Research shows that fresh graduates demonstrate a worrying attitude towards money and spending. Money $ense — Getting Smart With Your Money, a book which offers practical financial tips, hopes to redress the situation, writes SUZIEANA UDA NAGU

CINDY Liew (not her real name), a local fresh graduate, was jubilant when she was offered a job as a marketing executive with an advertising firm just months after her graduation.

With a starting salary of RM2,000, Liew is certain that she is well on the way to financial freedom.

“My pay is not much but at least now I can buy fashion items which I couldn't afford as a student, yet have enough to save for the down payment on my first car,” says Liew.

In a few years, the 23-year-old hopes to buy her own apartment. She even fantasises about an early retirement.
Liew’s dream of “the good life” is shared by many graduates at the start of their careers.

A focus group study conducted by the Credit Counselling and Debt Management Agency (or its Malay acronym AKPK) revealed that young working people yearn for financial freedom.

AKPK is a government agency set up by Bank Negara Malaysia two years ago to provide an avenue for individual and potential borrowers to seek advice and assistance in managing their finances.

The agency also promotes sound banking system by facilitating debt repayment efforts and minimising incidences of non-payments arising from poor debt management.

Some 60 per cent of the 52,000 Malaysians who had received free credit counselling and debt management assistance from AKPK since its inception were below 40 years.

They blamed poor money management skills for their financial woes.

AKPK Chief Executive Officer Mohamed Akwal Sultan says that many of those who sought help from AKPK began experiencing money problems in their 30s.

“They were generally not in control of their finances. Things got worse after they made big commitments such as getting married and buying their first car or house,” he adds.

On top of that, many of them made classic mistakes such as spending beyond their means.

The 80 fresh graduates who make up the focus group demonstrated a worrying attitude towards money and spending.

Although the participants dreamed of a debt-free life, they were not fully aware of the discipline such a lifestyle demands.

It was against this backdrop of findings and actual cases of financially distressed individuals that AKPK decided to conceptualise, develop and publish Money $ense — Getting Smart With Your Money.

Targeted at young adults and undergraduates, Money $ense is a 138-page book which offers easy-to-follow advice on avoiding financial pitfalls.

Written in simple English, it aims to impart knowledge on how to wisely manage finances to young people.

“It explains the various steps they should take to achieve their financial ambitions. There are plenty of useful tips for managing money and planning for the future,” says Mohamed Akwal.

The book underlines the importance of being in control of an individual’s finances.

In essence, Money $ense is about helping young people “make sense” of their ringgit.

Fresh graduates interviewed by AKPK believe that their lack of early exposure to a structured financial literacy programme has made them poor managers of their personal finances.

They recommend that such schemes be introduced to university students before they graduate.

AKPK applauds the recent move made by 11 public universities to incorporate Money $ense into Asas Pembudayaan Keusahawanan, an entrepreneurship course taught at these institutions since last month.

The course — which is compulsory for first-year students pursuing first degrees during the 2007/2008 academic year — contains four modules aimed at encouraging undergraduates to step outside of their comfort zones to become entrepreneurs and wealth creators.

Before they venture into entrepreneurship, graduates must first have the competence to handle their own budget, says Higher Education Minister Datuk Seri Mohamed Khaled Nordin.

“A personal finance management module and the publication of guides such as Money $ense are in line with the agenda of improving graduate employability," adds Mohamed Khaled at the launch of Money $ense recently.

At the event, Mohamed Khaled presented representatives from 11 public universities with copies of the book. Each institution will receive 3,000 free copies.

Money $ense is also available in pdf format which can be downloaded from AKPK's website (http://www.akpk.org.my/).

AKPK and the Higher Education Ministry urge more public and private tertiary institutions to introduce personal financial management courses.

“In the long-run, it is hoped that the module will lead to increased financial literacy and understanding among Malaysians. A financially literate society augurs well for the sustainability of the economy,” says Mohamed Khaled.

Personal finance experts agree that equipping students with the skills to handle financial responsibilities during their studies — such as managing their study loans or scholarship — is critical.

With sound financial knowledge, young adults such as Liew will be more than likely to make informed decisions pertaining to their money instead of allowing their emotions, trends or lifestyle to cloud their judgment.