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MoneySense framework

Three tiers of financial literacy

MoneySense initiatives cover the three tiers of financial literacy as follows:

  • Tier I - Basic Money Management: This covers budgeting and saving skills, as well as responsible use of credit.
  • Tier II - Financial Planning: This aims to equip Singaporeans with the skills and knowledge to plan for their long-term financial needs.
  • Tier III - Investment Know-how: This aims to impart knowledge about different investment products and skills for investing.

Five core financial capabilities

The MoneySenseCore Financial Capabilities Framework identifies five core financial capabilities. The capabilities aim to help individuals apply their knowledge and skills across the different tiers of financial literacy when making financial decisions.

The five core financial capabilities are as follows:

  • Understanding money is about having the numeracy skills to evaluate the costs and benefits of options available. It is also about understanding how economic conditions can affect a person.
  • Understanding yourself, your rights and responsibilities is about knowing how personal circumstances, like how much a person earns, his or her age, the number of children he or she has, affect his or her financial decisions. It is also important to know your rights and responsibilities as a consumer of financial products and services.
  • Managing everyday money is about being able to budget, to live within one’s means and to use credit facilities responsibly (e.g. for major items like buying a home).
  • Planning ahead is about being able to put together a financial plan to help one manage one’s resources (e.g. income, debt, savings and investments) prudently.
  • Selecting financial products is about understanding the purpose, features, risks and costs of common financial products (e.g. debit and credit cards, loans, insurance, and investments), the key factors to consider and questions to ask before deciding whether to take up a product.
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