Financial Literacy and Money Script: A Caribbean Perspective PDF
Preview Financial Literacy and Money Script: A Caribbean Perspective
Financial Literacy and Money Script A Caribbean Perspective Christine Sahadeo Financial Literacy and Money Script Christine Sahadeo Financial Literacy and Money Script A Caribbean Perspective Christine Sahadeo St. Augustine Campus University of the West Indies St. Augustine, Trinidad and Tobago ISBN 978-3-319-77074-1 ISBN 978-3-319-77075-8 (eBook) https://doi.org/10.1007/978-3-319-77075-8 Library of Congress Control Number: 2018936515 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and trans- mission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover Credit: Micheal O Fiachra / EyeEm / Getty Printed on acid-free paper This Palgrave Macmillan imprint is published by the registered company Springer International Publishing AG part of Springer Nature. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland To my parents (deceased) Sookhranie and Dookin Ram To my husband Ganesh Sahadeo Acknowledgments The decision to write this book has many beginnings or roots. Probably the most important was my mother’s approach to financial independence (in particular with regard to her seven daughters), education, and manag- ing one’s life and happiness. My mother was determined that all her chil- dren had an opportunity of a good education. This was probably due to the fact that she was denied the opportunity to become a teacher, (owing to the Hindu tradition that females should not work) and wanted to ensure her children were successful, attained financial independence and seized the opportunities that she was denied. At home she taught us about savings, investing, putting aside for a rainy day, and understanding the word “bankruptcy” from an early age. My learning and understanding of the importance of real estate also came from my mother. She proudly explained her decision to move from the lovely village of Surry, Lopinot, to Tacarigua, which had schools, reli- gious establishments, easy access to public transportation, and most importantly allowed her children an education. I learnt from her that property is all about location, location, location! In September 2006 as a Member of Cabinet I was privileged to be part of the decision to introduce a National Financial Literacy Program, which was introduced in the 2007 Budget of Trinidad and Tobago with the stated rationale, and I quote “The average consumer is now required to make complex financial decisions such as contracting mortgage and vii viii Acknowledgments installment loans, choosing from a range of checking accounts and select- ing savings instruments.” On leaving government, I joined the University of the West Indies in 2008 and I must thank the former Head of Management Studies, Errol Simms and former Principal, Professor Clement Sankat who approved the introduction of Financial Literacy to the University of the West Indies (UWI) and the partnership with the Central Bank of Trinidad and Tobago in 2010. I must thank the then Governor Ewart Williams for the support of this partnership with the Central Bank. I must thank Denyse Patrick who assisted in the early stages of this book and Tamara Rampersad, my research assistant, who provided tremendous assistance in proofread- ing the contents of this book. I must thank my son Avinash for his insightful feedback and critique. The selection of topics to include in this book was a challenge. I have to confess that homeownership and entrepreneurship were included because of my own experience and saw them as fundamentally important in the life of every individual. Becoming an entrepreneur has always reso- nated with me. So when my young son at 17 wanted to start a business while still at secondary school, I supported the venture. The business has grown and albeit he is a chartered accountant and spent five years in the profession, he is now a full-time contractor and entrepreneur. My younger son is a born entrepreneur, and after leaving university he joined the fam- ily business and took it to new heights while starting his own business. Based on my own children’s success, I wanted to assist others in becoming entrepreneurs. Accordingly the topics on entrepreneurship and prepara- tion of business plans were included in this book. In 1977 I suffered great pain on the loss of our home by fire which was not insured. My father had recently retired due to a medical condition and older siblings were encumbered with mortgages and family commit- ments. I was in a dilemma and had to change career options to one that would allow me to work and study. Being good with numbers, I gave up my first choice of medicine and began a career in accountancy. I fre- quently question if this was my destination or was it just karma? This however afforded me the opportunity to understand homeownership and debt financing. I had to secure a loan at the age of 19 and select, employ, and manage a contractor to build a two-story home. The construction of Acknowledgmen ts ix a two-story building although costlier than a single-story converted our home into an investment, the rental of the ground floor providing income to repay the mortgage. Homeownership is usually one of the biggest investments in one’s lifetime and many times decisions are made without adequate knowledge or understanding of this investment. I saw this as an opportunity to include homeownership in this book as an important ingredient in acquiring financial knowledge. The financial literacy program was very impactful at UWI and in 2012 it was also introduced as a co-curricular course. Although the topics included under this program are expansive, there are many subject areas worthy of consideration, such as preparation and understanding wills, personal income tax, and tax planning. We live in an ever-changing and turbulent world and it is becoming more imperative that we understand the basics in financial literacy so that we have the ability to make informed judgments and take effective decisions in the use and management of money. Contents 1 A Review of Financial Literacy Initiatives in Selected Countries 1 2 Attitudes and Money Scripts, Goal Setting, and Budgeting 21 3 Saving and Investing 35 4 Debt Management 57 5 P lanning for Retirement 67 6 R isk Management 81 7 H ome Ownership 131 8 Introduction to Entrepreneurship 175 xi xii Contents 9 Basic Financial Accounting 207 10 Business Planning 231 Index 249
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