“I’m 50 years old and I know I have not always made the best financial decisions. I have a lot of credit card debt and recently lost some money that wasn’t even mine in an alternative investment scheme.

“Now that I’m approaching retirement I realise that I’m in serious trouble, but I really don’t know how to do any better. Is it possible to learn how to manage my money properly?”

Congratulations on your honesty in admitting that you have not been the best steward of your money. However, you shouldn’t feel too discouraged, as most people make money mistakes throughout their lifetime.

Your story is quite familiar to me. For many years I, too, was guilty of making poor financial decisions. In fact, I was probably worse off than you, because I was clueless about the extent of my money problems.

I was fortunate to become employed to a leading financial institution, where for the first time I encountered persons who were money-savvy. I then began a journey to learn what other people knew about moneymaking that I was definitely unaware of.

The secret to financial success

I discovered that financial success could be obtained by knowing how to manage your money to live within your means, how to multiply money to create wealth, and how to maintain your money to enjoy it and pass it on to future generations. The reality is that anyone who learns and applies these basic principles of money will eventually become financially successful.

So if all it takes to win the money game is to follow some simple rules, why are so many people financial losers?

As you pointed out, you know that you are doing something wrong, but you don’t know what the right way is. That’s because no one taught you what to do with your money. In school we learn reading, writing and arithmetic; we get educated towards acquiring a job to earn money; but nowhere in that mix does anyone teach us money skills.

The lack of money knowledge can have devastating consequences on our lives. Not knowing how to do a proper budget leads to an inability to meet everyday expenses.

Careless credit card usage leads to snowballing debt. Lack of a dedicated savings habit leads to unfulfilled financial dreams. Ignorance of investing risks leads to money loss and regretful tears. Jamaica cannot succeed financially as a nation if its citizens are bad money managers.

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Promoting financial literacy

To counteract this unfortunate state of affairs, we all need to become financially literate. Financial literacy is defined as the ability of individuals to make appropriate money decisions by learning the principles that relate to the management, growth and preservation of their money.

In order to achieve a dramatic change in the financial well-being of our country, I believe that we need a national programme to correct our unhealthy financial practices. With the unprecedented financial challenges being faced in Jamaica today, it is even more urgent for a programme promoting financial literacy to be introduced.

The call for financial literacy training is being answered in other parts of the world. Governmental agencies in the United States, the Philippines, Japan, Britain, and Australia are focusing on raising the level of their citizens’ financial literacy. These countries are aware that the financial health of their nation is heavily dependent on the financial development of their people.

Here in the Caribbean, Trinidad and Tobago started its own national financial literacy programme (NFLP) in 2007. The programme was established by the Central Bank of Trinidad and Tobago with the major objective to provide citizens with the knowledge and skills to enable them to make informed financial decisions. The programme utilises workplace ‘lunch and learn’ sessions, financial education classes in schools, and the media to disseminate information.

Speaking at the official launch of the NFLP, Ewart Williams, governor of the Central Bank of Trinidad and Tobago, explained “when we launched this programme we emphasised that financial literacy should be the business of the entire society and sought the support of all those who were in a position to help. We even suggested that some individuals with financial skills should see the financial literacy programme as a way of giving back to society.”

Towards financial education in Jamaica

After my conversion to becoming money-smart, I became convinced that every person could live a more financially rewarding life if they were taught what to do. It is my personal objective to educate persons to empower themselves to become enriched. To achieve maximum impact, however, financial literacy training must have a national focus.

In the meantime, what can you personally do to promote financial literacy?

– Get books, listen to TV programmes, and surf the Internet for financial information;

– Ask your employers to sponsor financial wellness sessions in the workplace;

– Teach your children good financial habits and lead by example.

Copyright © 2009 Cherryl Hanson Simpson. No reproduction without written consent.

Originally published in The Daily Observer, March 5, 2009

Cherryl is a financial consultant and coach, founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallyfreenetwork.com and www.financiallysmartonline.com. Contact Cherryl