KUALA LUMPUR, Nov 26 ― Any effort to educate Generation Y on financial literacy must have the direct involvement of their parents, who remain the key sources of financial advice for the country's youths, the Asian Institute of Finance (AIF) said today.
Citing their study titled Finance Matters: Understanding Gen Y ― Bridging the Knowledge Gap of Malaysia’s Millennials published last month, AIF director of strategy, policy development and research Dr Wan Nursofiza Wan Azmi said 65 per cent of the 1,011 respondents listed their family, friends or co-workers as their main source of financial information.
“The flip side of this is that they may not get the best or most updated advice. Probably the best way to get to the Gen Y is to reach out to their parents,” she said during a panel session at a conference on strengthening financial resilience of Malaysian consumers here.
“It's good to start (financial literacy) from young but it must also start from home. Getting parents involved is important,” she added.
Wan Nursofiza stressed that Gen Y consumers suffer from a trend of impulse buying, with 75 per cent of respondents in the study ― who are aged between 20 and 33 years ― admitting to having taken on one or more long-term debts.
Top of the list of long-term debts is car loans, which accounts for 56 per cent of the respondents, followed by personal loans (47 per cent), education loans (40 per cent) and mortgages (28 per cent).
Another 38 per cent said they also have short-term debt in the form of credit card loans.
Wan Nursofiza said it is a worrying situation as youths would end up heavily in debt just to keep up with prevailing trends, such as excessive spending to host grand weddings at five-star hotels.
“But you can't really blame the Gen Y because the parents have a role to play and the education system as well. They are brought up to think that you do well and you get something, and when you don't do well you get scolded and don't get anything.
“So when they start working, every time they are commended by the boss or they accomplish something they go out on impulse to reward themselves because nobody else is going to reward them,” she said.
Wan Nursofiza noted that despite just 28 per cent of respondents to their study saying they were confident in their financial literacy, only 37 per cent sought professional financial advice.
The majority who did not, meanwhile, said they could source for the information themselves through the Internet, felt it was too expensive to engage a financial advisor or were simply not interested.
Wan Nursofiza said the findings reinforce the view that parents need to get on board to help the Gen Y and future generations get their finances in order.
“The first source of information is the parents, and a good and comprehensive system will always involve parents.
“At the end of the day, when they (children) learn something in school they will ask their parents, so parents need to be informed of these things,” she said.
