More money, more problems?

While many would be in agreement with the legendary rapper Notorious B.I.G. who sang that “the more money we come across, the more problems we see”, I would be inclined to respectfully disagree.

While I can follow the logic behind his hypothesis, I would argue that our problems are not actually caused by the amount of money we have, but more so by our ability to manage it effectively.

The UK is falling behind

Despite money clearly being an integral part of our lives – dictating most decisions that we will make as adults – financial literacy in the UK is shockingly low.

According to a study by the UCL Institute of Education and the University of Cambridge, adults in England and Northern Ireland performed worse on everyday financial numeracy tasks than adults in many other developed countries. What’s more, those in the 16 to 24 age bracket scored particularly poorly in comparison to their international peers.

It is perhaps unsurprising then that a recent survey of 1,600 children by Beano Studios found that only a quarter (27%) actually enjoyed learning about money, with girls even less likely to enjoy such lessons compared to their male counterparts (19% vs. 34%).

And yet it is widely accepted that these formative years are key when it comes to developing positive financial habits and building a basic understanding of personal finance – so what can we do to buck this trend and engage young people around such vital topics earlier on in life?

Leveraging the online world

According to the Beano survey, the top three ways children believe learning about money could be made more enjoyable include using jokes and fun tools, incorporation of games, and the use of ‘real’ money in ‘real’ situations.

While the use of jokes and games in relation to such an important topics might seem unorthodox to some, many businesses are already exploring ways in which they can support the financial development of young people via gamified savings apps and online piggybanks.

One such provider is Rooster Money, a pocket money app used by hundreds of thousands of families across the world to help children learn about money between the ages of 4 and 14.

In addition to providing fun, practical tools to introduce young people to fundamental financial concepts, the business also offers a breadth of online resources for both parents and children to help them learn together.

Education = empowerment

While it is clear that financial literacy must be improved across the board in the UK, there are several sub-sections of the population that are in particularly dire need and while we’ve all heard more than enough about the dreaded C-word this year, the effect the pandemic has had on the finances of thousands across the country cannot be ignored.

Those from disadvantaged backgrounds, migrants and women are among those most in need of additional financial education to help manage their finances over the course of their lives.

It is here that accessible resources – not those solely targeted at children – are vital and they can come from a myriad of providers.

The Financial Times, for example, recently announced the launch of its Financial Literacy and Inclusion Campaign to deliver “clear and compelling content on basic financial subjects, and work with partners to make sure the information reaches people who need it most”.

Elsewhere, Ufi VocTech Trust, a grant-funding body committed to promoting digital technologies to support adult learners gaining vocational skills, and National Numeracy, a charity committed to improving numeracy across all age groups, recently launched a two-year project to help adults develop their financial literacy skills by making it more accessible to those who lack time, computer access, and confidence to do so.

Such initiatives are undoubtedly fantastic and will make a marked difference to many people’s lives. However, more can and must be done.

Financial services firms, media outlets, regulators – even communications agencies – all have their role to play in the education of the nation and improvement of its financial literacy and its key that we do so sooner rather than later.

Kaj Sahota, Account Director at Instinctif Partners