One of the things I most dread on my journey to adulthood is completing a self-assessment tax return. Vital for any freelancer to remain on the right side of the law, it is painted as a complicated process full of economic jargon, tricky calculations and unnecessary stress. Though I know completing it is possible – hundreds of thousands of individuals, if not more, do so each year – that does not remove the anxiety from sorting and submitting economic information.
For those on lower incomes, life is lived from one payday to the next
Economics or finance can seem like a chore, with jargon only experts understand. Yet this cannot be the case. All of us will have at least one bank account and have to consider our daily spending on leisure and academic studies. Staying on top of everything and not overspending is, again, a life skill everyone has to cope with.
That doesn’t mean personal finance is easy. For those on lower incomes, life is lived from one payday to the next. There is not enough disposable income to afford to save. Those lucky enough to be on a higher salary can afford to make savings but that does not mean the situation is easy. Indeed, given the number of different bank accounts, savings accounts and ISAs all arguing they offer the best deals, trying to find the objectively best option is no mean feat.
Part of the inaccessibility of finance is simply the breadth of options that are available, not only from banks. All companies pledge to be offering the best deals on consumer spending, with the least amount of money leaving your bank account. That economics, spending and money are so ingrained into our lifestyles just demonstrates how widespread the different parts of information are, which can only drive uncertainty.
Naturally, finance is about far more than just consumer spending. The way different economies behave across the globe can affect all of us, as the financial crisis showed. Though the idea of all economic activity being based in the City is an exaggeration, it is a financial hub where decisions have a dramatic impact on the country’s prospects.
Finance can seem so jarring precisely because it is discussed in such abstract terms: talk of inflation, recession, micro v macro economies can appear very distant to the reality of people’s lives, even if the terminology itself bears widespread relevance. Despite the fact each of us is living with the consequences of economic decisions every day, we only feel qualified to properly discuss economies if we have particular qualifications.
The main reason for this inequality existing? Like so many things, it’s education
What are the solutions? Websites like MoneySavingExpert, run by Martin Lewis, try to correct the abstract manner in which economies are embedded into our lives. By providing clarification on cheap deals, all free of charge, Lewis manages to better equalise the immense inequality that exists when it comes to understanding finance.
The main reason for this inequality existing? Like so many things, it’s education. I remember having hardly any financial education as a primary or secondary school pupil about either abstract terminology or basic information like what a mortgage was. Just as learning history at school helps provide a better guide to the past, teaching children about the importance of economies can be a useful tool for entering the world.
The home background means such a divide can simply spread further. Rich individuals are far more likely to be able to afford accountants who can ensure their families pay the lowest legal amount of tax and have investments secured for future generations. Meanwhile, the concept of investment and saving for the future is lost on those with lower incomes, many of whom cannot afford to do so. Any spare money is more likely to be spent on a lottery ticket, in a wish for potential riches.
Within any financial discussion must always come an awareness that political arguments, disputes and social disagreements are possible. This can be a vital tool for ensuring that one model of political and economic change does not simply have one solution. While economies and finance may always seem like a challenge, better introducing its teaching at a young age can help mitigate social inequalities. This will be essential if we are to ensure financial knowledge does not remain for the elite.