We are all only too aware of the recent slowing down in house price rises, the escalating climb in personal borrowings, the increasingly higher levels of personal insolvencies and the fall out from the banks lending policies over the last ten years laid bare for all to see.
I wonder how many people would now turn to a high street bank for financial advice. It is a long time ago since banks had managers that were not simply driven by sales targets and machine driven customer service cash points. Banks have not only lost their personality over the last ten years, they have probably lost their credibility as an esteemed financial institution in their own right.
Some would argue that they have fallen victim to sheer greed, having lowered their own criteria and left them wide open to higher risk borrowing, knowing that by charging these borrowers higher rates the risk they were taking was a high risk strategy that has certainly back fired.
Having spent several years being trained in problem avoidance, I have given the situation some careful consideration and ask the question in the title of the article, if financial education was in mainstream schools, would there be a recession looming?
If you regard the current levels of personal borrowings being the consequence of a simple lack of good financial education then you would also argue that a sound financial education from a young age upwards would have better prepared those same adults to the situation that was been put in front of them.
With a better knowledge of money management and the principles of investing, they would not have put themselves in the position of being considered high risk. The more low risk borrowers become the more competitive the banks must be to gain any business. This would result in lower rates across the board for everyone.
A significant amount of young adults being brought up to understand effective ways to handle their money would see them less willing to accept all the lending, high rate or not on offer and make a better judgement on whether such borrowings were in line with a longer term investment strategy instead of short term gratification or simple necessity.
I am certain had I been better prepared at a young age to understand simple money management principles, I would not only have saved myself and my family many years of pain and hardship, I would have furthered my own financial freedom by the same number of years I spent regaining control of my finances and my investment portfolio would have been increased by hundreds of thousands of pounds though all those lost interest payments alone.
Whoever becomes the next President of the USA, or if the UK changes the Prime minister at the next General Election, I wonder if any of them will have financial education in schools as a top priority. For a highly advanced Western Civilisation we seem to be missing one essential problem avoidance factor, lessons in money management in schools.
