"We Can't Afford It Anymore" | New Whitepaper Highlights Link Between Cost of Living Crisis and Weak Financial Literacy

SINGAPORE, 21 September 2022: The Money Awareness and Inclusion Awards (The MAIAs) today published a new whitepaper, highlighting the tragic cost of weak financial literacy globally. A subject that has become even more relevant and painful as the world bounces from the covid pandemic to the cost-of-living crisis, even United Nations Secretary General António Guterres in his September 20th speech “Transforming Education”: “Learning calls for a focus on a whole new set of skills, including digital literacy and financial skills.”

Titled “We Can’t Afford It Anymore: Financial Crises, Personal Suffering and the Urgent Need for Money Awareness”  the MAIA white paper concludes: “The one thing we really can’t afford during today’s cost-of-living crisis is to leave finance untaught to yet another generation.”

The MAIA whitepaper cites global research that underlines how desperate the situation has become: In surveys across the world, people with weaker financial literacy have lower savings and smaller emergency funds, but they are also much more likely to fall victim to online scams and become problem gamblers. Little surprise then that 73% of Americans consider money their main source of stress. But this money-related stress can quickly escalate: 100,000 people attempt to take their lives in the UK every year when in deep debt, analysts have shown.

Michael Gilmore, experienced Singapore-based financier and co-founder of The MAIAs commented,”Our global failure to teach how money works is a huge contributor to these crises. It is a universal problem, impacting young and old, from America to Africa and Asia: no one is immune and nowhere is safe. It exacerbates poverty, accelerates inequality, and destroys social mobility. But perhaps most shockingly, having a low awareness of how money works literally puts people’s lives at stake.”

The paper notes valuable evidence from countries as far apart as Indonesia, Bangladesh and Ghana, that learning about money helps people improve their situation and escape poverty. Being able to answer just one more question correctly on a basic financial literacy test, for example, meant an 18% improved likelihood of escaping poverty.

Additionally, the paper draws on the work of its 2022 Money Awareness and Inclusion Award winners, all of whom are trying to “make money better”. Chief among these is leading financial literacy expert, Professor Annamaria Lusardi whose 2021 research won the MAIAs 2022 Best Academic Paper for finding that teaching about money improved knowledge and behaviour across 33 different countries. 

MAIA co-founder Trudi Harris, who has worked in marketing communications for over twenty years, said “Money awareness can’t be marketed like other products: there is a huge lag between when we should buy a financial product or service – a pension for example – and when we’re going to actually need that product.  ‘Getting it’ requires either a huge leap of imagination – or education.”

The MAIAs were devised as the first global money awareness body aiming to solve the problem of weak financial literacy experienced all over the world, by finding and celebrating the best solutions. The winning solutions ranged from academic research on gamifying education to 12-year-old influencers making videos about money.

Gilmore added, “We have to take this more seriously than we ever have before. If we don’t, we risk leaving future generations to face each new crisis as though nothing similar had ever occurred previously, wondering why no one told them sooner that prevention was possible. Those of us who feel more financially capable must remember we stand on the shoulders of previous generations and help others follow where we have been.”

The first announcement of judges for the 2023 awards will be made this October, and the awards will be open for submissions in January, the date to be revealed soon.

Please visit maiawards.org to find out more.

Contact: Trudi Harris at trudi@www.maiawards.org or Michael Gilmore at michael@www.maiawards.org