With young people making up about two-thirds of the country, Cambodia is considered to be one of the youngest countries in the Southeast Asian region. With the country experiencing sustained strong growth, it’s no surprise the Kingdom’s middle-class continues to grow. While the source of income for young people is getting bigger, their financial literacy often seems inadequate.
Um Vuthdara, a lecturer in the Faculty of Economics at Pannasastra University of Cambodia, said youth mainly learn about financial literacy through their peer groups.
He said, “I have asked some relatives of mine why they mostly decide to use ATM Cards. They said it’s because their friends are using them, too. They don’t understand the benefits of the cards or how to manage money. It’s more about the ‘show-off culture’.”
As more gadgets and materials enter the market in Cambodia, more and more young people are diving into their desires.
David Pheng, a content manager at a private company, said he spends almost all of his income on clothes and food.
Vuthdara said young people’s spending habits are influenced by several factors, including friends, media consumption and family.
“I think it’s more about education from their family. Some parents are busy with their business or jobs, and they give money to their children without paying attention as to how their children spend it. They think their children know what to do. This is the problem,” he said.
To resourcefully manage their financial flow, young people need to strike a balance between present consumption and saving up for the future, he continued.
However, as simple as the idea may be, some young people do not consider saving as their priority.
Pheng said he occasionally deposits 10 per cent to 20 per cent of his monthly income of $500 to his Visa savings account.
“I don’t like saving at all,” he said. “I don’t have real goals in the future. I’m just living my life.”
Rith Leakmoneth, a school teacher, is planning to save $50 of his $340 monthly salary, although he had never done it before.
He said, “I never thought about saving. I spend all my money as soon as I get it, but after using up all my money by the end of the month I’m starting to consider saving up.”
His monthly expenses include nights out with his friends and food, while $66 a month goes toward paying for his motorbike, which cost $1,570.
Even though he loses some money through the interest, he still prefers loan instalments, otherwise he could not purchase the vehicle.
On the other hand, Sron Monyneath, a research assistant at the Centre for Policy Studies in Phnom Penh, saves more than 50 per cent of his income to account for future needs, such as a cell phone and other items.
While his saving habits may be better than his peers, he admits he is not as frugal as his parents’ generation.
“I heard that they saved up as much as possible by minimising their expenses. For instance, rather than eating out, they cook their own food, which costs much less. For me, I like eating out more.”
Phan Yum, a worker at a seafood factory, said he earns $100 a month; $50 of which he sent to his children at his hometown and $40 on the rent. He saves the remaining, “in case I get sick and I don’t have any money.” In addition to his stable salary of $100, he can earn an extra $10 to $40 if he doesn’t take any days off.
Seang Sokcheng, a university student, said she put half of her income into savings.
“First, I have an envelope for important cash that I will never touch except for its intended purposes,” she said.
“Also, I create a monthly budget for how much I want to spend on each thing like books, groceries, food, entertainment, and others,” she said. “Then I try to keep tabs on how much I spend every day and compare it to the budget to see how well I’m performing and adjust my habits accordingly.”
Meanwhile, Sokcheng said she didn’t agree with the loan system.
“I don’t think we should ever buy things we can’t afford, especially if it’s consumer goods and products that are usually without any real investment value.”
Similarly, Vuthdara said MFIs were focusing more on profits than assisting those in need of financial aid.
“MFIs’ real targets are farmers, not SMEs or youth,” he said. “In developed or developing countries, MFIs are established to help farmers through rural development. They should be increasing the standard of living by providing loans for businesses in the rural areas,” he said.