Written by Kristen Cunliffe DipPFS CeFC, Director at Red Star Education
At some point or another, every part of our lives will be impacted by our finances, and yet so many people do not fully understand them.
In fact a lot of people actively avoid engaging with their finances. Financial education is still not taught in schools and colleges on a meaningful and consistent basis, with provision being a bit of a postcode lottery.
Financial education is on the national curriculum for state schools, yet there are generally no experts in finance instatedto teach it; and unless the school chooses to engage 3rd party assistance, it is generally left to mathematics teachers to impart this knowledge. Whilst a strong grasp of maths skills can perhaps help with certain aspects of financial management, mathematics and finance should certainly not be conflated. You do not need to be a maths whiz in order to build yourself a strong financial future.
So if we cannot reasonably expect teachers to begin to tackle the world of finance for their students on top of teaching their own subjects should we expect financial advisers to give their services for free?
Financial advisers pass on an understanding of financial topics to each client they interact with by nature of the financial planning process but how many advisers would consider themselves expert in presenting workshops to rooms of teenagers starting with the basics of money management, and covering every topic that plenty of adults wish “they had been taught at school”?
Given that many children and young adults leave school or college without the important life skills to manage their finances, where then is the opportunity to learn them?
Any adviser with an interest in this topic will no doubt agree that the audience is there but without sufficient funding going to the right places, in the UK, we are in danger of missing opportunities to support our young people to learn, and allowing generations of them to enter the workplace ill-prepared for their financial future.
Skills that children and young people can learn from impartial and experienced providers will stay with them allowing them build a solid financial future regardless of income, improving wellbeing, social mobility, opportunity and self confidence. The skills and knowledge are lifelong and learners will take them with them wherever they go, no mater who they are. It should certainly be stressed here that understanding your finances is valuable regardless of wealth or personal circumstance. We all have to pay our taxes and rent, take out mortgages, apply for car insurance, and so on and so forth, regardless of our income. All of us are dealing with these day-to-day financial situations regardless of how much money we have.
On the subject of wealth, we at Red Star Education also clearly convey that financial education is not wealth creation. ‘Get rich quick’ schemes dominate people’s perception of financial services, due to certain groups and individuals espousing that money can be generated quickly through easy investments. We have nothing to do with this; we cannot magic money out of thin air, but what financial education can do is help people feel confident and self-sufficient in managing the money that they do have. Financial education is not just about understanding things like investments, it covers all of the mundane things of ordinary life, like taxes and the weekly food shop. It also extends far further to help with future planning, such as different types of pensions, taking out life insurance, and making a will.
Financial education is of the upmost importance for people’s futures. Financial concerns are one of the main causers of stress and can have massive effects on our financial wellbeing. Therefore, teaching people to understand their finances in a way that is not overwhelming or frightening can be incredibly empowering. It enables learners to start confidently making the decisions which are best for them in their own particular circumstances.
Financial education is becoming more and more important in an increasingly digital world. We can now pay for goods and services with a tap of our phone, we can take use buy-now-pay- later financing to pay for a takeaway, we can gamble on our computers and take out loans on our phones. All of these changes have made it increasingly easy for us to overspend or to at least lose track of what is actually coming in and out of our bank accounts. Now, more than ever, it is imperative that we have the skills and know-how to deal with our finances now and in the future.
We owe it to our young people to get financial education provision right.
