FLI, personal finance, management, financial literacy, youth, parents

“The level of financial literacy among Bulgarian young people is relatively lower than that of their peers around the world. In 2018, a PISA study on financial literacy was conducted and, out of 20 countries, Bulgaria ranked 18th. The reasons for this are complex. Children’s financial literacy is a mirror of that of their parents, which is normal, because these skills and attitudes toward managing money are largely about behaviour,” said Rositsa Vartonik, Director of the Financial Literacy Initiative Foundation, in the studio of Bulgaria Morning.

“If parents themselves are not sufficiently financially literate, their children are unlikely to be either. Traditionally, school is the place that helps minimise social disparities, whereas in Bulgaria this remains a challenge. On the other hand, there is no dedicated subject called ‘Financial Literacy’ in schools. There are several core principles children need to learn, one of which is: do not spend more than you can afford. This is a fundamental rule,” Vartonik stressed.

According to her, technologies are also tempting. Digital technologies provide easy access to the financial world, but they also carry risks. If fast and easy access to credit, investments, and similar products is not underpinned by solid personal finance management habits, it takes just one step to run into problems.

Bulgarians perform relatively well in areas such as budgeting daily expenses and planning purchases. We are a nation of savers, but we tend to keep our money in deposits. There are, however, two more problematic areas. One is how to protect ourselves against financial risks. The most obvious examples of such risks are natural disasters—floods, earthquakes. There are insurance mechanisms that can help us, but we do not use them fully. The other, equally important area is thinking about tomorrow—long-term financial planning, including planning for the retirement period of our lives.

Watch the full discussion!