Financial education helps individuals develop habits of saving, investing and managing debt, as well as making use of various banking services to their benefit, according to the Banking Association of Montenegro (UBCG), which is promoting European Money Week again this year.
UBCG Secretary General Bratislav Pejaković stated that financial literacy refers to the ability to make sound financial decisions based on knowledge, skills, and attitudes, taking personal circumstances into account.
“Many developed countries, such as Canada, Finland, and Singapore, are introducing mandatory financial literacy in their education systems, recognizing the importance of early money management skills. Through these programs, students learn basic principles of saving, investing, and budgeting, which helps prepare them for financially responsible decisions in the future,” Pejaković said in a statement.
According to him, a well-structured national financial education strategy is crucial for promoting economic stability and increasing competitiveness.
“Many countries have taken proactive steps to develop and implement such strategies, with the banking sector serving as a key partner in supporting financial education initiatives,” Pejaković added.
European Money Week takes place from March 18 to 24.
“Traditionally, for the past eight years, and again this year, the Banking Association of Montenegro is visiting primary and secondary schools, as well as universities, where we strive to raise awareness on this topic through age-appropriate lectures, while distributing gifts provided by the commercial banks,” Pejaković said.
He emphasized that citizens should practice moderation, even when saving.
“Just as you shouldn’t chase every opportunity to make money, you shouldn’t chase every opportunity to save either. Excessive focus on both can lead to unnecessary stress and problems that money cannot solve,” Pejaković stated.
He added that at a time when the whole world is facing economic difficulties, financial stability is becoming essential for every individual and society as a whole. However, achieving this stability is impossible without proper financial education.
“Understanding the basic principles of saving, investing, and managing money is key to making informed decisions that ensure long-term security,” Pejaković explained.
A 2021 quantitative study showed that 22.1% of respondents were familiar with basic banking and personal finance management during their education, with most of them having completed university or postgraduate studies. Additionally, 41.4% were partially familiar with banking basics and finance management, while 36.6% had no exposure to this topic during their education.
All respondents whose highest level of education was primary school, or who had no formal education, indicated that they had never had the opportunity to learn about basic banking and personal finance management during their education.
Regardless of the education level, the population in Montenegro is not sufficiently familiar with terms like interest rates, inflation, annuity plans, debt management, transaction accounts, grace periods, how payment cards work, and their actual purpose. Increasing awareness of these topics can help individuals avoid poor financial decisions.
