Debt Advisory Centre
(Poradna při finanční tísni)
Do you know how much bread costs? Or the new Skoda Octavia? Have you ever borrowed money because you discovered that your pocket was empty? Are you able to explain what a mortgage is? We also asked children and young people these questions.
Young people are not lacking in self-confidence when it comes to money management. According to financial literacy research undertaken among young people aged 12-25, which also came to the attention of the media, up to 50% of the respondents aged under 15 were of the opinion that they knew how to manage money. It is, however, positive that the desire for financial education has increased and that the role of schools has also grown.
They know the prices for an iPhone 6, a litre of Natural 95 unleaded petrol or a two-litre bottle of Coca-Cola[GK1] . However, the teenagers’ knowledge of the price of bread, eggs or even a week’s stay at a guesthouse in the mountains in the Czech Republic were at the other end of the scale. Financial literacy is, however, higher in those who have passed through our Financial Freedom financial programmes and the Secret Journey interactive online game.
Financial literacy is also an important topic for the Erste Foundation. As such, the unique interactive Erste Financial Life Park (FLiP) project, which is supposed to awaken young people’s interest in finance in a fun way, was officially launched at the Viennese Head Office of the Erste Group on Friday 28th October. FLiP gives young people information using modern technology over an area of 1500 m2.
How did the financial research stack up in figures?
- Up to 50% of young people under the age of 15 believe that they can manage money, compared to the previous research from 2013, where the result was slightly lower.
- The motivation to gain an education in financial literacy has increased in children aged 12-14.
- According to the research, young people have enough information about finances.
- Parents remain the main source of financial literacy, but their influence decreases with age and the individuals’ interest in further sources of information rises.
- On the other hand, young people over the age of twenty consider their bank and their advisor to be a serious source of information.
- Social networks play a greater role for individuals aged 15-17 than for those aged 24-25. The influence of social networks has also increased among younger people.
- Conversely, the media, specifically newspapers, is experiencing a decline, as its influence as a source of information has diminished.
We offer a helping hand to those who have got into financial difficulties. And we have long supported the teaching of financial literacy to make sure that they do not get into such difficulties in the first place. Poradna při finanční tísni (Advisory Service for People in Financial Difficulties) is a non-governmental, non-profit organisation for the provision of professional assistance to people in the area of financial management and to people in financial difficulties. It was established in 2007 and Česká spořitelna and the Association of Czech Consumers were its co-founders.
Poradna při finanční tísni in figures:
- 9,710 new clients
- 284 hours spent on the phone
- 1,090 processed debt relief applications
- an average of 809 clients per month
Debt Advisory Centre
(Poradna při finanční tísni)
We can offer a helping hand to those who find themselves in financial trouble. And so that they do not find themselves there, we have been running a long-term project for financial literacy education.
The Debt Advisory Centre is a non-state, generally beneficial non-profit organisation for the provision of professional help for managing finances and people in financial crisis. It was founded in 2007 and Česká spořitelna, together with the Czech Consumer Association, were its first founders. The costs related to the provision of a direct service to people in trouble are also paid by ČMSS, ČSOB, KB, RB, Stavební spořitelna ČS, UniCredit bank, HomeCredit, the Erste Stiftung Foundation and the Faculty of Business Administration of the University of Economics.
- In 2015 our advice centre received 11,129 new clients and processed 1,422 applications for debt relief related to personal bankruptcy.
- In 2014 over 800,000 foreclosures were recorded.
- In 2015 the advice centre staff registered 10,559 calls to its toll-free green line. The total number of clients who have been served in the duration-period of the advice centre as of the 31st January 2016 is a respectable 84,420.
- Of the total number of foreclosures that took place 55% were of women and 45% of men.
- Foreclosure most commonly affects clients who are between 31 and 40 years of age.
- Behind about a third of the foreclosures that are ordered are small debts in the order of several hundred crowns, such as penalties to the transport companies or to the municipal police, unpaid community charges for waste collection or unpaid penalties owed to health insurance companies.
We support financial literacy and therefore we organised a survey on this topic. The level of financial literacy in the Czech Republic has not changed significantly in the last three years; it increases with age and it is best during the working age, while in older age it decreases again. Over the last three years the number of people who could have managed, without income, to finance a household for more than three months decreased significantly. Financial literacy is neither growing nor decreasing. The most vulnerable group are people with less education and with lower incomes. These, however, lack any interest in education. The less that young people know about finances the less they feel that they need to educate themselves about this topic. In the 18-25 age group two-thirds of them do have experiences with loans. A fifth of all people surveyed address adverse situations, while almost half of them cannot cover even a period of 3 months from their reserves. People regard their nearest and dearest and the bank as their main sources of information. Those at a higher level, both of education and of income, will consult a financial advisor, look through newspapers, or search on the Internet. People perceive the largest gaps as being in the areas of investing, mortgages, loans and credits. It is mostly young people of 15-19 years of age, those with a lower income and without a university education, who express a need for advice. Overall, nearly 40% of the population would not need advice in any area.
A part of a the comprehensive educational programme entitled Dnešní finanční svět (Today’s Financial World) that we implement together with Terra-Club, is an interactive game entitled Financial Freedom. It represents a unique didactic tool for providing education in regard to financial topics that relies on its experiential aspect. Based on its simulation of real-life situations, children are taught the basic principles of financial management in an understandable and readily digestible form. In 2015 more than 101 schools throughout the Czech Republic became involved with our Financial Freedom. Due to the high degree of interest it evoked and the popularity of the game the level of financial literacy has already increased in 233 schools.
„The biggest benefit was that I obtained a professionally built, didactically stimulating object which - I believe - will present the issue of personal finances to students in an interesting manner. For me it addresses the issue of motivation (which is sometimes a problem in teaching economics) at a high level. The actual workshop – a very friendly tutor, a great atmosphere, it was worth passing it.” Martin Puskely, Jan Šabršula Grammar School, Orlová
The basic building material of the Dnešní finanční svět (Today’s Financial World) programme are the school atlases with the same title, which are used for teaching financial literacy at primary and at secondary schools. They exist in both paper and electronic form. The curriculum also offers workshops for teachers.