Lucy Haughey, Director, The Plan B Partnership
Money issues are a growing epidemic in the Western world, and whether rich or poor, financial exclusion is at the very heart of the problem.
Relationship breakdowns, homelessness, ill health, accidents, redundancy, addictions and unexpected pregnancies can happen to anyone, but there is a widespread assumption that they only affect certain people. Whether its reverse snobbery from the wealthy who believe they are not in need of money advice or misguided assumptions from service providers that the less well off are not entitled to it, there are barriers across all tiers of society which has led to financial exclusion and a worrying lack of impartial support.
That is what led me to lift the lid on exclusion and rummage about the sector piloting a service that was for anyone, of any circumstance or group who needed access to debt solutions commonly divvied up between the public, private and charity sectors. As a social enterprise we manage to avoid the restraints of all these entities, and we are now leading the way in genuine financial inclusion activities such as financial advice, debt guidance, budgeting, training, research and financial inclusion project consultancy.
An interesting client group we are asked to help more often are people aged 18-25. Although there are lots of school and college-based “money skills” workshops and projects, these are often (ironically) delivered by high street banks, and school-based financial education can become really rather pointless.
The financial services sector is so changeable and complex that teaching 12-year-olds how to “ save up” really does not solve the issues they have when they turn 25, meet a partner and try to get a mortgage for the first time. Personally, I believe we should take a different track, by making financial awareness and domestic science a co-joined compulsory module.
Imagine young people learning how to do a weekly, monthly and annual household budget and being taught how to take into account essential costs like insurances and utilities and how these can fluctuate but also be well managed. Imagine if the syllabus included the difference between shopping locally and shopping at a big supermarket and there was lessons on cooking food high in nutrients. We could teach at an early age the monetary benefits of work versus the negatives of being reliant on a social welfare system, about safe and unsafe credit, how debts occur and how to manage them correctly and more.
We would be re-building our society from ground level up and creating a generation with REAL money skills.
Old principles for new lifestyles
Young people should be taken back to the generation of their grandparents- back to the 50s and 60s when living frugally and within means was the status quo. It was perfectly reasonable to bake our own cakes, make our own clothes and be proud of what we had, not bitter about what we want but can’t have. For a 33-year-old mother of three I am old-school. I am a bit tight, delighted to get a bargain, self sufficient, abhorrent of overpriced brands and I enjoy working for my pennies.
When we are asked to get involved with youth-focused projects they are often about crisis intervention and not crisis prevention. Whether this is because RBS has a monopoly on school-based workshops on “how to get a bank account and buy insurance with them” or if it’s the usual funding trends, we must ask; Why wait for things to go wrong before we wade in and try reverse the damage?
Prevention, not intervention
Recently I have been developing a homelessness prevention (social housing tenancy sustainment) project with a Scottish local authority in conjunction with its housing association partnership, and I have been blown away by their research outcomes. Often it is the most financially vulnerable people with the least direct route to help, which is why we are developing a straightforward programme that teaches a first time tenant how to manage their domestic finances in order to avoid debt.
When I started the Plan B Partnership I discovered employment services miss out a whole ream of intervention points when attempting to place young people into work. There is a far better off calculation process (about 15 minutes with the employment adviser talking about income versus benefits), but in many cases the discussion does not take the direction it should.
This isn’t purely about wages. It is about social mobility, social experiences, promoting opportunities, discussing home ownership, savings and financial security. I am yet to meet an employability adviser (that I have not trained) who knows how to explain to a young person what range of debt solutions are available to them when they start work in comparison to the two that exist while they are out of work. Nor have I ever met an employability service that is directly tackling the issues of their credit checking-referred applicants and failing them not on their interview, but on the fact they have bad credit. Why employability services have not yet addressed these financial inclusion issues and engaged a credit repair guidance practice, I have no idea.
Time for change
I could go on and on like some sort of bonkers financial tyrant, but really I just want change. Practical, positive, modern change. Unless we start looking at financial exclusion and our horrific recent history of credit reliance, young people will simply fall into the traps we, our generation, have laid for them.