I’m shocked how many people know nothing about their finances

[SENDChaos]

I came across a thread on here earlier which made me look at the section and I’m absolutely gobsmacked at some of the things I’ve seen on here, especially in relation to joint finances

I'm always shocked and saddened we hen people post about their DC going off to uni and they haven't saved anything, despite earning well, to help them yet they must have known they need to contribute and their DC will only get a minimum student loan.

I honestly don't think there's any excuse for it these days. If you can read and have access to the internet you can start teaching yourself this stuff from the moment you get your first job. You can even get chatgpt to teach you stuff as if you're a 5 year old to understand the very basics, and then as your knowledge increases you can read more indepth stuff, or look at the ins and outs of, eg your workplace pension scheme.

Years ago, when everything was paperbased, it was really quite difficult to know what you even needed to know and you relied on info being passed on to you by older colleagues, some government leaflets etc. Now, you've got Martin Lewis teaching us the basics in a variety of ways, bank and mortgage providers websites, investment platforms, online forums where you can ask questions. There is no excuse for ignorance.

The info is out there, but it takes some effort to read about it. Sadly some people are just not interested or can't be arsed.

That's not living frugally, though, is it? You're right, it's people's perceptions and personalities. And the type of people they mix with. Plus what they choose to view on social media.

@caringcarersome of us don’t need to save, we just pay for them from our salary. So you can stop being shocked.

@keepswimming38we ended up doing a mix of both- some savings and some paid for out of our salaries. Of course, it makes more sense to save to get the benefit of interest, so I wish we’d managed to pay it all from money saved. That said, with three children to fund who overlapped at university, it would have been a big ask to save everything we needed in advance

I think there is much more to life than money than finances. Of course as long as you don’t run out of money to the point you are starving and homeless but in terms of ‘budgeting’ and being able to save X amount by X date - I think it’s all down to personal preference and what your priorities are.

not sure what it’s like now - but I do wish that school taught us about bills and savings and credit cards though - instead of random algebra. I remember taking out a credit card as a student (thinking great, free money) and when it came to pay it back I was screwed because I did really knew ‘how it worked’

It can be overwhelming. I barely thought about it until I got my ft job aged 37. But I'm catching up. I did have the foresight to pay into a private pension, so there's a bit there.

I'll also say this - if you think you've understood something, it doesn't occur to you to check your understanding.

We tend to be optimistic too. So we don't really think ahead to what might happen if the men or women in our lives suddenly want out.

I keep things simple and have always aim to keep any money I have in my name.

There’s is too much ‘we’ have this but think what do YOU actually have. We have 100k in ISAs (in the DH/DP’s name) and so on. It’s normally this way around too.

Sadly some people are just not interested or can't be arsed.

That's a reductive thing to say @CurlyhairedAssassin . It just isn't a binary thing. What happens with some other people is that you think you're alright financially alright because that's the way you've been brought up, or you're in a relationship that seems to be working. You're bobbing along and it doesn't occur to you to do any financial planning. Again, I stress this is for some people.

I've been an accountant for over 40 years and nothing surprises me anymore.

I've had loads of small business clients where the proprietor never opened bank statement envelopes so hadn't the foggiest idea how much was in the bank. Others who were owed tens of thousands because they never bothered checking/chasing customers who hadn't paid their bills. Some of these were professionals!!

The "best"/"worst" was an IT contractor who was paid every 4 weeks (not monthly), and completely missed that one payment from his agency had not been paid - I only noticed at the year end when I expected to see 13 payments and there were only 12 - there was still one per month which is presumably what the client saw on his bank statement. The amount "lost" was huge - something like £15k that he simply never noticed he hadn't received!

Same with individuals, as I'd often get a carrier bag full of unopened letters from banks, pension firms, HMRC, etc to prepare someone's year end tax return. These clients would just put all "brown" envelopes in a drawer or pile, never bother opening them, and just chuck them in a carrier to give to me once a year!

I remember a dentist client who wanted me to do a review of his financials for CGT and IHT planning. He hadn't a clue how much his pension fund was worth, didn't know his occupational pension age/lump sum, didn't know whether he had life insurance with his mortgage, didn't know if his mortgage was repayment or endowment, didn't know if the house/mortgage was in his sole name or joint names, "thought" he had some money in a building society, but didn't know how much and didn't know what kind of account it was (i.e. ISA or otherwise) and couldn't even tell me which building society it was. We finally agreed that he'd "find" the paperwork and give it all to me to look at. A few weeks later, he turned up with two huge boxes of "brown envelopes", most of which were unopened. It took many hours to open it all and sort it all out before I could even start to organise it into what was relevant, and start to write the report!

I really dread to think about the mess that people today will find themselves in now that most things are online and there isn't a "pile" of paperwork languishing giving clues as to their finances. Today, there is a very real risk of someone dying and the executors/family never finding out just what they had if they don't know roughly what they had and don't know all their internet email addresses and have access to their emails etc. Yes, if you know they had, say, a Halifax bank account, the executors can get info from the Halifax, but if they didn't also know they had a Furness B/S account, they'd not know to contact the Furness - you can't contact every last bank, building society, pension firm, insurance firm, stockbroking/investment firm etc. As I say, at least in the old "paper" society, the family would probably find an old BT share certificate at the back of a drawer, but today, there'd be nothing like that for people who've been wholly "online" for the past decade or two!

I agree. I think the "I don't know" is just an excuse. A bit like the giggly "I can't do Maths, me!" attitude. People are only interested in what they want to be interested in. Same with the Waspi fiasco - the information was "out there" everywhere you looked yet huge numbers claim they knew nothing about it at all. They CHOSE not to engage and check what was going on! Not on was it in mainstream media, newspapers, magazines, etc., there were leaflets in hospital, GP and dentist waiting rooms, leaflets in tax letters such as the yearly PAYE coding notice letters and yearly tax statements, leaflets in annual benefit entitlement letters such as child benefit, etc. If people CHOSE not to read the leaflets etc then it's entirely on them for not keeping themselves financially aware! Did they expect the prime minister of the time to call personally at their door to tell him in person??

Yes, it was a bit harder in "ye olde days" to find information, but lots of newspapers and magazines included at least basic financial information/advice. I remember reading small/simple articles on personal finance in my "Just Seventeen" magazine, alongside articles on boy bands and the agony aunt page! When I started work, and needed to be a bit more savvy, I'd read the personal finance pages of my parents' Sunday newspaper.

Today, I am constantly amazed at the sheer amount of "advice" available at the click of a mouse or press of a finger on the iphone. Every possible topic has information available at all different levels of ability from very basic "step by step" guides to credit cards/ISAs right up to pretty advanced advice about share trading, specialist tax planning etc. Yet, what do people do? Yep, they just google for cute cat videos at the same time that their finances are in a mess!

@latetothefisting

whenever it comes up teachers say "but it IS taught!" = which tends to support points a) and b)!

It's "taught" in the wrong way though. Yes, the compound interest equation is taught as part of the Maths GCSE, but it's taught as an equation, rather than a real life, relateable, situation. Just numbers on a sheet of exercise book paper! When a pupil is already disengaged with Maths and especially disengaged with algebra (huge numbers of pupils don't achieve a "decent" pass at GCSE Maths), it's just random numbers on a page that mean nothing.

Where are the lessons telling you in easy to understand basic literacy/numeracy that you could end up paying £250 over a few years if you buy an Iphone case costing £50 on a credit card and only pay off the minimum amount every month! Or that if you save £50 per month from the first day you start work you could end up with a huge pension fund when it comes to retire due to compound interest etc, or how overpaying your mortgage by a relatively small but regular amount can knock years off the repayments and thousands off the interest charged! NOT the compound interest equation which is inaccessible for roughly half the pupils - a real life worked example with the emphasis on the reality not the "boring" underlying equation!

Perhaps these kinds of real life examples need to be "taught" or better, presented in something other than a Maths lesson, maybe PHSE, citizenship, form time, etc so that they may have more impact.

But, yes, we can't "teach" things like tax rates, ISA limits, pension ages, etc as they DO change frequently, but we can certainly teach the underlying basics that DON'T change, such as the importance of regular saving, importance of reading small print, importance of understanding how debt increases due to interest if not paid off.

Everyone has different interests.

I am 100% on top of money, but really can't be arsed to learn to cook. If it was not for DH, I would live on toast, bowls of cereal, and things where you read the box to see how long you leave it in the oven for.
Plus frozen peas.
OK I am exaggerating. I have been known to cut up a bit of broccoli or peel a couple of carrots to boil.
But complicated things that involve ingredients? No thanks.

So I can totally understand how a SAHM just doesn't have the headspace for finances. It was only a few generations ago that women were not expected to know anything, it was the man's job to provide. So if a woman has picked up this attitude from her mother and grandmother, she is unlikely to change.

As for small traders who don't open brown envelopes - maybe a few generations ago they would have been employed, not self-employed, when the country had real industries, and they actually have the don't mental aptitude for "running a business" which is very different to receiving a salary payment each month.

I thought the same as you, but when this topic last came up, several teachers said it IS taught exactly the way you are saying it should be - with real world examples, etc. They said it's covered both in maths and PSE (or whatever the equivalent is).

I'm not a teacher, I don't know the extent to which is correct. It could also vary a lot between different areas/teachers. On the whole if it seems blatantly obvious to us that it should be taught it does tend to suggest that it should be equally obvious to those involved in setting the curriculum...and tbh, even if it is taught in schools that shouldn't absolve parents of the responsibility either. Technically cooking/food tech is "taught in schools" but a few hours making a salad, a cupcakes and some soggy spaghetti isn't exactly much.

I've forgotten huge swathes of what I learned in school, even if financial literacy was taught, and taught well, there's no guarantee it would stick.

"It should be taught in schools" is an easy way of absolving personal responsibility, both on parents but also as individuals. It has literally never been easier or cheaper to learn something than it is nowadays. There are lots of free finance for dummies podcasts, books, websites. MSE has a free financial literacy course. Citizens advice have loads of info. All available for free via the palm of your hand.

I think people have a phobia about money.

It Is scary to realise how little the majority have. And also how much debt they have.

I think there’s some truth in that. But it’s a vicious circle - if someone buries their head in the sand and ignores their debts, it’s not going to help. Debt is a fact of life for so many - mortgages, student loan, probably credit cards etc - but that doesn’t mean you can’t own it and manage your finances. And things like paying into a pension are essential - having a mortgage etc shouldn’t stop that. Like I said earlier, when we were parents of young babies, going through the era of massive interest rates, and before childcare subsidies, all of my take home pay went on nursery bills for several years. But the fact I stayed in work meant I wasn’t losing vital years out of my pension. It’s not that everybody must do the same, but everybody has a responsibility to think through the impact of financial decisions. Knowledge is power!

It is indeed power. But I was phobic for many years. My pension is screwed through being a Sahm and having an abusive h who would get so so angry if I made enquiries about our financial circumstances. Little wonder. He’d spaffed €630k!!!

So now I am very aware of my finances circumstances not least how utterly awful they are. I track every euro.

It’s really not as simple as you make out. It really isn’t.

As parents this is also our job, I have shown both my dc aged 13 and 10 my payslip, I have shown them what I pay in tax etc and what that is for. It takes 15mins to explain.

My husband gets completely overwhelmed by finances and buries his head in the sand. He was a contractor for about 20 years and never set up a pension even though I (and his parents) kept trying to get him to do so and he could afford it. He didn't put money into ISAs.

I now keep track and do all our finances. I don't love it but someone has to. I set everything up to move money around and then get him to put passwords in. I'm putting money into his pension, set up a S&S ISA for him and am choosing where to invest.

He's a competent person in other areas but not this, and it's infuriating.

If by ‘you’, you mean me, I’m not making out it’s simple at all. It certainly wasn’t simple living through the era of interest rates hitting 15 %. Nor was it simple breastfeeding a baby and then getting baby and toddler off to nursery where I paid the equivalent of my take home pay on fees before going off and doing a tough day’s work before returning home and doing all the domestic stuff.

my point is that for the vast majority, money is always likely to be a pressure through adult life. Unless you’re born into wealth and never have the pressure of having to earn then you’ve got to pay rent/ mortgage/ bills/ childcare… (and to be honest, it doesn’t always go well for people born into extreme wealth - that brings different challenges!)

Nothing simple about it at all. But the worst thing is to fear money and to avoid thinking about it.

I was at secondary school in the late 1970s/80s and personal finance WAS covered in sixth form (not in maths).
My DM was part of a women's club and she told me about pension ages changing (this was to 65, not my current SP age of 67). That being said, when she died I wondered what my DPs were going to live off... they still had an outstanding endowment mortgage - which fortuitously for DF was paid by the life cover attached to it. Despite being largely paper-based, it took 20 years for us for the dividends for her investments to find us.
My DP is hopeless; he owed HMRC £19 and ended up paying a £1000 fine. He won't let me help him as he hates how stupid it makes him look. Luckily I can easily cover all financials as I am higher earning partner.
Mostly I find MN extremely financially risk adverse; no credit cards, paying mortgage vs pension.
I have been reading Martin Lewis since when he started. I suspect my DC who seem savvy, although more risk tolerant are getting their advice from Reddit or similar.

I still have a very distinct memory of finance lessons in year 5 c1997-8
Our teacher got us to make debit and credit card and explained the difference. We made cheques, we were taught about debt and wages.
We had sessions in secondary school and the thing that was impressed on us most was even defaulting on small debts can have an impact and raised that at that time mobile phone companies were quick to report defaults to credit report companies.

Numerical literacy is a problem and then this has a knock on effect into finances.

We have a combination of separate and joint finances. We live out of joint finances funding based on our current earnings. We are responsible for managing our personal savings and we don't curtail one anothers spending although we do have similar attitudes to money and consumerism. When we were younger we adjusted our lifestyle to the lower earner.

We pay close attention to our money, we try to keep track of where the money is and if we are optimising our interest rates. We shop around for deals, we make use of discounts my partner gets through work and it may seem dull and boring but doing this day to day means when we are out and wanting to do something spontaneous I know we can say yes as I know our lifestyle is comfortably in our budget and the extras are accommodated.

I was made redundant last year and it has been made so much less stressful because I know we are in a good financial position. I know our lifestyle is covered by my partners wage. I've not had to touch my redundancy payout.

Money doesn't buy happiness but it can buy freedom and some peace of mind. In a previous job my partner hated the company and was thinking of quitting without an onward position knowing we could manage on my wage was a comfort should he need. He was able to find move company so it wasn't necessary.

My daughter is 5 and we talk about money with her, she knows that there is a relationship between the jobs we do /did and getting paid and that is the reason we have food and a house and bills. She knows that there are things in the shops that cost a little and a lot. That there are things we buy frequently and occasionally.

I have seen financial awareness courses advertised and aimed at women addressing the imbalance. They are useful as a starting point. The cynic in me says the courses are offered by wealth managers to secure the next generation of clients but if it makes people better informed it's worth it.

I agree, OP

A lot of my friends (professional, intelligent women in their 30s and 40s) just leave finances to their DHs. I find it really shocking and quite worrying.

Me and DH completely share money. Where we have to have individual investments (i.e. ISAs), these are always equally topped up so 'my' investments and 'his' investments always have the same in them. We both know all the passwords to access all our investments regardless of whose name they're in.

We sit down on the first weekend of each month to review the state of our finances and update the mega spreadsheet. It keeps everything transparent and is fantastic for tracking investment performance.

I just can't get into the mindset of my friends who say "Ugh, its boring" or "I don't understand it". I'm actually pretty judgemental about women who have these kind of attitudes.

I am all over our finances as we are in fairly low paid roles. I have a friend who doesn’t even know how much she earns, never checks her payslip, has no bank account (her wages go into her husbands account and he does question anything she buys as she had his debit card abc he uses Apple Pay). She has no idea how much money they have in the bank and he controls finances and holidays etc. I couldn’t t live like that, when my payslip is out I check it to make sure there are no errors and I sett my budget for the month ahead.