Financial education is so much more than just understanding numbers—it’s about building confidence, developing skills that enable informed decision making, and ultimately, creating opportunities for the future.
Our relationship with money, and the financial choices we make can have long-lasting effects, so being equipped with the right skills is vital to successfully navigating life’s milestones.
Research suggests that many of the core habits that will underpin your relationship with money are formed by the age of 71, meaning it’s never too early to start this journey. Clearly, long presentations about mortgages or interest rates aren’t the answer at this age, but there is a lot that can be done to help introduce the concepts of delayed gratification and understanding the value of money.
Establishing a connection with these concepts can help both the forming of good habits as well as an understanding of natural tendencies, laying the foundation for future success. Practical experiences are the most powerful methods here, be it in workshops such as those we run in partnership with schools across Singapore or setting challenges at home (e.g. budgeting a grocery shop)— all experiences are good to build confidence and comfort.
As children grow older, introducing more complex concepts such as banking, credit, and investment can prepare them for the financial challenges of adulthood. Opening a savings account and explaining the power of compound interest can illustrate the benefits of long-term saving. For teenagers, discussing topics like budgeting for university expenses, managing credit responsibly, and planning for future financial goals can provide valuable life skills.
For adults, financial literacy is the foundation of personal independence and long-term stability. Whether it’s managing household expenses, saving for retirement, or planning for significant investments, having the knowledge—and possibly more importantly, the confidence—to make informed financial decisions is crucial. The cost of delay is one of the most common pitfalls.
You may be reading this lamenting the lack of support you received whilst growing up and whilst you likely have a legitimate gripe, it’s also not too late. ‘Finance’ is an extremely wide term and includes all manner of incredibly complex topics. To be clear, I am not suggesting one should become an expert on derivatives or recite tax codes verbatim, however, taking time to build understanding of key concepts as well as your own biases will have a multitude of benefits.
Not least will be the ability to identify good opportunities and advice vs complex products and salesmen.
Financial literacy is particularly important for women, who often face unique financial challenges. Career breaks for caregiving, the gender pay gap, and longer life expectancy can impact women’s financial security. By developing strong financial knowledge and skills, women can take control of their financial futures and build long-term independence.
There is work to be done here. For example; in the UK, more women hold ISAs than men and contribute more regularly on average, however, the ‘gender ISA gap’ stands at £6.6 billion according to asset manager AJ Bell2.
Clearly, a differential of this size is not simply explained. One significant factor is the differential behind what assets are held within these accounts, with many more women holding cash ISAs, over stocks and shares. This was put down in part to lower risk appetite and choice paralysis, both of which can be eased through higher levels of financial literacy.
Building confidence starts with small, practical steps. Creating a clear budget, tracking expenses, and setting financial goals are essential. Saving consistently, even in small amounts, will build good habits and accelerate progress towards your targets.
Similarly, repetition is key to building proficiency and thereby confidence. Whether that is setting regular challenges for your children or reviewing your own budgets and plans regularly, each engagement will improve understanding and conviction.
Finally, talk to people, share resources, take interest and discuss the concerns you have. I know countless people who think they’re awful with their finances when in reality are in a reasonable position, and many others who think they’re alone when the opposite is true. Seeking professional advice can also provide valuable guidance and ensure that financial decisions are aligned with personal goals.
Financial education is a lifelong journey that benefits individuals, families, and future generations. By equipping adults with the knowledge to manage their finances and teaching children essential money skills, we can empower everyone to make informed decisions and realise their goals. Investing in financial literacy today is an investment in a brighter, more secure future for all.
References:
1. Habit Formation and Learning in Young Children; Dr. D. Whitebread, Dr. Sue Bingham for the Money Advice Service.
2. “More women than men hold Isas, but gender Isa gap still stands at £6.6bn” — Darius McQuaid, Money Marketing
Author:
Thomas Streatfeild-James, Partner, Eight Wealth International
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