Am I financially smarter than a 16-year old?

noddle blog post

Something that was added to the national curriculum in 2014 (so after I was in school – but only just!) was financial education.

Whilst maths is good for learning how to count etc, it doesn’t teach you how to manage your money – and once you have left school and are left to your own devices, your eyes can be opened to how much you haven’t been preparing for your new financial situation.

Unfortunately, if nobody teaches you what to do, you are left figuring it out for yourself, and this is where things can go wrong.

I was never taught anything about credit reports, mortgages, tax, benefits, debt, interest, loans, credit cards, overdrafts, budgeting, meal planning… any of that – and it’s all pretty important too. I’m not trying to say I had zero clue about any of them, or that I have no idea now, but I had to do a lot of research myself, and it’s important to realise that not everybody may be able to do that.

The government’s decision to add financial literacy to the national curriculum in England is a brilliant idea, and should have happened a long time ago. Perhaps the assumption prior to this was that maths skills would help and your parents could guide you the rest of the way. But it’s clear that this wasn’t sufficient.

Last year, it was shown that in the UK, unsecured debt (e.g. loans, credit cards) was a staggering £205 billion.

Now that’s not to say that the reason people get into debt is because they are not good at managing money – there are lots of horrible scenarios and situations that give people no choice but to get into debt. But there is no doubt that having a good level of financial education sets you off on the right foot.

When it comes to money management, a good place to start is your credit report. The experts at Noddle.co.uk advise that you should be checking it at least once a month. It will enable you to see all your existing lines of credit, which will help you take control of your finances. Also, regular checks help in identifying potential fraud and identity theft early on, since your report contains information on the accounts you hold.

I had the opportunity to take the financial literacy mock exam – I was very nervous as I hadn’t studied  for it, but I was hoping that I would know quite a bit of it due to being a money blogger! I do feel like I have my finances together, but there are some areas that I definitely don’t consider myself an expert in, such as tax or mortgages.

When I was doing the exam, I found some bits harder than others – specifically the question on taxes.

However, I’d recently had a discussion with my boyfriend on a few tax related issues, which I remembered, so this helped me in the exam.

I was also unsure about inflation’s influence on the value of money, Bank of England interest rates and how this affects the economy and the way that people spend. I never even realised that consumer spending impacts on inflation and interest rates!

This was something that surprised me. I had heard of the Bank of England interest rates before, but to be honest I didn’t really know what it meant when they went up and down – although I have heard my boyfriend talk about this when discussing house prices.

As these areas are things that I haven’t looked into or researched before, I think it’s definitely a good idea to teach children about it at school. It’s incredibly important to have good financial literacy, as it helps you manage and make better decisions with your money.

Ultimately, having money gives you options – hate your job? You can get a new job. In a toxic relationship? You can leave. It’s a lot harder to get out of these things if you don’t have any money to do so, especially if you are stuck in a cycle of debt.

As mentioned, a great place to start improving your financial health is with your credit report. At Noddle.co.uk, you can access your credit score and report for free for life. Checking your credit report and score is important, as it shows how you’re likely to be viewed by lenders. For example, if you wanted to buy a house, the lender that you wish to use will run a credit check on you.

Along with credit scores and reports, here are some other topics that will help you on your financial literacy journey:

  • Debt
  • Interest Rates
  • Taxes
  • Mortgages
  • Budgeting
  • Meal planning
  • Benefits
  • National insurance
  • Self-Employment vs. Permanent Employment

I also recommend checking out the Noddle Help Hub, where you can find information on everything from what your credit report actually is and how to improve your score, to protecting your details from fraudsters and how to find the right type of credit for you.

With debt in the UK rising, I really hope that the next generation will be better equipped to manage their money, and protect themselves from bad times. An emergency fund is a great place to start with that – putting some money on the side for a real emergency can save you a lot of heartache, and stop you going into debt.

How do you think you would fare in a financial literacy exam?

This is a collaborative post, however all opinions are my own.