NYA has been involved in financial capability programmes for over a decade now. We believe these programmes can make a real difference to young people’s lives but we need to be realistic about what they can achieve.
We know that financial skills are particularly valuable at key life points such as starting your first job or leaving home. It’s not surprising – these are the moments when a basic knowledge of financial products and services is more than an academic exercise. And being able to write a simple budget can help you work out how much money you’ll actually have at the end of the month to pay your bills.
But we also need to remember that having some financial knowledge doesn’t necessarily mean you are better at managing money. You may know how a credit card works (or be one of the few people who understand APR) but you may not have the will power to resist spending what you don’t really have.
We should also remember that those who have less are often much better at managing money than those who have more. Some commentators on financial inclusion fall into the trap that assumes debt is an indicator of poor financial skills yet it may be a very logical response where there is no alternative (we live in an era where the majority of young people studying for a degree graduate with about £45,000 of debt).
Finally, our attitude to money reflects how we feel about ourselves. Why else would people take themselves off for some ‘shopping therapy’? If we are going to help young people build their financial knowledge and skills at these key moments then we need to ensure the right people are available to them. We have high expectations this can be achieved through financial education in schools but shouldn’t we be looking at how we can help youth workers to do this too?