Time and time again people tell me how little they understand about money, a matter that consumes such a major part of our lives and helps us to achieve our goals. It has been reported that money worries have topped a poll of the biggest triggers of stress in the UK1*. Many people claim they wish they were taught about finances at school but it has only been part of the National Curriculum since 2014.
For example, statistics reported*2 last year are alarming: In 2017 around 6.5 million adults in the UK had no cash savings. Also, with those aged 18-24 having the lowest average amount saved.
A charity carried out a survey to see what people’s understanding of finances was and the results were as follows:
17% of under 35’s thought that the bank of England base rate was over 10% (it was 0.75%)
14% of under 35’s think it is better to start saving for a pension in your 50’s rather than 20’s (this will make it much harder to save enough).
43% of under 35’s don’t understand that inflation of 5% would erode the purchasing power of money in a savings account which pays 3% interest.*3
So does a lack of financial understanding lead to stress?
Well, perhaps a good question for people to start with would be, “If your income was to stop tomorrow, for example due to sickness or redundancy, how would you survive?” A good education in finances could help people to plan to make sure they are prepared for these kind of dilemmas.
So what would our advice be, if you want to achieve a better understanding of this subject?
The first step would be to seek help. At Monetary Solutions we offer a free without obligation consultation, which an individual can utilise to help educate themselves on what’s available.
*1Independent 28th May 2018
*2Statista 5th Nov 2019
*3Money Charity 15th January 2020