The Nordic country with one of the world’s best education systems wants its people to be top of the class in managing their finances.
Finland is tackling a worrying rise in consumer credit defaults by striving to become the most financially savvy country by 2030. On Thursday, Justice Minister Anna-Maja Henriksson unveiled a financial literacy strategy to meet that aim.
Drafted under the guidance of the central bank over the past year, the strategy aims to boost people’s financial skills by enlisting experts from banks, pension and insurance companies, as well as social media influencers, to reach across generations.
The people behind the project say many Finns lack the skills required to navigate an increasingly complex financial world, where the gradual decline of physical money makes it harder for some to track spending, while the availability of easy credit risks leading to excessive borrowing. Defaults on bills have climbed over the past decade, prompting policy makers to crack down on payday loans and excessive mortgages.
Common situations where people fall behind on their payments include sudden unemployment, illness and divorce. While payment defaults affect all age groups, the biggest increases have been among the middle-aged and the elderly, while young adults appear to be doing better than before, according to Anu Raijas, a senior adviser at the Bank of Finland.
“Some young people never learned to use cash and have always dealt with digital payments, but many older folks need to un-learn old routines and money habits and assume entirely new ways of handling their finances,” Raijas said in an interview in Helsinki.
The aim is to make people understand that “economic shocks can hit anyone,” Raijas said. “Everyone should have some savings to help pay their bills if they suddenly lose their jobs.”
This article was provided by Bloomberg News.