What Is Financial Literacy And Why Is It Important To Filipinos?

4 min. read By eCompareMo on

Imagine yourself living free from the shackles of financial constraints: you take home a decent paycheck, you go home in a house you own, you have a sizable savings account, and more importantly, you do not have debts to pay off. While a lot of Filipinos may still be miles away from achieving this dream, having financial freedom is something Filipinos can achieve. However, it is possible for only one thing: financial literacy.

Fortunately, it is never too late to learn about financial literacy, and it is still possible to reverse the adverse effects of bad money habits. While financial literacy may require people to learn, unlearn, and relearn a lot of stuff about personal finance, savings, and money management. And there is no more opportune time to learn about financial literacy than today.

What is financial literacy?

Without the technical obfuscation, financial literacy in a nutshell means understanding how money works. By having a good understanding how money flows, affects people and things, and it begets money, you can use these pieces of information to your advantage. Aside from practical knowledge such as computation of interest rates, types of investments, and applicable topics, financial literacy also involves theoretical yet basic knowledge of money and the financial world.

In countries like the United States, United Kingdom, Canada, and Japan, the government, along with other organizations, prioritizes the teaching of financial literacy to people of all age, most especially to young people so they will grow up with a good grasp on financial matters. Unfortunately, this is something that is lacking in the Philippines.

What is Financial Literacy Month?

April marks the celebration of Financial Literacy Month in the United States. During Financial Literacy Month both public and private organizations band together to increase the awareness of the Americans regarding financial literacy. Among the skills taught to the public are the following: debt management, money saving tips, proper money handling, budgeting, and other useful skills that can enrich the financial aspect of their lives. Aside from the United States, Canada also celebrates its own Financial Literacy Month.

Unfortunately, financial literacy is almost obscure here in the Philippines, let alone the celebration of Financial Literacy Month in the country. With the lack of groups spearheading financial literacy campaigns in the country, as well as the lack of the said training in schools, it’s high time that someone takes the lead in helping people learn about financial literacy.

Why is financial literacy important to our lives?

The Philippines is one of the fastest-growing economies in the region today, giving the people the chance to have more financial power than before. However, without the proper financial literacy training, all these will only go to waste if we do not understand how money works and what are the consequences of having bad money habits. So why is financial literacy important especially in an economy that promises growth and stability in the next few years?

1. To be able to provide for themselves and their family

The main reason why people pore over materials on financial literacy is basically to be able to provide more than what they can give out now to themselves and their family. When a person is financially literate, he can maximize his monthly salary and be able to make ends meet without the need get into debt. When a person can comfortably deal with the family’s expenses, then he has achieved a certain level of financial freedom through literacy. (Check out: Financial Strategies by Generation: Phase One)

2. To be able to invest in their future as well as that of their children

Financial literacy isn’t just about solving the money problems of the present. When you’ve learned enough and have already mastered the way you handle your money, you can start investing in something that you can reap in the future. For instance, you know sooner or later that you have to leave your job due to one of the many possible reasons—and you need to be prepared financially regardless of the reasons. Furthermore, you may also want to leave something behind for your children’s future for reasons such as education and others. When you are financially literate, you can do these things and more. (Check out: Set Your Children To The Right Financial Road Early On Through Supplementary Cards)

3. To be able to contribute to the country’s economy

The financial steps calculated by each citizen may free him from the shackles of debt and allow him to manage his personal finances better. However, financial literacy also contributes greatly to the country’s economy, especially if a good majority of the population know how to manage their personal finances. For instance, if people know how to save a bit of their money in banks, then it can have a positive impact on their economy. Not only will you benefit from the wonders of financial literacy.

This month, eCompareMo would like to take advantage of the event as a huge part of the western world celebrates Financial Literacy Month. By helping you understand the ins and outs of financial world, how to deal with debt, and other nifty ways to help you create a sound plan in handling your money, you can achieve financial freedom in no time. Aside from useful information and other guides, eCompareMo.com will also give out tips and tricks to make sure to help you in creating a financially literate Philippines.

There is no better time to start than now, and with financial literacy, it is never too late to become the master of your own money.

What’s your financial literacy score? Find out with this quiz.

About the author

eCompareMo

eCompareMo eCompareMo is the No. 1 financial e-commerce site in the Philippines. Follow us on Twitter and Instagram: @ecomparemo.