Oct 20th, 2006
A failure of the Singapore education system
Email This Post
Print This Post
I think that the main purpose of education is to impart knowledge and comprehension ability so that human beings will be able to understand what goes on around them and subsequently, be able to make informed decisions by themselves.
Being a product of the Singapore education system, I would say that the system is truly one of the best in terms of producing people who can ace examinations. Unfortunately, the system fails spectacularly in preparing one to make informed decisions about one critical aspect of life, and that is finances.
Of course, some people would point out that we are promoting entrepreneurship in schools. That teaches you, or rather encourages you to make money. However, it does not teach you how to spend money wisely. With the entrepreneurship drive, it seems to me that we are teaching that the solution to money problems is even more money.
This is a huge fallacy. How many people can actually be so sucessful at entrepreneurship that money is never a problem ever again? Most people either end up being a salaried worker, or perhaps owning a small-medium enterprise. For many of us, money will always be a constant headache.
It need not be a headache if we had the knowledge of how to manage our money properly. We need to teach our kids that the proper way to financial freedom is control of spending. It is certainly a whole lot easier to control spending compared to controlling income. We usually can make decisions on how much to spend, but we usually have little say over how much income we get.
It is not surprising that many people, especially young people are in debt. Our society has glamourised consumption. Symbols of success are often material objects, such as the size of the car, the size of the property, the size of the bank account and so forth. Credit is easily available through credit cards and easy loan schemes. It is small wonder why many young people are in debt.
So, what did we do to address the problem? Financial counselling avenues are set up to help these people. While it is good to have financial counselling to help those who are already in debt, the question now is why are we not doing anything to prevent them from getting into debt in the first place?
Personally, I didn’t understand anything about financial planning until I came to university and made myself take courses in accounting and finance. It wasn’t rocket science, but it opened my eyes, especially when I learnt the power of interest. I suspect that many peoeple don’t even know the exact cost of taking up a loan or racking up credit card debt because they do not understand how interest works.
Take for example a car loan. If you pay cash for the mid-size car (e.g. the Nissan Sunny or Mitsubishi Lancer), it’ll probably cost you about $55,000 upfront. The person trying to sell you the loan tells you that it only works out to be a monthly sum of about $700 over ten years, with zero downpayment. For a graduate with a good degree earning $3000 a month, $700 is not that big a deal. However, if you do the math, $700 x 12 months x 10 years = $84,000. Over ten years, you paid $29,000 of interest to the institution that gave you the loan.
Shocking figures? Actually, $29,000 is not your actual loss. If the money had been invested instead of being given to the bank, you would have earned interest on it. Assuming that you invest $2,900 annually over 10 years at a return of 5%, the $29,000 would have been worth about $36,500 at the end of the ten years. With $36,500, I can probably go on annual 2 week trips to any part of the world for the next 10 years.
To illustrate the concept of how interest can work in your favour, let’s take the same example again. Assuming that you invest $2,900 annually over 30 years at a return of 5%, you would have paid a total of $2,900 x 30 = $87,000 for the investment. However, your return at the end of the 30 years is about $192,000. You earned $105,000 by simply doing nothing but investing your money wisely. Of course, if you increase the amount of your investment, or if you manage to achieve more than 5% returns, you will certainly get back alot more money.
Therefore, I really think that our education system should incorporate some form of financial education. The concept of interest is not not some esotoric concept. It’s something that can be easily explained to the person in the street. Armed with this knowledge, I am sure it will save many people from suffering future hardships. For those who still get into huge debt when armed with sufficient financial knowledge, at least they suffer not as a result of ignorance.
While providing simple financial education to our young is not all that difficult, I wonder why has it not been done. The only explanation that I can come up with is that it is not in the interest of the economy to have the bulk of the population being financial savvy. Interest accounts for a huge chunk of income for many financial institutions. If people are not going to get into huge debt, how can these institutions make money?
If you take an economic perspective, debt is probably a good thing for the economy because it increases the circulation of money in the economy. However, from a moral perspective, debt is not a good thing, especially when people are unable to pay their debts. Bankruptcy has a social stigma attached to it. The individual who is in debt often will have to worry about how to pay the debts, and this can strain relationships with their loved ones. It can affect their ability to work, or even their ability to function as a normal human being.
It’s really about time that we consider implementing financial education. If we can have things like moral education and sex education, why not financial education? After all, an education is abut equipping a person to be able to make informed decisions, no?
Loading ...
Sorry, abit of sidetracking from your money topic. Recently, I have been reading this book “Ancient Wisdom, Modern World” by the Dalai lama and from his book, there was this section that says that most people living in materially developed countries are less happy, and to some extent suffer more than those living in least developed countries. And they are so caught up with the idea of acquiring that they make no room for anything else in their lives”
Do you see this happening slowly in Singapore whereby good values are depreciating because people become more stress and frustrated due to materialistic life; chasing after money all the time. They neglected the importance of sharing and showing love & concern towards others but instead are always putting blame on people when they do not get what they want.
I think financial knowledge is important in school but good values should be re-incorporated, otherwise, our society will become one that is only concern about money and not on relationships or our environment.
I read your post with interest. You write this beause you see people in debt and some die because of this. It is failure to you but have you ever think it is success to others. There must be rich and poor in this world or else there will be no power. Ever wonder why this aspect was not taught after the signs were there for so many years. In order to learn about finances, one has to open their minds to the different scenerios in money matters. It is dangerous thing to think with many options in so early in life. Education is a powerful tool amd must be controlled “for your own good”, you will learn the books. Will you learn to be “independent” from what you have taught? At the end of day, there will always be money around but in whose hands. There is a bigger picture.
Hi Passerby,
I suppose you are quite right. The money chase has certainly caused a loss of focus on other areas. It is sad, but that’s the way it is. Our society has developed in such a way that success in material terms is the only definition of success.
However, that doesn’t mean that we should abandon materialism totally because it’s simply not practical to do so. I don’t think that anyone wants to return to the pre Industrial Revolution times. What we can do is to question whether life is more than single-mindedness in pursuing material comfort.
I for one believe that I only need to be comfortable, not rich. That’s why I choose not to try my luck in business. I believe that as a salaried worker, as long as I moderate my material demands, I will be able to afford a roof over my head, with 3 meals a day. Maybe a car and a yearly holiday for a little extra luxury. The rest of my time, I want to spend on doing something meaningful, such as humanitarian work.
Dear Layman,
Your point is well taken. Indeed in life, there are winners and losers. The one who wins does so at the expense of the one who loses, and without losers, there can be no winners.
However, I don’t think that it is justifiable not to do anything about educating people just to perpetuate the system of winners and losers. What I am concerned about is that people are losing out financially because of ignorance. I’m perfectly fine with people losing against someone who’s better, but I think it’s a different story when people lose out financially because they were not educated enough. In fact, this smacks of cheating to me. It’s unfair competition.
And, I disagree the because education is a powerful tool, it has to be controlled “for your own good”. This kind of ideas only seek to preserve the status quo and not seek improvement, not to mention that controlling education can lead to disaster, especially when the control is abused. Just look at how Hitler brainwashed school children.
Dear Aaron,
Thank you for your response. It is good that you are clear about who wins and loses. I am glad that you see that education should not be used for “brainwashing” and the disaster of a “controlled” education. You would like to see people get better financial knowledge, let see how this can be done by our educational system. And the next thing to do is wait …
I probably won’t want to wait that long. If I can, I will try to do something. If everyone waits for someone else, nothing will happen. I don’t know what I can do though, but if my efforts can reach a few people and save them from disaster, it’s better than having nothing attempted at all.
“Our society has glamourised consumption. Symbols of success are often material objects, such as the size of the car, the size of the property, the size of the bank account and so forth.”
You said it. That’s really the root of the problem. While “financial ed” is a worthwhile persuit, it dosen’t stop the perpatuation of the culture of excesss and obessive consumption, which unfortunately, is one of the banes of our largely capitalistic times.
What we need is a paradigm change. Like you, I think schools are a good way to start that process of change.
Well, changing society would take some time, but at least if you make people more aware of the importance of minding their finances, you save them from immediate disaster.
Hi, nice post! I was from the same course as you…though it was known as ICM then.
Yeah, I’m an in between.. 2 years of ICM and 2 years of CNM.. heh
Hello,
Financial education has already been implemented wor
http://www.moe.gov.sg/speeches/2006/sp20060331.htm
Hi loanshark,
I quote this from the website that you have given me:
“Financial education messages are taught through subjects such as Social Studies and Civics and Moral Education at the primary and secondary levels.”
I’m arguing that financial education should be taught as a subject in itself, and not just a part of another subject. I think it is important enough to be a subject by itself.
In anycase, it is good that something has been done. The only sad thing is, it should have come earlier. I now shudder for my friends who are willingly getting themselves into debt because they don’t know what they are in for.
Hi Aaron,
I understand how you feel coz I know better than you because I am one of those blood sucking bank officers who hound debtors for payment until they are adjudged bankrupt. Ultimately, it’s matter of self discipline, youngsters nowadays should learn how to live below their means and not just within their means.
Haha, no wonder you nickname yourself as loanshark.
Discipline is one thing, but I personally think that ignorance is to be blamed just as much, if not more. I always advocate that it’s alright to get yourself in trouble, provided that you know you are heading for trouble in the first place!
If you get into trouble not knowing why you got into it, I think that’s sad.
It is true that financial education is really important, but there is such a thing known as vicious cycle of poverty. I suspect that is what the family had fallen into. How much can you begin to save if each month you earn just enough, or less than what is needed to survive? Financial education only works for people with enough money in the first place. You have to go one rung below that to truly understand the family’s situation I’m guessing.
Intentions are angelic however, in which the knowledge that create such a city must not be and if it does exist and persist, the inevitable contention that comes from running to and fro as the derivative increases its grip in society will number its toll exponentially in the arithmetic permutation according to time past. Nevertheless, your assertation is not without merits though somewhat dewy.
I did learn a bit about financial matters when I was in school. For our math curriculum, I remember doing stuff on interest rates (standard vs compound) and exchange rates (buying or selling currency). Of course, by the time I really needed to apply this knowledge, which was about 10 years later, I’d already forgotten how to use it. But at least I did learn a bit of it while still in school.
However, I must qualify this by saying that we learnt it in math, where there was no value judgement on these realities of life (e.g. “Interest is bad” or “Debt will reduce your quality of life”, etc). So maybe that’s what’s needed?
Hi Akira,
I disagree that you need a certain amount of money to be able to plan financially.
I don’t have much now as a student, but I still plan. Financial planning isn’t so much about managing your current wealth, but rather, charting a direction for future accumulation of wealth.
It’s not only about looking at current income and expenditure, but projecting future income and expenditure as well.
Ultimately, it’s just a guide and the most important thing about financial planning is discipline. If you’re ill disciplined, you can do what I do. Buy financial products that requires you to put in money at regular intervals and that these products have a penalty for premature cancellation.
Hi Elaine,
You are right. There is no point about learning how to compute interest without putting it in context. What we need is to open the eyes of people as to how such useful such things are when applied to life.
And, we must inculcate the notion that everyone can be well-off, if they plan properly. Earning compound interest is a surer way to get rich than spending time to calculate the probability of striking TOTO.
Dear Garble,
I might be somewhat idealistic, but I just think that it is unfair for someone to get into trouble not knowing that they are getting into trouble. I only hope that we have a society where we make people know and understand enough the weight of their actions. Everything else they choose to do, that’s their own free will.
What you see in Singapore is almost nothing compared to how much personal debt you see in the United States.
Most college students in the US use credit cards to get monthly and I’d say it’s a good guess to estimate this:
One average, most college grads in the US have an average debt of USD 5,000. I knew a couple of classmates from the US who are in debt as much as USD 15,000 by the time they reached 25 and had to declare bankruptcy.
Let me add this from MSN
:
It’s hard not to be worried when confronted with numbers such as these:
* About 43% of American families spend more than they earn each year.
* Average households carry some $8,000 in credit card debt.
* Personal bankruptcies have doubled in the past decade.
It’s not clear exactly where the debt trend will take U.S. consumers or the U.S. economy. But it is clear that both are sailing in uncharted waters.
Hi Masindi,
I don’t hope for Singaporeans to get there.
As it is now, many undergraduates take loans to finish their university education. For a 4 year course, it will amount to about $20,000. So, the graduate is already in big debt by the time they graduate.
If we don’t educate our young, ignorance will lead them to rack up credit card bills and take car loans to live up the good life.
If they marry, there’s the housing loan too. We’re almost in debt our whole life once we start working.
Financial education only works for people with enough money in the first place.
This isn’t true, you don’t need a surplus of funds before you begin to manage it. In fact, quite alot of poor people do practice finance management to survive. However, their forms of finance management is probably rudimentary in an educated person’s eyes.
While some poor people moderate their cash, there are some that don’t. Lets not even talk about interest rates for cars, because its beyond a ‘poor’ family. Aaron and I have already done to death the topic about how poor families have too many kids and subsequently, fail to move out of the poverty cycle.
As for young executives, who wish to buy cars and condos to fuel their ambitions/ego. Well, they really should know better. I read this article about a women who bought a merc because she was a manager at some MNC and her parents encouraged her to do so. Later, her finances became a mass of unpaid bills and she blamed her parents for not teaching her financial planning. Which was quite ridiculous.
Schools could teach financial planning, but just like degree holders who don’t apply what they learn at their jobs……ppl won’t apply what they learn about financial planning.
Materialism is a very dangerous thing.
Yo Aaron,
I have been reading some posts on your blogs after you got tomorrowed. As a cog in the financial system myself, I feel that debt should not necessarily be seen as a bad thing. Like many things in life, debt is amoral. It is not good, neither is it evil. Imagine a world without debt. No-one would be able to afford to ‘own’ their own homes (actually, technically you don’t own your home until you pay off your mortgage, but that’s another story for another day) and tertiary education would be beyond the reach of a big percentage of the population. But debt can be a dangerous thing if not managed properly.
I agree that financial education is important, but I’m not sure if it would necessarily solve the problem. The problem may not be one of head knowledge but one of the heart. In this age of consumerism, people are easily blinded by instant gratification and the need to keep up with the Joneses. Even if they know the power of compound interest, they may feel that it’s better to enjoy now than later. So it could be a conscious choice for some people. Just like smoking - just an example of the top of my head.
Just my initial thoughts. Now back to work.
Hey Kel,
I never claimed to solve problem in its entirety. If people want to head for disaster, they will go down the road to hell no matter what you do.
I’m more concerned about those who unintentionally go down the road to hell. By giving financial education, at least before the ignorant guy walks down the road to hell, there’s a big sign there saying “This road leads to hell”.
Whether they choose to walk that road or not, that’s up to them!
“Financial education only works for people with enough money in the first place”
That person who said that obviously needs financial education.
I definitely agree with you that learning about managing your finance would be a good idea. Being able to plan for your retirement, knowing and understanding the basic functionings of securities and the options avaliable for investments are extremely useful skills.
I think they can incorporate that in maths…like teaching compounding of interest rates when teaching geometric progression for example.
Oh and I also think that this is a good idea because it might spark some students’ interest in finance and more importantly demistify the idea of financial management.
Hi Aaron,
Imagine this situation, where you start out already in debt through no fault of yours. You don’t have a high level of education, hence your take-home salary is less than 1000 a month. How do you even begin to plan financially? You are a student now, but your projected income will be reasonably high. Ever met anyone in Singapore whose family survives on 800 dollars a month? Well, I have… I agree that financial planning is really important, but there are those whom we cannot even begin to explain the concept.
>>This isn’t true, you don’t need a surplus of funds before you begin to manage it. In fact, quite alot of poor people do practice finance management to survive. However, their forms of finance management is probably rudimentary in an educated person’s eyes.
Well, I sure want an example of this.
Hi Akira,
The premise of my argument is that financial planning should start in school. If you start out on the wrong foot, it is quite hard to recover. This is why I say we should try and tackle the problem before things turn so bad that it is impossible to manage.
Of course, planning is not foolproof. You can plan all you want but something can just happen to wreck everything. I’ve always emphasized that my aim is not to solve the problem for everyone. My aim is to prevent disaster for the bulk of the people from courting financial disaster through their own actions.
For other people who are genuinely suffering through no fault of their own, that is where the government and charitable organisations come in. When I say you don’t need big sums of money to plan, all I am trying to say is that what you need for planning is a projection of future spending power, and not current assets.
And, financial planning is a fluid process. The principles are rigid, but the execution is not. If for some reason life is throwing lemons at you, just modify the plan according.
Ultimately, financial planning is nothing more than a preventive measure. You can think of it as a ‘vaccine’. No vaccine works after the person has developed a full blown disease, right?
“This isn’t true, you don’t need a surplus of funds before you begin to manage it. In fact, quite alot of poor people do practice finance management to survive. However, their forms of finance management is probably rudimentary in an educated person’s eyes.
Well, I sure want an example of this. ”
Why do you need an example? *scratches head* I thought it was quite self-explanatory. More well off people plan financially in terms of fixed d’s, projected interest costs of loans, implications of childbirth and childcare. They plan projected savings by a certain age and try to calcualate a possible retirement age. They factor in the possibility of retrenchment, or overseas education for their children.
People who live on a more day-to-day basis, plan how much they spend everyday on meals. They plan the cost of school books for their kids. They set aside money for their utilities and are some try to be more frugal in terms of R&R. They carefully set aside a portion of their pay for their HDB loans. They make sure their 800bucks lasts them throughout the month, even if they can’t save anything, they’re happy.
This is what I mean by simple forms of finance management
“However, it does not teach you how to spend money wisely. With the entrepreneurship drive, it seems to me that we are teaching that the solution to money problems is even more money.”
Any backup to that please? This whole argument revolves around this assertion, so please show that this is really true. My school didn’t teach financial planning, but my parents taught me common sense and thrift.
Thanks =)
As you said, your parents taught you common sense and thrift, and you should be grateful to your parents for that.
Unfortunately, not every parent teaches their children how to curb spending. Entrepreneurship is about starting a business, and growing it. What’s the primary motive of entreprenuership? Profit.
I think it’s quite self explanatory that profit making and curtailment of personal spending are two different issues. My point is that teaching students the steps to money making is good, but it’s lopsided education. The other side needs to be looked at too. Holistic education, if you like.
What children learn does not just come from schools and parents, but also experience; unless they are repeatably unable to learn how to manage their allowances, mobile phone bills, etc, through personal experience, schools should teach finance management, as you have explained above.
I find your blog a pleasant read. Thanks! =)
Indeed. I think we have to start the cycle of making our people financially literate. By educating the young now, when they grow up, they will inculcate these values into their kids, and coupled with more in depth teaching from the school, we can certainly avert many potentially disasterous scenarios.
I’m glad you enjoy my blog. It’s been nice discussing with you too. Thanks for helping me further my thoughts with your questions. Appreciated.
Perhaps you could send post this to MOE and the ST forum? That would let more people know your views.
Well, I’m sure they are reading my blog. I just hope that the journalists reading my blog will be ethical enough to attribute their source, and not pass off my writing as their work.
Very well written! We share the same thoughts, although I learn through the hard way and were abit of late… glad you written this out. I come across many that are in debt be it due to house, car, credit cards, education, gambling even helping etc.. Sometimes is predicament…
Ironically our world or society has evolved and change into a place where financial ‘Webs’ are cast all over. We do need new skills, knowledge and tools in order to steer safely across, once you fall into the trap you will be immobilize, and slowly wait for your turn to become meal of that spider. I fully support the idea of educating the young with financial knowledge and also good values. Without a good heart, the knife will not be put to good use either.
Thanks man, i agree
( spam (
Is it ok?
I haven’t gotten much done these days. So it goes. What can I say? I’ve just been letting everything pass me by. Basically not much going on lately, but it’s not important. I’ve basically been doing nothing worth mentioning.
Singapore’s Education System Is a Failure
I think that the main purpose of education is to impart knowledge and comprehension ability so that human beings will be able to understand what goes on around them and subsequently, be able to make informed decisions by themselves.
Being a product of the Singapore education system, I would say that the system is truly one of the best in terms of producing people who can ace examinations. Unfortunately, the system fails spectacularly in preparing one to make informed decisions about one critical aspect of life, and that is finances.
Of course, some people would point out that we are promoting entrepreneurship in schools. That teaches you, or rather encourages you to make money. However, it does not teach you how to spend money wisely. With the entrepreneurship drive, it seems to me that we are teaching that the solution to money problems is even more money.
However, this is a huge fallacy. How many people can actually be so successful at entrepreneurship that money is never a problem ever again? Most people either end up being a salaried worker, or perhaps owning a small-medium enterprise. For many of us, money will always be a constant headache.
thanks for my project
Hi guys!
The site can be found PORNO quality films on any subject and taste. Welcome and a pleasant view!)
Real Quality Sex, Porn, XXX DVD MOVIES|
Real Quality Sex, Porn, XXX DVD MOVIES|
hi aaron,
I am just a typical secondary school student who well complains about everything. Haha. Tomorrow is my GP test on education and i really appreciate the insights that you have sighted in your blog posts. Thank you very much
hi aaron,
I am just a typical secondary school student who well complains about everything. Haha. Tomorrow is my GP test on education and i really appreciate the insights that you have sighted in your blog posts. It really gave me an impartial thinking of our own education system. Thank you very much