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Are you financially literate?

HAVING a basic understanding of financial matters is important to making wise choices, but not many Jamaicans are financially literate, a new study has found.

"In the area of financial knowledge, less than half of Jamaicans received a high score," reported the National Financial Literacy Baseline Survey.

Jamaicans appear to have particular difficulties with the concept of time value of money and identifying and calculating the impact of interest compounding on savings." The results confirmed what the Financial Services Commission (FSC) noted as an inability of some individuals to engage in wise financial planning.

The FSC frequently has to respond to requests from Jamaicans asking for help to navigate through transactions they make with businesses, with many having to resort to the courts, according to Communications Manager Nadine Newsome.

"We get a lot of calls from persons who did not fully understand loan agreements in which they entered," said Newsome.

"The findings are therefore quite timely and essential," she said. "Some people are taking out loans without even knowing the interest rates." Local lecturer and pilot of the survey, Dr Lawrence Nicholson reckons that the emphasis on learning to calculate simple interest in the lower grades of secondary education, with compound interest explored at the higher grades, does little to prepare students for understanding

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