For financial education free from technical jargon

Published: 17/3/2016
For financial education free from technical jargon

On 17 March 2016, Jutarnji list organised a panel discussion on "Promoting financial literacy: policies and measures to increase the level of financial literacy in Croatia" on the occasion of marking the European Money Week and introducing the new section "Financial Lexicon for Everyone" of the Jutarnji list daily newspaper.  Vicegovernor of the Croatian National Bank Bojan Fras participated in the discussion together with the representatives of the Croatian Financial Services Supervisory Agency (HANFA), the Ministry of Science, Education and Sports and the Ministry of Finance.

In her introductory speech, Marijana Ivanov, Ph.D., professor at the Department of Personal Finance of the Faculty of Economics and Business in Zagreb, presented the data on the situation with financial literacy today and gave the reasons for this situation. She pointed out that financial education should not give rise to unrealistic expectations.

The measuring of financial literacy, which was conducted by HANFA and the CNB, showed that the average financial literacy score of Croatian citizens stood at 11.7 points, of the maximum 21, the lowest scoring group was the age group below 19 years of age, those with lower education levels and those living in smaller towns.

Silvana Božić, Member of the HANFA Board, emphasised the need to define the approach to different target groups in introducing the topics of financial education as well as the channels to approach them. Kristina Horvat of the Ministry of Finance stressed the importance of cooperation between the private and public sectors to achieve the objectives of the National Strategic Framework for Consumer Financial Literacy for the period 2015 - 2020. Young people lack interest in pension funds, and interest in making pension plans begins only after the age of 40, said Petar Vlaić, President of the Mandatory Pension Fund Erste Plavi. Darko Tot of the Ministry of Science, Education and Sports spoke about the importance of including financial education in the curriculum, as well as about developing an active role of students to be able to question the information they receive.

It is important to educate both the young people and their parents, said Marijana Ivanov. However, it is easier to conduct lifelong learning programmes in larger towns, she said, while the survey shows that they are necessary precisely for those living in smaller communities.

Vicegovernor Bojan Fras pointed out the CNB's role in the implementation of financial education of the youth population. As the CNB recognised the importance of youth education a long time ago, he said, for the past fifteen years it has organised high school and university students' visits to the CNB. He mentioned that more than 500 high school students visited the CNB during this year's Money Week only. 

The example of the student debate held at the CNB yesterday, in which students expressed their distrust with regard to banks, shows that young people have their attitudes about money and financial services, although these attitudes do not result from their own user experience or from financial education. Therefore, the Vicegovernor commended the idea of publishing the Financial Lexicon, but he also suggested to the editors to give the texts for review to the people for whom the content is intended before publishing them because only clear and comprehensive explanations of the otherwise complex issues of personal finance, free from technical jargon, may give the desired effects of financial education. 

The knowledge of personal finance, Fras concluded, is not enough. It is important that young people also learn the basic terminology of public finance and know what the budget, deficit or public debt are, before they can influence social developments by exercising their voting right.