EDITORIAL
More recently, Barbadians are being encouraged to examine their financial situations and make moves towards not only increasing their incomes, but establishing sustainable work opportunities that would benefit themselves, and the economy in the long-run. Though this has been the overall goal for all of this country’s citizens, the challenges which emerged with the onset on the novel coronavirus pandemic and which have intensified over the ensuing months, have seen the need for this motivational shift to be fast-tracked.
Moreover, there is now an emphasis being placed on establishing “generational wealth”. Speaking at a Barbados Association of Insurance and Financial Advisors (BARAIFA) meeting and installation ceremony last week, former president of the association, Gay Griffith, highlighted the need for individuals to purchase insurance to ensure that their final expenses (burial) are covered and that they not only leave their children and family expense-free, but also safeguard their futures by leaving enough wealth that the generation after can be able to live well and then continue that tradition.
In addition to Griffith’s outlook, the Government has sought to “empower Barbadians with the knowledge and skills that enable informed and effective money management” by establishing a National Financial Literacy Bureau. The aim of this initiative is: improving money management skills; building a strong foundation for financial decisions; and, once again, creating wealth that is intergenerational. The Bureau will target households and community groups; businesses – start-ups, MSMEs, and large enterprises; as well as schools from the primary to tertiary level, through training clinics at various locations like schools, community or resource centres or online.
While lauding both Mr. Griffith’s and the Ministry’s perspective when it comes to the need for more Barbadians to create generational wealth, it must be noted that insurance policies are only one means of doing so, there are other ways that can be employed as well. Furthermore, learning to balance your budget and improve spending decisions to limit the risk of living paycheck to paycheck will only get you so far. You need to have more income than expenses and if cost of living cannot be adjusted and expenses cannot be cut any further, then exploring alternative avenues for earning money is a must.
Therefore, it is crucial that any move to teach financial knowledge does so holistically, ensuring that true financial literacy is attained. It is also key that government facilitates these opportunities by removing bureaucratic tape and relaxing unnecessary regulations by financial institutions which result in restrictions. After seemingly supporting the push for e-commerce in the initial days of governing, it is very disappointing that, at present, it is easier for someone to use a credit card to “borrow” foreign-exchange – to be repaid at a high interest rate – to purchase an item from an online store, than it is for that same person to use a visa debit card to access their own money to trade on the foreign exchange (forex) market to earn valuable foreign exchange. In fact, while children in Asian economies learn the basics of the forex and stock markets and elevate to become major money movers, understanding how money works, adults in Barbados are being deprived of this opportunity and are being instead faced with increasing fees for transactions and even simply holding accounts. There should not be a double standard; if you want to encourage investing, then people should be allowed to use the same tools available to larger institutions without penalty.
It is hoped that the training clinics set to begin next week will explore all these issues and that government looks past these sessions into what more can be done to ensure our people elevate out of poverty.