If you want to learn about the best ways to manage your money and invest, it might seem that you should take a comprehensive course, whether it is online or in person.

It turns out that there is a better way for many to learn — and it may be even easier.

You can benefit from acquiring knowledge in small doses and applying the skills as soon as possible.

HOW PEOPLE ARE LEARNING TO MANAGE FINANCES

Learning about money management starts quite early now.

The Financial Literacy Hub for Teachers here was established in 2007 to help teachers to guide students in their learning in primary and secondary school, for example, and a financial literary programme in polytechnics was established by the national financial education programme MoneySense in 2018.

These programmes can be helpful, as research shows that financial education in the classroom is linked to positive financial outcomes for students years later.

For adults who want to build on that knowledge, plenty of options are available.

Governmnet agency SkillsFuture Singapore provides credits to help pay for courses such as Managing Your Personal Finances, and there are a variety of courses online as well as in classes where you may attend in person.

However, that training may not provide enough of what people really need.

For Generation Z and millennials, a survey by MoneySense found that half of the working adults here aged between 17 and 29 had not started planning for their future financial needs.

Reflecting the difficulty for adults more broadly, Associate Professor Daniel Fernandes of the Catholic University of Portugal and his fellow researchers found in their analysis of 201 studies that interventions such as people taking courses on financial literacy explained only 0.1 per cent of the variance in financial behaviour — meaning that there was virtually no effect from just taking a course.

Financial education decays over time, they found, so even many hours of instruction have little effect after a couple years.    

The impact of that lack of knowledge can be huge.

While research here is limited, the Brookings Institution in the United States found that low financial literacy is correlated with a host of negative credit behaviours, including higher borrowing costs and mortgage delinquency.

Young people aged 18 to 34 are worse off, Brookings found, and pay more in interest on credit card debt than older adults.

And individuals who do not understand financial planning well may not start investing early enough.

As a simple example, starting at age 25 and investing S$100 a month that earns 5 per cent a year gives you S$81,869 by the time you are 55.

Waiting until you are 35 to start that S$100 monthly investment will net you just S$40,745.

To overcome the issues, Assoc Prof Fernandes and his fellow researchers suggested “just in time” financial education tied to specific behaviours.

The Brookings Institution similarly said that financial literacy benefits from the acquisition of financial skills and behaviour shaped over time by experience.

HOW TO PICK UP FINANCIAL SKILLS

While someone who is intensely interested in investing can benefit from longer courses, the research indicates that many people may benefit more from just-in-time learning than from one-time courses.

The question for many people then, is how to get the knowledge they need.

A good place to start is the MoneySense financial health check. The five-minute online survey can give you recommendations that help you figure out what you need to learn and improve your financial health.

Then, you can engage in just-in-time financial learning when you need it.

Rather than taking an 18-hour course once, for example, a better alternative may be to learn in bite-size pieces and apply the skills immediately.

When you finish secondary or tertiary education and start working, for instance, it is important to learn how to save and invest.

MoneySense has short articles about how to save.

The Institute for Financial Literacy at Singapore Polytechnic runs a three-hour Introduction to Personal Investing course as well as a Money Management and Financial Planning series.

And if the courses pique your interest, the SGX Academy offers programmes on investing for both beginners and experienced investors.

People who want to learn more can also take courses online, such as a course by training portal Udemy called Personal Finance Management for Young Adults that explains everyday money management.

When you set up a budget, you can use a mobile application such as Wallet or Seedly.

On top of tracking your expenses and helping to manage your money, these and other apps also offer videos or articles on managing your money, so that you can get information about money management when you need it.

It is also important to make the right choices when you borrow, whether it is to pay for a vacation or buy a home or something else.

Along with getting information from MoneySense or NAV, a digital adviser offered by DBS bank, for example, you can learn online through short programmes such as Udemy’s Understanding Loans or Khan Academy’s Introduction to Mortgage Loans.

These and a variety of other short just-in-time learning options can give you the knowledge you need for just about any financial activity, when you need it.

When you want to learn more, you can look for online courses, books in the library, or more detailed training that teaches everything from money management to complex investment strategies.  

The benefits of learning can be enormous. Whether you save thousands of dollars by comparing mortgages or earn tens of thousands of dollars by investing better, the knowledge you gain can put you on the path towards financial freedom.