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

The Herald Business - - Fea­ture -

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

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