The recent global recession has created a barricade for numerous young people, mostly between the ages 18 and 30. This “Gen Y” does not have adequate assets to divest or invest. They are merely left with student loans, bank accounts and credit cards. Thus it’s important that we restructure our financial systems for long term and sustainable profits by taking account of social consequences. There is also a strong need for providing education to our children to make them understand how money actually works.
Perception of the Disillusioned Youth
The financial crisis has left several young people disappointed by what they believe to be the self-interested banking industry. This was observed in 2 surveys conducted recently. According to James Vaccuro, head of strategy at the Triodos Bank, a recent qualitative study conducted by the bank shows that most respondents under the age of 30 used the words, "self-serving", "impermeable", "unethical", "unaccountable" and "unscrupulous" while describing banks.
The Green Alliance, which is conducting an ongoing research, also observed a similar outlook. The research reveals that many in this age group have high level of skepticism and mistrust for the banking industry. The Head of Sustainable Business for the Green Alliance, Will Andrews-Tipper, said “This is the generation that were leaving school or university as the financial crisis hit, so it is perhaps not surprising that safety is a key priority, which they associate with larger institutions”.
He also added, “They know they need bank accounts, credit cards and mortgages – but there is no real trust or warmth for the big banks that provide these services. As a result they are disengaging when it comes to personal finance, and are not taking an interest in what other options might be open to them”.
Financial Education – The Key Solution
Industry experts believe that the key to changing this perception and developing the scenario is education. Thus the Personal Finance Education Group (PFEG) and Martin Lewis, Founder of moneysavingexpert.com, have initiated a campaign which will ensure that our children learn more about money and how it works. This September students in England will get an opportunity know about personal finance, which has been included in the school curriculum. The compulsory course will consist of basic financial skills which will be included in the maths lessons. The children will learn about budgeting, appraising interest rates and APRs, future financial planning etc. They will also learn how money is raised from public and used in the citizenship curriculum.
The Share Foundation in UK has undertaken another initiative that will offer “financial inheritance” for various children. The UK charity also plans to raise funds for children in care. The Chair of the Trustees, Gavin Oldham, believe this campaign is mainly about encouraging charitable donations. He says, “Education is a key part of this initiative. With PFEG we can provide guidance on handling money generally, and – more specifically – how these Isa investments can be used to provide for the future."
However James Vaccuro of Triodos Bank hopes that the scope of financial education would increase further in the near future. This will help our children to learn how deal with finances better and become better citizens. He says, “We should be teaching our younger people how financial systems work, what their agency is in it, and how this can be leveraged to bring about change”.
Understanding Money & How It Works
The primary challenge in educating younger people is to make them understand that their financial decisions will not influence their political issues. The programme Director of UK Sustainable Investment and Finance Association (UKsif), Lisa Stonestreet, says, “Money is a powerful agent of change. We want to reach out to younger people and ensure that they are part of this debate. Sustainable finance is about more than just investment. We want people to think about all aspects of their money, from student bank accounts to credit cards – and start asking question of these providers”.
She believes the improved engagement will certainly result in change. Most reputed banks do meaningful work with social enterprises, educational schemes and local communities. She adds, “Do customers support these initiatives or would they like to see their bank doing more? We are not making judgements as to which bank, pension company or investment fund is ethical or not. We'd like to see customers of all ages, but particularly younger people access this information and make their own decision about how their money is used”.
Apart from these, there have been several other campaigns and initiatives that aim to help the cause. Push Your Parents is one such campaign that started with the aim of helping students. The Move Your Money campaign also encourages young people to act responsibly regarding their bank accounts and savings.
The Outreach Officer of ShareAction, Jo Beardsmore, believes that the idea of young people being disinterested and disengaged in financial issues is simply a myth. ShareAction offers training courses to those individual who want to ask questions at bank AGMs. He says, “When young people want to protest they don't just stand there with a placard now. They want to arm themselves with information, engage in the financial arguments and change things for the better”.