Building financial savvy takes time, so the most effective money managers collect knowledge over the course of a lifetime. Without a base to build on, however, complex financial matters can be hard to understand. And with so much at stake, even the slightest missteps can spark drastic consequences for your ongoing financial stability.
Wherever you stand in your personal financial evolution, there is always room for improvement. Money charities and other resources are available to help boost your understanding. But are young people getting proper exposure to financial concepts?
While moves are under way to strengthen savvy across the UK, some household money managers are still at a disadvantage, catching up on the basics. And since financial conditions and best practices are forever in flux, even the most seasoned financial handlers benefit from updates and fresh perspective.
Young People and Financial Literacy
Doing maths is a big part of early education, but the theory and practices formally taught in schools haven’t always translated into financial lessons. It often isn’t until later in life that your early understanding of math principles carries over into your financial life. Ideally, you’d have a better grip on money matters, at an earlier point in your financial development, but it isn’t unusual facing questions along the way. In order to close the knowledge gap experienced by many Britons, a national initiative strives to reinforce well-rounded understanding among students.
As part of citizenship education, personal finance became a regular part of the National Curriculum, starting in the fall of 2014. The effort first cements thorough financial understanding among educators, enabling them to pass on vital knowledge to their students. A moneywise campaign, Get Financial Education Working, calls upon parents and others to get involved too, reinforcing money lessons and heightened awareness about financial matters.
Despite the enhanced focus on instilling financial lessons, 2016 research published by Financial Services Compensation Scheme illustrated millions of children lack experience with money. In fact, at least a quarter of kids were shown to have no exposure at all, with 27% of adult respondents sharing that they don’t give children under 12 their own money or reward them for doing household chores. So what’s the big deal?
Approaching adulthood without a knowledge base presents unfamiliar conditions that young people are not prepared for, potentially putting them at financial risk. At the same time kids are growing up without adequate levels of financial education, economic challenges are making it harder for young people to get ahead. The education deficit poses challenges as they manage debts, assets, and personal risk management.
Building Savvy Amidst Changing Times
Finding your way to financial stability is an ongoing quest, so you can’t turn your back on your finances and still expect to achieve success. The decade-old financial crisis may be behind us, but many noted changes are still unfolding across the UK. The Bank of England’s recent interest rate increase, for instance, comes on the heels of many years without a move. As a result, a substantial share of young people haven’t experienced such an increase during their adult lives. Without education or first-hand knowledge to guide them, these young Britons may fall victim to distress, resulting from higher credit costs.
Young Brexit Britons could also run into difficulties as the transition poses questions and uncertainty, surrounding their finances. Already burdened with high inflation and lagging wages, changes to the financial system place a disproportionate strain on young people, without the reserves and wherewithal to adjust unscathed. To avoid getting caught unprepared, every resident is urged to continue their financial education beyond school age, using every available resource to demystify personal finance. Debt charities, Readies and other online references, as well as social initiatives promoting greater financial understanding are all good places to look for the financial answers you need.
It’s clear we haven’t yet reached a point where formal schooling provides an adequate personal finance education. Though steps in the right direction paint a brighter future for financial development, at an early age; your ongoing success managing money calls for a long-term commitment, sorting out the financial particulars of your life.