, as they have not received proper or adequate education in learning to manage money.

"As parents, we always want to make things better for our children, like giving them everything.

"But as we become more affluent as a society, we are not giving them that life skill," she said.

Experience of handling cash priceless for the young

The POSB Smart Buddy scheme may eliminate the hassle of handling cash for children and parents, but the tactile experience of managing cash is still priceless for the young (Pupils go cashless with smartwatches; Aug 17).

When my son entered Primary 1, what excited him most was having his own pocket money and buying his own food.

He had to make decisions based on the length of the queue and the cost of the food. He then had to count his change to ensure it was correct.

Digital payments would erase these experiences.

How would children learn the value of counting, budgeting, making discerning choices and managing their money if all they do is tap a smartwatch on a machine?

Most importantly, I worry that if children are not exposed to the tactile experience of handling cash, they will have no inkling of where money comes from and believe that money grows in a computer.

This is similar to the phenomenon of children being unaware of the origins of the food they eat - a poll of 1,000 children in Britain showed that 5 per cent believed strawberries grew inside the fridge, a quarter didn't know carrots grew underground, and 78 per cent didn't know broccoli grew on a plant.

Sometimes, age-old traditions are there for a reason.

Nothing can replace the tactile experience of receiving pocket money for the first time, and filling up a piggy bank with coins saved from one's allowance.

Huang Shoon Lheng (Ms)
ST Forum, 21 Aug 2017

POSB programme helps students learn about digital payment

I thank Ms Huang Shoon Lheng for her feedback (Experience of handling cash priceless for the young; Aug 21).

Student participation in the POSB Smart Buddy programme is entirely optional, and requires parents' active involvement.

The programme is meant to provide a digital payment option in schools and students can still pay in cash.

It also gives students the tools to make digital payments in a controlled environment, under parental supervision.

The main aim of the POSB Smart Buddy programme is to help students learn how to save and manage their allowance in an increasingly digital world; daily allowance limits are set by parents to discourage overspending, and the accompanying app helps parents observe how their child spends and saves.

Students can also set different savings goals in the app.

POSB Smart Buddy is designed to be as inclusive as possible and is free for all who use it.

Students on the Financial Assistance Scheme can have subsidies and allowances automatically credited, if they join the programme.

The programme was rigorously tested in schools for over a year, and the product is the result of many parents' feedback.

The programme has also been found to encourage meaningful parent-child conversations on spending and saving.

POSB, as the People's Bank, is committed to its mission of helping to instil the right values in children - whether it be via physical or digital engagements.

Jeremy Soo
Head of Consumer Banking Group (Singapore)
DBS Bank
ST Forum, 25 Aug 2017

Some seniors worry about cashless top-ups at MRT stations
Find ways to help them adapt to new public transport payment methods, say observers
By Shayna Toh and Clara Chong, The Straits Times, 22 Aug 2017

Madam Heng Ah Leh walked to Rochor MRT station and, having memorised the exact buttons she needs to press on the ticketing machine, fed it a $10 note to top up her ez-link card.

But she will soon have to learn a new order of steps when Singapore's public transport system goes cashless.

From next year, passenger service centres at all train stations will no longer do cash top-ups for commuters.

By 2020, all ticketing machines at MRT stations will accept only cashless top-ups such as Nets, and debit and credit cards, said the Land Transport Authority (LTA) earlier this month.

Madam Heng, 75, a part-time hawker, lamented in Mandarin: "I am not highly educated and do not know how to use machines. Not allowing cash top-ups is definitely more troublesome.

"But young people today are very helpful, I might ask the person in front of me to help me top up and repay the person in cash."

Several senior citizens The Straits Times spoke to expressed similar concerns.

Retiree Theresa Choo, 82, said: "I am not confident of using cashless top-up methods but this measure will force us to learn. I am sure there will be people around to ask if we need help."

Figures from LTA show that 69 per cent of Singaporeans use cash as their preferred top-up method, implying that the impact of the new measure will extend to young students and working adults.

Ms Moh Su Jin, 21, a National University of Singapore student, said: "I use cash because it gives me some form of privacy. Our retail landscape does not really support cashless payments as some shops accept only cash. It is hard to navigate this landscape if only certain aspects are cash-free."

Mr Ang Hin Kee, deputy chairman of the Government Parliamentary Committee (GPC) for Transport, said his constituents have had a mixed response to the move to go cashless.

Some cited the additional cost of topping up their ez-link cards at convenience stores, and the lack of a universal card for multiple purposes such as transport, shopping and food.

"We shouldn't stop progress and forget about technological solutions because they (the elderly) won't come on board. Let's find a way to convince them to," he said.

Likewise, Dr Lily Neo, a member of the GPC for Social and Family Development, said some elderly people construct a barrier when tasked to learn new things.

"We will go all out to help and hand-hold them, letting them learn slowly until they realise it can be done," she said.

Acknowledging that many senior citizens and low-income families primarily use cash to make transactions, Mr Ang suggested directly transferring a partial value of rebates or vouchers to travel cards or PAssion cards that can be used for public transport.

Dr Neo suggested introducing a system for children similar to POSB smartwatches, where primary school pupils tap their watches on payment terminals.

She also proposed installing top-up stations at community centres and conducting classes at these centres to teach people how to adapt to the new system.

Ms Normala Manap, a senior associate director at the Centre for Ageing Research and Education at Duke-NUS Medical School, said efforts to engage and educate the elderly must remain a top priority.

"If we don't actively help seniors make this transition, we run the risk of them not getting onto transport and not being involved in society," she said.

National Day Rally 2017: Making Singapore a Smart Nation

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