Founder of one of the nation’s largest retail conglomerate Joe Issa, who is a member of “The Ultimate Professional Directory of International Who’s Who”, has said that he supports the teaching of money management across the school system, stating it will make for a more frugal populace.
“I am of the view that if we teach money management to kids, it will make them more thrifty later on in life,” says Issa, adding, “It could break the back of the phenomenon of living from pay cheque to pay cheque and make for a less turbulent credit environment, such as what we experienced in the late 1990s when both consumers and financial institutions went belly up.”
Issa’s comments come as the present administration moves to introduce an entrepreneurship curriculum in primary, secondary and tertiary institutions to foster innovation among school leavers and generate economic growth.
But now Issa, who supported the idea of early entrepreneurship training, is pushing the envelope to include money management, which he argues is a critical skill for managing spending and credit in adult life, whether for personal purposes or as managers of institutions.
And Issa is not alone. In a survey in the United States, 87 per cent of respondents believe that teaching kids about money management in schools will lower the population of people with credit issues in the future, according to the website Debate.org.
Joseph John Issa
“Yes we do not know whether they will use the financial education learnt early in life to better their futures, but what we do know is that if we do not expose them to it early, they are less likely to have the money management knowledge necessary to produce good spending habits later in life,” says Issa, whose business strategy is to spend as little as possible and earn as much as possible.
A former commercial bank director and Nominee for the Business Observer Business Leader of the Year 2004, Issa says too many consumers fall into the trap of buying on credit without the ability to manage the payments, stating that by not paying their credit card bills in full and on time, they run deeper into trouble.
“More people must understand the cost of not paying cash and the benefits of saving for the future…They must learn early not to be influenced by the Joneses and spend unnecessarily.
“They need to create a budget and stick to it…In that budget there must be something set aside for saving for future consumption, such as the children’s education, unforeseen circumstances and paying their taxes when due. This means they must be able to track their expenses and manage their income,” says Issa, Executive Chairman of Cool Group of Companies.
He says more people need to think like Warren Buffett, referencing one of the richest men in the world, who has warned would-be investors to hold on to his ideology of frugality, which involves making every financial transaction worth the expense.
Buffett’s well-regarded techniques, which are said to be investment-boosting and portfolio-multiplying, include avoiding expenses which appeal to vanity or snobbery, going for the most cost-effective alternative, favouring expenditures on interest bearing items over all others, and establishing the expected benefits of all desirable expenses using the rule, “plus/minus/nil” to “standard of living value system”.
According to Wikipedia, “Money management is the process of managing money which includes expense tracking, investment, budgeting, banking and taxes. It is also called investment management.”
However, Issa suggests a step-by-step approach beginning with setting goals and creating a budget, which he says, “provide a critical guide for how to proceed,” adding that “it is also important to be able to track spending through bank reconciliation and save some money.”
Joe Issa Champions for Education 