I REMEMBER my first foray into high finance. Once a week my banker would travel to see me, take my money and give me a deposit receipt in return. He banked this money so it could be saved, bear interest and grow until I was a big girl.
I was nine. Only years later did I realise what a wonderful favour that banker was doing me, my classmates and children across Australia, where the Dollarmite account was, and remains, a rite of financial passage – this year almost 100,000 kids are participating. When I ask my friends, now professionals with children of their own, most, like me, remember the Dollarmite account with great fondness.
Learning to earn, spend cautiously and save wisely were habits learnt and developed at a tender age. My parents encouraged the whole family to participate in their conversations at the dinner table about big-ticket purchases and, in dribs and drabs, we were made aware of tax, credit cards and the impact of interest.
At 15 I began work at McDonald’s. I worked hard and was so successful with “Do you want fries with that?” I was awarded a special badge. The badge is long lost but something else remained and grew and continues to do so – my superannuation (pension), compulsorily saved by my employer on my behalf. I was flipping burgers and growing my pension at a time when, without guidance, I’d have been buying that new, shiny, sexy whatever with the cool brand name. I was growing my retirement income before I graduated high school.
Later, Mum took me to a financial planner (IFA) to discuss how the money I made was, and could be, invested and I was introduced to the markets, managed funds and the wonders of the stock exchange. It wasn’t learning, it was my life, and I was hooked.
Reading the papers today, and chatting with friends and colleagues, I quietly despair at the low level of financial capability in Britain and am saddened to learn that many adults have yet to have the experiences I had as a child.
So my company Blackbullion was born. By marrying money management skills with creativity and technology we created uniquely interactive programs to help employees and students take control of their finances. To create personal roadmaps to get from financial phobia to financial security.
Money management has become an increasingly complex maze and many are negotiating this maze in the dark, without a guide. In fact 67 per cent of consumers find choosing suitable financial products too complicated and only 37 per cent are making provisions for retirement on the assumption that the state pension won’t provide a good standard of living. We must change our habits and our approach to personal finance
There is no single solution. We need to raise the financial literacy levels of children before they leave school. We need financially-confident parents who can further emphasise and demonstrate these practical skills in their daily life. We need a workforce that understands the importance of saving for old age and – most of all – we need a cultural shift from “I’m worth it, whatever the cost” to “I’m planning ahead so I can control my own destiny and not have to choose between heating and food.”
Vivi Friedgut is the director of Blackbullion. Find them online at blackbullion.co.uk.