Budgeting Is Key To Improving Financial Skills

Budgeting Is Key To Improving Financial Skills The implementation of personal finance classes in secondary schools could be the key to improving the nation’s attitudes to debt, an industry expert has suggested. According to a spokesperson from Citizens Advice, such a move will help young people develop a greater knowledge of financial products such as personal loans and credit cards, which in turn could see them become more responsible borrowers in later life. It was suggested that a “lot of debt problems” are currently being caused by a lack of understanding of economic terms and schemes. Meanwhile, a shortfall in confidence in dealing with money matters was also attributed to the country’s debt difficulties. As a result, the advisory service reported that introducing mandatory classes for 11 to 16-year-olds across the country would boost their financial awareness and help them to be able to plan their spending. And should they look to borrow money in the future, through a personal loan for instance, then they may know how to search for the most competitive deal possible and judge how interest rates could affect their ability to make repayments. The representative commented: “We’d say the key thing is budgeting. Knowing how to budget is a fundamental building block of financial skills; understanding what you’ve got coming in and going out, being able to plan a budget, understanding how credit works and, as a result, being able to use credit and know how to get the best deal.” It was also suggested that there are a “whole variety” of methods, such as drama classes, which can engage young people into learning about important financial issues. With the spokesperson also pointing to work done by the charity across the country in improving school-aged children’s economic knowledge, it was stated that “there shouldn’t be any reason for [engaging young people on this subject] being a stumbling block”. However, it was claimed that “the problem” in improving children’s personal finance knowledge would be to make sure that it becomes “something that all young people of school age do have access to”. Meanwhile, a recent questionnaire, which was conducted via social networking website Facebook and commissioned by ClearDebt, has indicated that young Britons are becoming evermore concerned about developing debt difficulties in later life. In a study where 200 people were questioned, 48 per cent of 18 to 24-year-olds are currently reported to be in the red. With one in six (14 per cent of respondents) predicting that they will owe money by 2012, some seven per cent claim that they are set to be in debt within ten years’ time. However, a third declared that they think they will never get into arrears via credit cards and unsecured loans. The findings also revealed that just over a fifth (21 per cent) of young women believe that they will never get into debt. Although this proportion rose to 40 per cent of men in the 18 to 24 age bracket, Andrew Smith, marketing director for ClearDebt, claimed that many males “are being rather over-optimistic” about their views on their future monetary situation. Tom Dawson is the Editor in Chief for Essentially Home Loans where visitors can apply for cheap loans online . We also specialise in debt consolidation loans , and secured loans