The banking sector continues to invest in new financial education initiatives because the demand remains high and knowledge is low
19 December 2023 - 9 min Reading time
Now that education is in full swing again, and students are once more immersed in math and language, it's a good moment to pause and consider another essential competency, namely financial literacy. Previous research by Febelfin highlighted the lack of financial knowledge among youngsters aged 16 to 30, but there is also room for improvement among the rest of the population. How is the financial literacy of youngsters regarding financial matters today? What are the specific needs, and how can we help youngsters and the general public enhance their financial skills? In the meantime, the banking sector continues to develop new educational materials to explain the financial world in a clear and transparent manner.
With 6 out of 10, we are not the top of the class
Overall, Belgians rate their financial knowledge at 6.8/10 when asked about it. They give themselves good scores for tasks like managing daily financial administration, digital banking, and contactless payments. However, when it comes to subjects like borrowing, investing, pension savings, or cryptocurrencies, their scores drop significantly.
Youngsters assess their financial knowledge lower, giving themselves a rating of 6.4/10, and they are eager to learn more about financial matters, preferably through familiar channels. TikTok, influencers, and ChatGPT also make the list.
This is the result of a study conducted by research agency Indiville on behalf of Febelfin.
This research highlights once again that Belgians, especially youngsters, are in need of objective and straightforward information on financial matters, emphasizing the importance of financial education. Basic financial knowledge is essential for managing your money effectively and building your wealth, especially in uncertain economic times.
In this context, Febelfin is once again launching various initiatives this year to enhance the skills of youngsters and aims to be a reliable partner in the collective responsibility associated with financial education.
Nationale enquête van Febelfin in samenwerking met het onderzoeksbureau Indiville uitgevoerdbij 2.114 Belgen van 16 tot 79 jaar, van wie 761 tussen 16 en 30 jaar oud (maart 2023).
Young generations lack basic knowledge
Over the past 3 years, the scores for assessing financial knowledge have remained unchanged, both for youngsters and the general public.
We believe that we have sufficient knowledge about everyday matters (standing on our own feet, digital banking, contactless payments, and monitoring daily financial administration). Knowledge is lowest when it comes to cryptocurrencies and investments, followed by borrowing and pension savings.
This also applies to youngsters (aged 16-30). However, many youngsters still lack basic knowledge about budget management, daily financial administration, and how to stand on their own, despite some minor improvements.
Not particularly interested
As for engagement, unfortunately, only 50% of Belgians feel engaged in their financial matters. What's even more striking is that this percentage drops to 35% among youngsters under 30.
Behind this notion of engagement, there are different realities: knowledge of financial matters, the feelings it evokes, and the evaluation of one's money management:
- 79% of Belgians believe they are well-informed about their financial situation. However, among youngsters, this percentage drops to 68%, which is lower than the percentage observed in the 31 to 79-year-old group, namely 83%.
- Managing personal finances is seen as a burden by many Belgians. On average, 42% of Belgians have an aversion to handling their financial matters themselves, and this aversion is even stronger among youngsters (54%).
- 86% of Belgians - and 80% of youngsters - believe they manage their money well (while they may not be doing as well as they think in reality).
50% of the youth do not sleep well due to financial worries
Regarding financial concerns, youngsters report that they worry more about their financial situation than the rest of the population. Nearly half (49%) say they lose sleep at times, compared to 37% of those aged 31-79.
It is known that there is a significant correlation between the level of financial knowledge, engagement, and financial issues: individuals who are less informed about their financial matters are less likely to be engaged in managing their finances and are more likely to face financial problems. It is therefore essential to strengthen the financial knowledge of youngsters through actions and information aimed at improving their knowledge and skills.
Need for reliable information channels
Belgians are particularly interested in information about investing and online security, followed by advice on sustainability. As for youngsters, they are interested in information about investing (38%), saving (29%), loans (29%), and strategies for managing their financial independence.
Youngsters are increasingly expressing their desire for information to deepen their financial skills. They expect the financial sector to provide them with general financial knowledge but also look to other stakeholders such as the government. They expect these stakeholders to provide information about pensions (such as pension savings), online security, and sustainable living. Youngsters also rely on information they receive through school, the media, and their parents to educate them about general financial matters and the daily management of their finances.
However, there is often a lack of the necessary supply in this regard. Financial matters are still not discussed enough at home and in schools. Therefore, youngsters are seeking information through new channels: social platforms like TikTok, ChatGPT, public figures, and even finfluencers. Youngster also want information to reach them through social and online media, search engines, and podcasts.
While these new media can offer advantages, they also bring risks, as youngsters may access inaccurate or unreliable information. Think of the many investment scams in which so-called "finfluencers" offer training to get rich quickly
School presentations and additional educational material are a success
Febelfin has been making significant efforts for some time to create educational material and launch new initiatives aimed at providing maximum support to youngsters in the field of financial education.
In collaboration with Kamal Kharmach, a TV presenter, teacher of business economics at Karel de Grote University College, stand-up comedian, and fascinated by everything related to economics, Febelfin has developed a school presentation called "Economedy." With the support of Febelfin, Kamal created this presentation to introduce youngsters to how the economy and the financial sector work and to demonstrate that this subject is exciting, fun, and relatable. And it has been successful. It is expected that by March 2024, we will have reached 15,000 students. Additional presentations will be scheduled, as new requests for shows and accompanying educational materials are received daily.
In collaboration with Kamal and ED TV, Febelfin has developed "kabinEDjes" as an extension of the school presentations. This is new educational material in which Kamal explains banking and economic concepts in a simple manner. The first "kabinEDjes" cover topics like interest rates, inflation, and what happens to your savings. The format consists of a video with a situation that is recognizable to youngsters, followed by questions and answers by Kamal. Educational lesson plans for teachers that can be used in the classroom have also been developed. All this material can be found on the ED TV platform and on the Febelfin website.
Febelfin has also developed educational material about bitcoins and money mules some time ago. This material, consisting of lesson plans and a 3-part soap opera, will now also be offered in French. Febelfin is collaborating with teacher platforms Enseignons.be and KlasCement to promote this offering.
In the coming months and weeks, new initiatives will be taken to increase awareness of online security among youngsters. The theme of "money mules" will be brought into the spotlight again, and youngsters will be able to test their knowledge of online fraud in the Hacker Hotline, a new mobile escape game by Febelfin.
Financial education, a shared responsibility
Having basic financial knowledge is essential, and it is important that our youngsters have access to the right resources to strengthen their financial education. Improving financial skills is a collective responsibility. In addition to the financial sector, governments and all other relevant stakeholders can play an important role in this. The importance of education cannot be emphasized enough. Financial education should be an integral part of the educational path of youngsters. Febelfin once again asks for sufficient attention to be paid to this. Febelfin wants to support both youngsters and the world of education by providing them with appropriate tools. Objective information about financial matters is carefully developed and adapted to the youth environment, with one goal: to help young, resilient, and financially literate individuals make better financial decisions in the future.
