Why is financial literacy a skill that Thais need to learn urgently?

Question

Most people in Thailand still overlook the importance of financial literacy, which is a major problem because managing money is related to everyone from birth until death. Without this skill, you risk debt, stress, and an uncertain future.

What is financial literacy and why is it important?

From waking up, eating, spending money, working, investing, to sleeping—all of these are related to finance. Having financial literacy means understanding how to manage income, save money, invest, handle debt, and plan for the future wisely.

Warren Buffett (the investment guru) once said, “If you buy things you don’t need, soon you’ll have to sell things you do.” This highlights that unconscious spending can lead to serious financial problems. If this becomes a habit, it will impact you even more.

Clear benefits of having financial literacy

Having financial literacy brings many benefits:

Prevent financial mistakes - People who don’t understand loan terms with variable interest rates may end up paying millions more over their lifetime.

Be prepared for financial emergencies - When losing a job or facing unexpected expenses, a savings account helps you stay afloat without borrowing from financial institutions.

Achieve confident goals - With good budgeting, you can save to buy a house, study further, or retire according to your plan.

Increase confidence in life - With financial understanding, you’ll feel safer and more confident in making important decisions.

5 key components to know

1. Proper budgeting

Financial literacy starts with knowing where your money goes. Budgeting is planning your income and expenses. Know how much income you have this month, how much you spend, and how much you can save or invest.

2. Saving and investing

Saving temporarily is less effective than letting your money work for you by investing in assets with good returns (such as index funds, stocks, low-interest credit cards). You can build wealth in the long term.

3. Managing debt

Debt isn’t wrong, but it must be managed well—avoid letting interest consume your income. Pay on time and avoid overusing credit cards.

4. Understanding taxes

Few people realize how taxes affect their investments and savings. Understanding how to calculate taxes and your rights will help you save more money.

5. Choosing suitable financial products

Savings accounts, credit cards, stocks, mutual funds—it’s important to understand the pros, cons, and whether they suit your situation.

Current situation of Thais: OECD survey results

The OECD conducted a survey on financial literacy across various countries. For Thailand, the score was 71 out of 100, reflecting that Thais tend to focus on long-term planning but still have room to deepen their knowledge.

Example case: Manee’s story

Manee just graduated from university with her first salary of 18,000 baht. She decided to apply financial literacy as follows:

First: Create a budget - Manee made a clear income-expense record, dividing money for rent, food, transportation, and importantly, emergency savings.

Second: Start saving and investing - She opened a high-interest savings account and learned basic investing, then invested in an index fund.

Third: Manage debt - She had student loans. She paid them off according to her plan and avoided unconscious credit card use.

Fourth: Set goals - Save for buying a house, traveling abroad, further studies.

Fifth: Continue learning - Read financial books, follow economic news.

In the end, Manee was able to control her finances, achieve her goals, and feel confident about her future.

Financial literacy and the stock market

The stock market is a place to buy and sell company shares. Investors can trade through brokers or online platforms.

For beginners, start with:

Basic education: How the stock market works, types of investments, the role of stock exchanges.
Set goals and diversify risk: Choose appropriate assets, don’t put all your eggs in one basket.
Manage risk: Set stop-loss orders, rebalance your portfolio, follow market news.

Stocks are risky because prices fluctuate based on various factors such as company performance, economic conditions, and major events. Therefore, continuous learning and understanding are your weapons.

5 ways to develop your financial knowledge

1. Study from reliable sources

Online platforms, articles, podcasts, educational videos—all are good resources. Find updated and trustworthy sources.

2. Seek advice from experts

Financial advisors can help you plan for retirement, invest, buy a house, or manage your money effectively.

3. Prepare an emergency fund

Experts recommend saving enough for 3-6 months of living expenses before investing. This helps you avoid borrowing during crises.

4. Plan for retirement

Think about at what age you want to retire, how much money you need per month, and calculate how much to invest at what rate of return to be sufficient.

5. Spend wisely

It’s not about cutting conveniences but planning to buy important items first. Keep less important items for next month. This way, you save without sacrificing essentials.

Summary

Financial literacy is not a luxury but a basic skill everyone should have. Whether you’re an employee, entrepreneur, or investor, this skill will help you:

Reduce financial stress
Better plan for the future
Increase confidence in decision-making
Build long-term wealth

Most importantly, you don’t have to wait until you’re fully ready. Start now by budgeting, saving, and continuously learning. Remember, consistent practice will turn this skill into your second nature.