Money matters: how financial literacy lessons can help Hong Kong youth learn responsible habits to last a lifetime

“I came across these stocks from watching the news regularly as well as talking to my economics teacher. My father, in particular, encouraged me to invest.”

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So far, the teenager’s endeavours have been successful, and he is eager to dive deeper into stocks, taxation, trading and liquid cash.

Though most Hong Kong students may not have the means to invest in the stock market, Vijay noticed many of his peers had difficulties managing money.

“Lots of teens struggle with controlling spending, particularly when they see shopping as a way to escape from the stress of studying,” he observed. “Healthier habits to deal with stress should be encouraged, especially ones that aren’t so financially taxing.”

“It is the lack of education and oversimplification of financial management skills ... Most people simply reduce it to ‘save more, spend less’ without delving deeper.”

Financial education has long been absent from most Hong Kong classrooms; students rely on elective subjects such as business and economics to learn about money.

But starting next year, financial management and economy will be incorporated into local primary school curriculum under a new subject, Primary Humanities. Pupils will learn how to manage money, make responsible purchases and avoid cyber traps. Later this year, financial education will be integrated into the curriculum for junior secondary school students.

A teacher surnamed Lai*, who works at an aided primary school in Jordan, noted that money management and saving habits were crucial for Hong Kong youth. Citing reports of university students getting into irresponsible amounts of debt, the teacher emphasised that early exposure to these topics could prevent young people from spending beyond their limits.

“Understanding debts and investments should also be considered, as they will benefit students throughout their ... lives,” she said. “Early financial literacy can contribute to a healthier economy after all.”

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Financial literacy refers to the ability to understand and use skills, such as budgeting, investing and personal money management.

Other Asia-Pacific countries have already included these topics in their curriculum. For example, in Australia, financial education is mixed into mathematics; in Singapore, these skills are imparted through its Character and Citizenship Education syllabus.

Hong Kong experts emphasised learning these habits from a young age, especially with the prevalence of cashless payments and online transactions that can desensitise people from realising how much they spend.

Christina Yu Wai-mui, a professor specialising in business and personal financial education at The Education University of Hong Kong, supported imparting basic financial education starting from kindergarten.

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“In Hong Kong, because we don’t have a regular or formal financial education in school before, it is very hard for students to build up good habits and manage money well,” she explained.

Yu advised young people to seek financial advice from reliable adults, instead of their peers: “Teenagers need to be able to differentiate needs and wants, track their cash flow, and keep a budget by using electronic tools.”

The educator also encouraged parents to teach children the value of money by allowing them to manage their own red packets: “Parents who restrict children’s use of money are in fact taking away the learning opportunity.”

She added that values education was at the core of financial literacy: “When we talk about income, saving, consumer rights, and financial planning, we are also talking about ... respecting others [and] keeping promises.”

Last year, local think tank MWYO surveyed about 1,600 tertiary students in Hong Kong and found that financial literacy among respondents was low, with an average score of 12.7 out of 21.

Eighteen-year-old Abhi Donda, who is from Hong Kong and is studying architecture in London, said young people should seek out financial education starting from the age of 16 – especially for those going abroad like himself.

“Many tend to go abroad or locally to university without any prior knowledge on managing finances, which can be quite detrimental early on in their university experience,” said the first-year student, who learned about financial management by studying business management for his International Baccalaureate exam in Hong Kong.

“Budgeting is definitely a skill that should be put into practice from an earlier age whether it be through monthly allowances or spending caps,” he said, sharing that he would keep track of his finances using a spreadsheet and set monthly spending goals to limit his expenses.

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A spokesperson from Hong Kong’s Investor and Financial Education Council (IFEC) highlighted that many young people often do not understand the purpose of financial management.

One common misconception is that youth should not start managing their money until they have a full-time job, and they do not see the relevance of budgeting and expense tracking.

“Starting financial management early, even before getting a job, allows people to develop good financial habits, make the most of savings and investment opportunities, and be better prepared for unexpected events,” the spokesperson said.

Another myth is that these skills are only for the wealthy, when in fact, financial literacy is often touted as a way to help break the cycle of intergenerational poverty.

“Financial literacy is important for everyone, regardless of their income level,” the spokesperson stressed.

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A 2022 survey conducted by the IFEC revealed that 95 per cent of the 1,000 primary school pupils interviewed would regularly use Octopus cards for daily expenses. But 40 per cent of respondents admitted they were unaware of the remaining balance on their cards.

Educators have cautioned that the transition towards a cashless society has presented unique challenges in imparting financial literacy to the younger generation.

“While a simple tap of an Octopus card completes a transaction, it is important for the teenagers to see the connection between virtual money and physical money,” the IFEC spokesperson said, noting that tracking expenses is essential for responsible spending habits.

Lai noted: “Most primary students use Octopus cards to pay for everything nowadays, which makes it difficult for them to understand the value [of money].”

With cashless transactions, Donda noted how his peers tended to spend more recklessly: “I believe there is a shift into a culture where spending has become more common and frequent among young people.”

Even Vijay admitted struggling with the pressure to buy more things, but he would try to weigh the benefits and costs before making a purchase.

“I try to conduct some research ... so that I could buy high-quality items and reduce the frequency of shopping,” he explained, adding that going through this thought process was important for teens.

“As they explore financial decision making, students will be able to sharpen their critical thinking and discover how to deploy these skills in day-to-day life.”

*Full name withheld at interviewee’s request.