Financial literacy matters – The National
THE culture of saving is something many Papua New Guineans struggle to master.
That’s the message from the man PNG loves to follow in the national rugby league, Melbourne Storm center Justin Olam.
Olam, as a brand ambassador for the National Superannuation Fund (Nasfund), sees the need to promote this savings concept.
Nasfund Chief Executive Ian Tarutia thanked Olam for using his time and position as a brand ambassador to help the fund promote a culture of saving through retirement.
Currently, 850,000 or 9.4% of Papua New Guineans contribute towards their retirement; this means that more than 90% of our employees do not take advantage of this benefit.
Saving money is not something most Papua New Guineans know how to do. Clearly, PNG struggles in the area of financial literacy.
Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.
The lack of these skills is called financial illiteracy.
The crutch of financial literacy is to build wealth and have a series of income-generating assets, so that if one fails, there are other income-generating assets. .
Financial literacy isn’t really about money power, it’s about having a healthy mind that will help people know how to use money and channel it into work.
With financial literacy and good cash, it allows people to make good decisions, have good homes and a good standard of living, and bring the country back up to the poverty line.
Financial literacy is important because it gives us the knowledge and skills we need to manage money effectively.
Without it, our financial decisions and the actions we take – or don’t take – lack a solid foundation for success.
Almost half of working Papua New Guineans do not expect to have enough money to retire comfortably and that is the reality.
Most households in the country generally seem to be better at handling immediate and short-term financial activities, but are less proficient at handling longer-term financial activities (including activities that require long-term planning) and longer-term financial activities. complex, including those that require engagement with the formal financial system.
According to the World Bank’s 2018 report on the diagnostic of financial consumer protection in Papua New Guinea, a quarter of Papua New Guineans obtain credit from unlicensed lenders.
Although there are no official statistics available, it is estimated that PNG’s unregulated lending industry may range from around 50 to around 280 registered businesses that offer short-term (payday) loans to employees of the government and some private sector employees.
This does not even take into account all the unregistered companies offering the same services.
Financial literacy and financial inclusion are becoming pressing issues in PNG and receiving increased attention.
Improved financial literacy can increase economic participation and social inclusion, boost competition and market efficiency in the financial services sector, and potentially reduce regulatory intervention.
The push for financial inclusiveness is enjoying considerable success, but a better understanding of money and savings is needed.
Saving money is extremely important.
It gives you peace of mind, expands your options for decisions that have a major effect on your quality of life, and eventually gives you the opportunity to retire.
Most people who are wealthy got there through a combination of their own hard work and smart saving and investing decisions and you can become one of those people too.
Only financial education will have a big impact on our community.