Thais have very poor financial management skills

[webfact]

Research: Thais have very poor financial management skills

BANGKOK, 1 May 2014 (NNT) - Thais have scored very low in regard to their financial management skills, according to Piyabutr Chonvicharn, Vice-Chairman of the Kenan Institute Asia.

Mr. Piyabutr cited a recent survey by the Bank of Thailand and the Finance Ministry as showing that three groups of people most at risk in piling up on debt were students, low-income people, and farmers. Shockingly, they make up at least 70 percent of the Thai population. He said that their poor spending habits resulted in higher household debts, which had risen from 55.6 percent in 2008 to an alarming 82.3 percent in 2013.

To deal with this problem, the Kenan Institute and the City Foundation have joined hands in a 3-year campaign to educate these groups of people, especially students. The survey showed that the latter group’s excessive spending habit was influenced by commercial advertisements on mainstream media.

Meanwhile, Mr. Teera Phutrakul, the Chairman of the Thai Financial Planners Association, stated that at least 90 percent of Thais neither keep a record of their income and expenses, nor take the initiative to manage their finances. Therefore, he said it is an important agenda to fix this kind of attitude in order to let the country move forward.

Lastly, Mr. Ratchapol Laovanitch, the Managing Director for Miracle Creation also stated that the media should play a more important role in educating Thai people on how to manage their finances.


-- NNT 2014-05-01

[madmitch]

Lastly, Mr. Ratchapol Laovanitch, the Managing Director for Miracle Creation also stated that the media should play a more important role in educating Thai people on how to manage their finances................................................................by making a TV programme that the poor people can watch on their newly aqcquired 42 inch smart TVs.

[ikke]

They choose the wrong date for this joke , one month late, as first of April is fools day.....

[jamstock]

So do most people in the West...

[Jip99]

Thai ladies know more about fractional reserve banking than many in the west!

They quickly learn that if they have 1,000 Baht available each month, and have some gold, they can raise 30,000 Baht at the pawn shop.

[thaipod]

Another campaign going nowhere. In one ear and out the other.

[winstonc]

easy available credit is the problem...surely....

[impulse]

If their financial skills are so poor, how do they live here on 9,000 baht per month when most of us would starve to death on less than 5-10x that amount?

[Fookhaht]

If their financial skills are so poor, how do they live here on 9,000 baht per month when most of us would starve to death on less than 5-10x that amount?

Speak for yourself.

Financial management is all about how much you spend, not how much you make.

[Costas2008]

"Thais have very poor financial management skills"

Live for today, forget about tomorrow.

This is the Thai motto.

Have to admit, very good in getting the money, but not often to repay.

[bulekee]

If their financial skills are so poor, how do they live here on 9,000 baht per month when most of us would starve to death on less than 5-10x that amount?

Speak for yourself.

Financial management is all about how much you spend, not how much you make.

It"s also about how much you have in ready cash.I have just spent 40k today for my daughters schooling.No problem I knew I had the money.I am not an economist,but I have always lived within my means.

[CanInBKK]

In all fairness the lending system here can be tricky to anybody not familiar with Finance 101 - 3% for a car loan sound good to you? Better check if it's APR or not otherwise at 60/72 months you're paying way more than you ever thought you were.

[impulse]

If their financial skills are so poor, how do they live here on 9,000 baht per month when most of us would starve to death on less than 5-10x that amount?

Speak for yourself.

Financial management is all about how much you spend, not how much you make.

Try telling that to someone making $1 a day. No matter how frugal they are with that dollar, sooner or later they're going to find themselves in financial trouble as globalization drives up the cost of even the most basic foods and other necessaries- like schoolbooks, medicines, cooking oil, and on and on.

We get all full of ourselves if we can set aside 10-15% into savings each month, (spending only 85-90% of our western salaries). So, in effect- we spend about 10-20x what these folks spend- and they're the ones who can't manage their finances?

BTW, I live here on exactly 8.8% of my base salary. But I couldn't come close to living on a Thai laborer's salary- so I have tremendous respect for the Thais and a lot of disdain for the broken system that lures them into debt.

Edited May 1, 2014 by impulse

[trogers]

Thai mentality is often driven by the id, and not the superego. Management is a function of the superego.

Thus, you see the many cases of getting into debts just for the sake of consumption.

[draftvader]

There is a great deal of pressure placed onto the consumer in Thailand by the policy of upping the prices for 3.5 weeks in the month then offering the true price for 3-4 days as an amazing "discount". Unfortunately the Thai/Asian consumer necessity to detail how you got a better price is to blame here rather than the suppliers.

The big change, as detailed before, is readily available credit. There are PLENTY of people in Thailand that can afford a lot however there are a LOT more people acting like they can. One day somebody's going to say "I need my money now" and there is going to be a problem. Basically the same thing that happened in 2008 in the US & Europe. The problem is that the level of credit worthiness has not been well assessed in Thailand so there are a lot of people borrowing many multiples of their wage without any thought/guidance.

[Fookhaht]

If their financial skills are so poor, how do they live here on 9,000 baht per month when most of us would starve to death on less than 5-10x that amount?

Speak for yourself.

Financial management is all about how much you spend, not how much you make.

Try telling that to someone making $1 a day. No matter how frugal they are with that dollar, sooner or later they're going to find themselves in financial trouble.,.,

A very common example of going to the extreme to make a point. What major labor group in Thailand makes a dollar a day?

I'm not referring to abject cases of poverty, I'm referring to the average Thai laborer and above.

I took a 95% cut in salary to move to Thailand, and made about 10,000 baht a month here during my first year--exactly the wage of entry-level workers who just graduated from college or university. I had no trouble living within my means.

I again reiterate: it's not how much you make; it's how much you spend that reveals your ability to manage finances.

As to needing large reserves of cash, the Thais have quite a good system of safety nets among friends and relatives for meeting sudden cash needs without resorting to credit card or bank debt.

Those who get into deep bank/card debt are those who consciously choose to do so. They've decided to break out of the old ways and do it like the West does (mistake).

Therein lies the problem expressed in the OP.

Edited May 1, 2014 by Fookhaht

[tullynagardy]

I again reiterate: it's not how much you make; it's how much you spend that reveals your ability to manage finance

It's a lot easier to live within your means when your salary provides a living wage. In the UK the minimum wage of £12k a year is enough to provide rent, food and utilities with something left over to spare for entertainment. Here it isn't.

Ps how the hell did you get a visa if you earn 10k baht a month!?

[american12bthai]

Well, when the youth are taught to give their money to alcohol companies, brothels, or spending it at the nearest shopping center ...duh.

give your friends 100% leaves you with nothing. instead of the city spending on youth projects they are shutting them down. Instead of spending money on the performing arts the minister of culture STEALS IT. I know it, they know it. DOGS KNOW IT.

and in the future when all their children are facing problems they will not ask for handouts. they will take it. violently. ... not many countries left where the rich rub their wealth in the faces of the poor. kidnappings and ransoms are coming and you cant prepare for them.

[american12bthai]

I again reiterate: it's not how much you make; it's how much you spend that reveals your ability to manage finance

It's a lot easier to live within your means when your salary provides a living wage. In the UK the minimum wage of £12k a year is enough to provide rent, food and utilities with something left over to spare for entertainment. Here it isn't.

Ps how the hell did you get a visa if you earn 10k baht a month!?

prob like me, hes not white.

[justjoined]

When I was young my primary school signed everybody up for bank accounts and parents would give there kids a little every week to teach them about savings.

In Thailand it's the opposite, parents give their kids money to spend daily. Even though meals are often provided, teachers encourage kids to bring cash, possibly because they profit from the rubbish food sold in schools.

Furthermore, they way money is 'shared' in families is a disincentive to savings, as family members feel entitled to cash they didn't earn.

It would be interesting to see a breakdown of spending habits among the poor, I suspect smart phones, beauty products and entertainment would be high on the list. The min huge raise in the min wage should see an increase in savings, instead it's led to record debt levels.

[impulse]

I took a 95% cut in salary to move to Thailand, and made about 10,000 baht a month here during my first year--exactly the wage of entry-level workers who just graduated from college or university. I had no trouble living within my means.

If you took a 95% cut in salary to move to Thailand, one of 2 things happened:

Either 1) You had a pretty nice nestegg to tide you over when you got here- in which case, you did not have to count on your salary alone.

Or 2) You didn't have a nice nest egg, in spite of earning 20x the typical Thai laborer's salary "back home", meaning you had squandered quite a bit.

Once again, it's easy for people who have comfortable incomes to point at those living on the fringes as irresponsible, and poor money managers. Right up until the time a loved one needs $500K worth of health care, or Jimmy Jr gets accepted into Harvard, or Daddy's company goes bankrupt (and the CFO absconded with the pension fund), then out come the credit cards.

Most of us make plenty to survive, have some fun, send the kids to school and still have enough to watch the nestegg grow. But I don't pass judgment on folks that make just enough that they can either pay the rent, buy food or pay for Jimmy Jr's dental work (pick one and only one this month- the rest will have to wait 'til next month). That includes Thais, Americans, Europeans, or Martians.

I haven't walked far enough in their shoes...

[ggold]

There is a great deal of pressure placed onto the consumer in Thailand by the policy of upping the prices for 3.5 weeks in the month then offering the true price for 3-4 days as an amazing "discount". Unfortunately the Thai/Asian consumer necessity to detail how you got a better price is to blame here rather than the suppliers.

The big change, as detailed before, is readily available credit. There are PLENTY of people in Thailand that can afford a lot however there are a LOT more people acting like they can. One day somebody's going to say "I need my money now" and there is going to be a problem. Basically the same thing that happened in 2008 in the US & Europe. The problem is that the level of credit worthiness has not been well assessed in Thailand so there are a lot of people borrowing many multiples of their wage without any thought/guidance.

When the government help people to get into debt with populist 1st car schemes etc. Then that entices people into debt! Even with the rice farmers, how many rushed into debt thinking they were going to be able to afford to pay back that debt with inflated prices they were going to get for their rice!

But as said by someone else, most Thais only think for today, tomorrow can take care of itself! Forward thinking is not a strong point. Though you would hope a government would be more responsible than helping it's citizens get deeper into debt.

[Jip99]

Thai mentality is often driven by the id, and not the superego. Management is a function of the superego.

Thus, you see the many cases of getting into debts just for the sake of consumption.

Simplistic, but spot on if gamblimg is included in consumption.

[tullynagardy]

I again reiterate: it's not how much you make; it's how much you spend that reveals your ability to manage finance

It's a lot easier to live within your means when your salary provides a living wage. In the UK the minimum wage of £12k a year is enough to provide rent, food and utilities with something left over to spare for entertainment. Here it isn't.

Ps how the hell did you get a visa if you earn 10k baht a month!?

prob like me, hes not white.

So when applying for a visa if you aren't Caucasian the rules differ? Must have missed that bit

[JoeThePoster]

Research: Thais have very poor financial management skills

Would be believable, but are their research skills any better ?

Edited May 1, 2014 by JoeThePoster

[hidavey]

They're just like all low income people around the world. Doesn't matter where you are, this is what they do. Sorry to say.

[zydeco]

Like my wife says about the credit cards: "They're great. All you need to do is sign a piece of paper, and they give you things."

[Lupatria]

I would like to see the campaign considered fit to cope with the itch of buying a new i-phone, LCD-TV or pickup truck on credit beneath the morons clued to the screen and fed with Thai soap operas 24/7 showing how posh the lifestyle in Bangkok is with maids, marble floors a fleet of luxury cars and houses bigger than their local hospital.

[Arjay]

Meanwhile the Shinawatra's are rolling in dough...

[stickylies]

If their financial skills are so poor, how do they live here on 9,000 baht per month when most of us would starve to death on less than 5-10x that amount?

oh but plenty in the group u mention FAIL bigtime and have others (family, friends) paying for some stuff or get into more financial problems... the other day a friend of mine paid +/- 2000 thb clearing a debt from his (older) brother.... in case u wonder, i live on 20.000 THB