Lessons in finance pay dividends
Investing time and expertise to educate young people in the many complexities of dealing with money can give them a head start in life, says Colin Cardwell
TEENAGERS are notorious for their tempestuous and short-lived relationships, especially with money. Their chaotic finances, and by proxy those of their parents, suggest compellingly that Greece and Portugal – and Ireland and Iceland before them – have in fact been models of financial probity. While adults wryly exchange anecdotes about the “bank of mum and dad” and the wallets and brand new mobile phones carelessly left on the train, teenage finances are a serious issue. Study after study demonstrates a strong link between poor financial literacy and financial hardship and, post-recession, debt is an urgent problem – one that is causing more than a million families in the UK to struggle.
Peter Dean is keenly aware of the issue on a daily basis. The managing director of Glasgow-based Carrington Dean, Scotland’s biggest independent debt solutions business, strongly believes in the need to provide better financial education.
“We see a lot of young people in debt and many of them who are still at school or coming out of school don’t understand how badly things can go wrong – and how quickly.
“If we don’t bridge this educational gap, we are letting teenagers down by failing to educate them on how to make informed choices about their finances.”
This conviction recently led the firm to launch a new financial education programme for secondary school students in Scotland, designed to address a lack of understanding of key personal finance issues and help them handle money more responsibly.
The move followed a unique research project by the firm that gathered the views of 1042 Scots aged between 15 and 17 from throughout the country.
It revealed, says Dean, that 82 per cent of teenagers believe they have not been taught enough at school about personal finance – and an alarming lack of confidence about handling basic documents such as phone bills and bank statements.
Of course, beneath the façade of insouciance, this is a group prone to particular anxieties – doubts about self-esteem and worry about exams – and the Financial Education Report 2014 uncovered another real area of concern: 56 per cent worry about falling into debt themselves and 63 per cent have anxieties about their families incurring debt.
Above all, says Dean, the results confirm the view there is a shortfall in financial education for this age group that needs to be addressed – and despite the scandals of recent years teenagers expressed a belief they could trust banks more than their parents for financial advice.
Dean laughs when asked if it was his own children’s waywardness with money that motivated him.
He says: “No, all three have their own approaches – and one of them is capable of keeping me right. But we get applications at all times of the day from young people who are still staying at home and are very worried