Financial issues are always in the news and papers. From people being mis-sold PPI, to payday loan companies charging over the odds, there always seems to be a story floating around about someone’s unfortunate financial situation. Following a number of studies and investigations, the reasons could be due to a concrete lack of understanding of the 21st-century financial climate.
More and more people are being told to avoid finance at all costs, regardless of the circumstance, although it’s importance to understand the difference between good and bad debt. It’s been revealed that 4/10 adults have admitted to not being in complete control of their money. This number includes over 21 million UK families that have less than £500 in savings. It gets even worse with 2/5 adults not having any long-term assets such as property or a pension and approximately, 8.2 million adults in the UK suffer from financial instability, causing worry.
These alarming statistics bring to mind the importance of developing a financial understanding early on. A positive attitude to spending, saving, borrowing and wealth creation can be developed at childhood, and refined over the years. With more financial opportunities to borrow and spend than previous generations, we’re more exposed than ever and less informed than ever. Due to the shift towards an increasingly cashless culture, a lot of children grow up today with no real understanding of coins, paper notes or a true appreciation of their value.
As they grow, this problem only worsens as teenagers need to start thinking about student loans and other financial decisions. Without a comprehensive understanding, they can be placed in quite a vulnerable position. Since its introduction to the national curriculum in 2014, up to a worrying 70% of students will leave formal education without ever receiving a single full lesson on personal finance.
This is something we feel needs to change. Children need this knowledge embedded from an early age to develop and healthy financial culture and appreciation of its value. There would be reduced money worries and people would be able to borrow in more financially stable circumstances.