Assignment 1

a. What do you understand from your readings regarding the issue?

Teaching youth how to do their financial management is very crucial and this skill must be cultivated since they are small. The fundamental of teaching youth financial management is through saving. Saving is a good habit and it prevents youth from spending extra money on something that is unnecessary. Saving also can help us when there is an emergency that we need to use money. Back to 1950's and 1960's, many youth worked, but often part of their income went to help support the family. By the 1980's youth were mostly working to pay for their consumption, most of the money went to entertainment, clothes and outing. Today, youth can earn much more compare to the past, but do they have a proper financial management? The answer is NO. In the materialistic world, technology gadgets are hunted and fascinated by the youth. Many youth works as a part time or during holiday just in order to get them a new iPhone etc. But the main problems are the technology is changing rapidly day by day and the marketing strategies of the gadget companies are cunning. Most of the companies will change the design of the phone and add in some new features and sell it as a new brand phone every year. Hence, the youth will be fooled by them and follow it blindly. Imagine a teenager is changing his/her phone every year once a brand new phone is released. All of their money will go to handphone companies and the price of the phone is not cheap. Hence, parents and government need to play an important role to teach youth about financial management. An idea of saving money for education, vehicle and house down payment in the future should be implanted in their mind.

b.Why do you think it occurs? Explain your answer.

In recent year, the world economy shrinking, recession occurred in every parts of the world. Many people have been fired and unemployed. The one of the reason why is this happening is because adult nowadays don’t have a proper lesson about financial planning and management since they were small. They use their credit card willfully on branded items and they couldn’t afford it. They spend more than they could earn. Hence, they sued by bank for bankruptcy. In American, the residents simply borrow money from the bank due to the loose regulation. They can borrow money without any mortgage, thus when they failed in their business, they got nothing to pay to the bank and bank is facing financial problem.

a. Explain their impacts on

i) society

If youth doesn’t have good financial management, once they graduated from university they will face a big financial problem. Most of the salaries of fresh graduated students are around rm2000-rm3500 and the living cost in the city is extremely high. They have to pay for the petrol fee, accommodation, necessity items of daily life, and food. After deducing all the expenses, they got no money left for saving. For students who borrowed PTPTN will not have extra money to pay back. Young adult will live in debt and how are they going able to buy house and raise a family in the future. Hence, it will cause a great impact to the society if youth doesn’t have good financial management.

ii) nation

As I mentioned in the above, the impacts on the society is inevitably connected to nation. If the society cannot function properly it will affect the nation too. If everyone is spending willfully and do not save money, bank will not have money to do investment and borrow it to the businessman or entrepreneur. Besides that, spendthrift who are not able to pay back the money to the bank will be sued bankruptcy and yet bank cannot get back their money. Hence, it will create a jobless society and many people are living in a huge debt. Thus many social ill like robbing, kidnapping and stealing will occur in order for they to get money. It will trigger the national security alarm when the crime rates are rising.