Education key to preventing financial mismanagement

SINGAPORE - While it was distressing to read about the widow's story ("$1m gone in a year: Widow is now broke"; Sunday and "Disbelief and anger over 'squandered' donations"; Tuesday), it is hardly surprising.

Working in the financial services industry, FinCare has come across people who come into "sudden wealth" (either through insurance payouts and/or inheritance). As part of community work, we have also counselled many who have mismanaged monies entrusted to them or money they borrowed.

The ability to handle finances has a lot less to do with age than with "financial intelligence". We have counselled those in their 60s and 70s who are deep in debt; we have also met teenagers who are financially very savvy.

The best way to avoid or correct financial mismanagement is financial literacy/education and counselling.

Singaporeans are a compassionate lot easily moved by publicised plights of those in need. A process should be put in place to "steward" donations that may result from such publicity.

This may include setting up a structure to receive and administer resources, the appointment of financial advisers and most importantly, some level of financial education and financial or psychological counselling.

I hope this episode will not dampen the generous spirit of Singaporeans but be an opportunity to learn the best way to help those truly in need.

Bernard Lim Hup Seng

Head Financial Counselling, Aid and Resilience Education (FinCare)

This article was first published on June 12, 2014.
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