Financial skills are just like other skills in that they have to be learnt. Nobody, no matter how successful, was born a financial genius.
Not even Warren Buffett, the self-made billionaire investor, knew a lot about financial management when he was young.
He developed the skills that built his success much later in life, and so can we.
Developing sound financial skills is worth the time investment, as they enable us to improve our lifestyles and make them more sustainable. They are a way to counter the negative financial stress that many of us feel over debt.
The argument for improving financial literacy does not need reinforcement. With 60 per cent of Emirati families spending about a quarter of their monthly income to repay debts from credit cards and personal loans, and one person in five using a credit card to make personal-loan repayments, we need to address this issue before it gets out of hand.
Many are suffering under financial turmoil today, and financial literacy is the key to relieve that stress.
To become more financially literate, we need to have two things in place: the skills to correctly interpret financial offers, and relevant information to compare the attractiveness of the offers.
First, we need to ensure that we have the necessary skills to correctly interpret our existing financial commitments and any new offers. Public and private initiatives are under way to improve our skills in this area. The National has previously reported on some of these initiatives, such as the drive to help Emiratis to spend wisely and a project that aims to help UAE Filipinos make the most out of working overseas, that aim to improve our financial skills.
Second, we need information on the options available to us. Our ability to make the correct decisions is directly related to our access to accurate and unbiased information. Without transparency, our financial skills are very difficult to apply in practice - the ability to read does you no good if you spend your days in an empty library. Applying financial literacy is no different, in that you need to have information to interpret if you hope to make use of your skills.
It is currently quite difficult for the average consumer to quickly get an overview of financial offers available to them, especially when it comes to home loans, which are usually the largest source of debt in a consumer?s life. Transparency in this area has a long way to go, and we are committed to clearing the haze obscuring the information.
The mortgage map is dedicated to the same goal of financial transparency. The mortgage map will organise information in the home loans market and help all residents to better understand the cost of their mortgage.
The map is an online interactive tool based on Google Maps, and it allows for a crowd-sourced comparison of both conventional and Islamic home financing terms across all areas of the UAE.
The data is provided by consumers who hold mortgages, and the general information can be viewed at the site. The National will continue to publish insights drawn from the data submitted by users to shine a light on mortgage terms in the UAE, and together we will create the books required for our users to be able to apply their financial literacy skills.
We believe this to be an important step to improve financial literacy in the UAE and look forward to serving our readers and the wider community by covering the mortgage market in the coming year.
Stefan Thorén is one of the entrepreneurs behind the website Pecunia.me, from the Latin word for “money”. In partnership with The National, Pecunia.me aims to create transparency so that consumers get access to essential information before making important financial decisions.