We need to teach old dogs new tricks
A lot of the personal finance world's great and good are forever telling us that the key to improving the nation's financial literacy is to teach financial education in schools.
While this might certainly help improve the general population's grasp of financial products it won't be the silver bullet that the experts are hoping for. Can any of us really recall much of what we learned at school? In my opinion teachers' time would be better spent trying to improve numeracy rather than worrying about financial literacy.
Yet there are some commentators who have realised that the advice or knowledge is really needed at the point of sale and not taught years earlier in school. Or in other words we need to work out ways to deliver financial education when people are actually faced with an important decision, such as taking out a mortgage. This will be far more effective than teaching children at school.
However, the method of delivery doesn't have to be solved by dreaming up expensive technology based solutions either. When a lot of people, especially young adults, are faced with a decision they are unsure about they may seek advice online. Yet they will also seek advice from their most trusted source, which is often their parents or grandparents.
As a nation we are quick to cast the older generation on the scrap heap once they retire. But we need to stop this. There is a wealth of experience that is going to waste. It is important to ensure that parents and grandparents are passing on the right information or advice otherwise financial illiteracy becomes a vicious circle.
I believe the key to improving the nation's financial literacy is to start improving that of the eldest portion of society first. Not only will this reduce their vulnerability to fraudsters but it will ensure that when their advice is sought by younger family members they will give the right advice.
As a species humans have dominated this planet partly because of the ability of older generations to pass on their knowledge to younger generations. Why is it that the world of finance has lost site of this? It's a process that has stood the test of time and I'd back its success rate over that of a fancy new smartphone app any day.
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