Financial literacy

[AndyWolves]

Just a question really about how many people consider themselves to be financially literate and informed?

The stats around people who have emergency funds, investments and understand what their pension values are is shocking.

 

[Del Woppio]

Don't confuse being 'financially illiterate and ill-informed' with 'I can't afford to save meaningful money'

 

[AndyWolves]

Absolutely, and that's why education is even more important

 

[EpsomWolf]

I think it’s very difficult, your own character comes into play irrespective of financial literacy. Some people are very cautious and others have the ‘you might get run over by a bus tomorrow/you can’t take it with you’ etc.

It’s telling watching the parents and in-laws get old and somewhat immobile and how the long term planning (or lack of) has really come home to roost. Very similar careers/earnings etc but one pair very comfortable with lots of options and the other panicking in shit street.

All about playing your hand I guess and we’re all going to have twists and turns, but I don’t think you can underestimate the impact of different personality types and the different way people want, or need to live their lives.

 

[Tyrannosaurus Dan]

My understanding of investments and pensions is pretty minimal and I’d have loved to have had someone explain to me. I definitely think it is something that should be part of the education curriculum.

 

[EpsomWolf]

My understanding of investments and pensions is pretty minimal and I’d have loved to have had someone explain to me. I definitely think it is something that should be part of the education curriculum.

It was just drummed into me by my old man to get on the property ladder asap. I had no real idea about investments either and it was only when there was a bit of meat on the bones you could start exploring that side of things and you can learn pretty quickly.

The thing is, I (as many were) fortunate enough to be able to take that path at a time when it was actually feasible. It’s as though we’re asking people now to become financially savvy when there is little to no meat on the bones whatsoever.

 

[AndyWolves]

This was the most important thing I ever saw, everything started from understanding these steps.

Doing steps 2 and 3 puts you ahead of the majority of people

The Flowchart - UKPersonalFinance Wiki

A starting point for your financial planning journey in 8 steps, from the wiki for Reddit's /r/ukpersonalfinance!

ukpersonal.finance

 

[WarwickWolf]

My understanding of investments and pensions is pretty minimal and I’d have loved to have had someone explain to me. I definitely think it is something that should be part of the education curriculum.

It should certainly be on the school curriculum. My kids are pretty good with money but I'll never forget the look of abject terror on their faces when they realised that they'd have to budget for themselves at uni.

 

[Deutsch Wolf]

There's someone who used to post on here who is/was genuinely the worst person with money I've ever seen. Got money, buy the most expensive thing ever as soon as you can. Then oh shit, I can't even afford Lidl beans for the next fortnight.

I would say if you've been genuinely poor then that tends to give you a healthy respect for money.

I do have a pension but in all honesty with my condition and how my life has gone, I am not going to worry too much about what I've got 30 years from now. There might not be another 30 years.

 

[Haggstone]

It astonishes me how simple it is to get to financial freedom. It's too late for me to an extent. I'm going to have to do too much of the heavy lifting and won't really start to benefit from the compounding affect until I'm more or less retired anyway. Plenty of people worse off though.

My son on the other hand, I put a bit away for him every month in a stocks and shares isa. All he has to do is not be an idiot like i was in my 20's and early 30's. Put a few hundred aside each month and he will be home and hosed by middle age.

No idea why it's not taught, but even if it was, I wouldn't have listened anyway. I had nights out to organise, and mates to bum around with. I only started to take this seriously when I started a family. No regrets though.

 

[Tyrannosaurus Dan]

Putting a few hundred aside every month is easier said than done for most people though.

 

[Haggstone]

I said it's simple, I didn't say it was easy.

 

[Elephant Pyjamas]

No idea why it's not taught....

Really? I do.

 

[Wolf Hunting]

When my brother was alive and his transport business was going well, he put every spare lump of cash into his pension fund.
It was very healthy, to such an extent that when his marriage went tits up, he sorted his wife out, sorted out the house for her and then with HALF of what was left, he bought himself a nice house.
So I have to say start ramping up your pensions asap.

 

[AndyWolves]

When my brother was alive and his transport business was going well, he put every spare lump of cash into his pension fund.
It was very healthy, to such an extent that when his marriage went tits up, he sorted his wife out, sorted out the house for her and then with HALF of what was left, he bought himself a nice house.
So I have to say start ramping up your pensions asap.

1. Bare minimum is find out the maximum your employer will contribute and what you need to do to get it. It's literally free money

2. Check what your pension is invested in. Default profiles aren't always best for everyone.

3. Consider contributing more if you're in 40% tax territory. It's incredibly tax efficient to do so and can mean the difference between claiming free hours / child benefit.

4. Check the fees & charges etc. these also compound over time

 

[AndyWolves]

It astonishes me how simple it is to get to financial freedom. It's too late for me to an extent. I'm going to have to do too much of the heavy lifting and won't really start to benefit from the compounding affect until I'm more or less retired anyway. Plenty of people worse off though.

My son on the other hand, I put a bit away for him every month in a stocks and shares isa. All he has to do is not be an idiot like i was in my 20's and early 30's. Put a few hundred aside each month and he will be home and hosed by middle age.

No idea why it's not taught, but even if it was, I wouldn't have listened anyway. I had nights out to organise, and mates to bum around with. I only started to take this seriously when I started a family. No regrets though.

Compounding is such a serious force.

 

[EpsomWolf]

It astonishes me how simple it is to get to financial freedom. It's too late for me to an extent. I'm going to have to do too much of the heavy lifting and won't really start to benefit from the compounding affect until I'm more or less retired anyway. Plenty of people worse off though.

My son on the other hand, I put a bit away for him every month in a stocks and shares isa. All he has to do is not be an idiot like i was in my 20's and early 30's. Put a few hundred aside each month and he will be home and hosed by middle age.

No idea why it's not taught, but even if it was, I wouldn't have listened anyway. I had nights out to organise, and mates to bum around with. I only started to take this seriously when I started a family. No regrets though.

I think you might be underestimating the amount required to be ‘home and hosed’.

Besides, you’re putting that away for him, then telling people they should do that for themselves, it’s completely different.

It would be mightily difficult for him to be self-sufficient, work, provide, save for a large deposit (never mind actually earn a sizeable salary enabling a large mortgage to be granted) AND be well off enough to invest the “few hundred” on top.

You’re helping your son, fair play, I know loads of people doing that and many of their offspring are now homeowners ONLY because of it, but those kids are very fortunate and that’s a very separate thing to financial literacy and lecturing everyone they should be able to do it for themselves.

 

[Haggstone]

I think you might be underestimating the amount required to be ‘home and hosed’.

Besides, you’re putting that away for him, then telling people they should do that for themselves, it’s completely different.

It would be mightily difficult for him to be self-sufficient, work, provide, save for a large deposit (never mind actually earn a sizeable salary enabling a large mortgage to be granted) AND be well off enough to invest the “few hundred” on top.

You’re helping your son, fair play, I know loads of people doing that and many of their offspring are now homeowners ONLY because of it, but those kids are very fortunate and that’s a very separate thing to financial literacy and lecturing everyone they should be able to do it for themselves.

I haven't told anyonene to do anything.

 

[AndyWolves]

I think you might be underestimating the amount required to be ‘home and hosed’.

Besides, you’re putting that away for him, then telling people they should do that for themselves, it’s completely different.

It would be mightily difficult for him to be self-sufficient, work, provide, save for a large deposit (never mind actually earn a sizeable salary enabling a large mortgage to be granted) AND be well off enough to invest the “few hundred” on top.

You’re helping your son, fair play, I know loads of people doing that and many of their offspring are now homeowners ONLY because of it, but those kids are very fortunate and that’s a very separate thing to financial literacy and lecturing everyone they should be able to do it for themselves.

I think the point is that even the smallest sums of money invested when young can compound into significant sums given enough time.

 

[Haggstone]

Yeah I'm going to leave this I think, no idea why simply stating my experiences, how I've missed the boat because of my own stupidity, but that I'm doing something for my son is seen as lecturing.