Financial Literacy Education

[Rebecca]

Hello to the Swiss FI community!

I have observed that the level of financial literacy is low amongst some people living in Switzerland. As an immigrant woman I tend to interact with a lot of other immigrant women and am sometimes shocked at how some of these women do not understand the basics of personal finance and how to effectively use the Swiss banking and retirement systems. Many of these women (or their husbands) are low-income earners and live paycheck to paycheck. Sometimes they are are housewives or mothers who do not work outside of the home. This family model is fine for many couples but unfortunately can lead to economic dependence and in the worst case scenario financial abuse.

The lack of financial literacy in vulnerable sections of the immigrant population in Switzerland was noticed by some researchers back in 2016:

Financial literacy is substantially lower among low-income and less-educated respondents, immigrant and non-native-speaking respondents, as well as among female respondents.

Source: Ackermann, Nicole & Eberle, Franz. (2016). Financial Literacy in Switzerland. 10.1007/978-981-10-0360-8_23.
Retrieved from: https://www.researchgate.net/publication/306357155_Financial_Literacy_in_Switzerland
The book chapter cited is 9 years old but may still be relevant.

I am considering volunteering to teach personal finance workshops and courses to other immigrant women and possibly other populations of people living in Switzerland. One route is to create my own personal finance curriculum. However, I do not want to duplicate existing efforts by designing a curriculum if it already exists.

Please reply if you have any information about the current financial literacy education offers in Switzerland:

• Programs, organizations, religious groups, governments etc. offering financial literacy education
• Target groups for educational offers
• Course language(s)
• In person vs. online
• Location or region for in person events
• Cost (hopefully many courses are free)

Thank you in advance for your feedback!


****** UPDATE ******

While searching for a budget app that is oriented towards Switzerland I found this Budget-App from Dachverband Budgetberatung Schweiz. I downloaded the app and it looks simple and easy to use but I haven't explored it thoroughly. The app is available in German, French, Italian and English.

The Dachverband Budgeteratung Schweiz organization offers free online courses to learn how to create a budget (in German). I'm interested in taking the "Ausbildung zur diplomierten Budgetberaterin / zum diplomierten Budgetberater" course. But first I'll need to improve my German.

 

[Baptiste Wicht]

Hi Rebecca

This is an excellent point. And it's definitely not only for immigrant. In general, I have observed that financial education is poor in Switzerland. I think it's because we live a comfortable life and trust our bankers. As a result, we delete all financial decisions instead of learning. This is quite sad, but is real.

It's a great endeavour!

I am not aware of any great course in this case that is not for profit.

Baptiste

 

[Max]

Please reply if you have any information about the current financial literacy education offers in Switzerland:

• Programs, organizations, religious groups, governments etc. offering financial literacy education
• Target groups for educational offers
• Course language(s)
• In person vs. online
• Location or region for in person events
• Cost (hopefully many courses are free)

Fintool is a partially free online video library on financial education in German (they have a YT channel). The also sell books and, I think, sometimes Prof. Heri gives lectures.

 

[Rebecca]

Hi Rebecca

This is an excellent point. And it's definitely not only for immigrant. In general, I have observed that financial education is poor in Switzerland. I think it's because we live a comfortable life and trust our bankers. As a result, we delete all financial decisions instead of learning. This is quite sad, but is real.

It's a great endeavour!

I am not aware of any great course in this case that is not for profit.

Baptiste

Hi Baptiste.

You raise some interesting points regarding the connection between Swiss culture and financial education. Do you think that many people in Switzerland trust their government, financial and retirement systems to such a high degree that they just assume they will be comfortable after they retire?

I grew up in the United States and lived there the majority of my adult life. While the US does have a social safety net it is not nearly as generous as many European countries. Employment based pensions are a relic of the past and these days mostly only retired government employees have them. Therefore it is imperative that people fully utilize the retirement savings and investing accounts available. Unfortunately some people do not have the financial means or foresight to adequately prepare for retirement and end up living in poverty if they rely solely on social security. ("Social Security" is roughly equivalent to the AHV 1st pillar).

You mentioned in another thread that many people are not capable of handling their retirements savings planning. Although the Swiss retirement system is inflexible it does provide some security because the 1st and 2nd pillars are mandatory. Social Security taxes are mandatory in the US just like Swiss AHV taxes are obligatory. But a weakness of the US system is that the approximate 2nd pillar equivalents are voluntary and not mandatory as they are in Switzerland. This means that people make stupid mistakes like not contributing enough money to their 401k retirement savings accounts to take full advantage of their employer's matching contribution. (According to this article 34% of employees make that mistake.)

In the US people who earned the same amount of money can end up living in poverty or relative comfort depending on how they managed their expenses and invested their retirement savings. This means that there is tremendous responsibility on the individual to sufficiently plan for their retirement. This responsibility involves risk but also opportunity. This is why I think the financial independence movement originated in the US and is gaining popularity there. Americans witness their relatives, friends, and neighbors retire early. We know achieving financial independence is possible because we often have several role models to emulate. Some of the early retirees I know were small business owners but others had regular jobs. The only thing these people did differently than others is that they lived modestly and invested wisely.

People living in Switzerland are uniquely positioned to achieve financial independence because disposable incomes here are amongst the highest in Europe. For the stats about this please see the section "Distribution of income in European comparison" from the Federal Statistical Office.

Yet when I talk with people with incomes that should be more than sufficient to achieve FI they sometimes look at me like I'm delusional. FI doesn't seem to be really mainstream here at least in my experience. This is why I want to contribute to financial literacy education in Switzerland. There seems to be a huge knowledge gap that needs to be met. Financial literacy has the potential to greatly improve so many people's lives.

“If you understand money, life is incredibly easy. If you don’t understand money, life is incredibly hard.”

- "Quit Like a Millionaire" by Kristy Shen and Bryce Leung