Money Insider: Why financial know-how has to be kids' stuff
Saturday 09 June 2012
A basic understanding of personal finance is a must for all school leavers. We repeatedly hear calls for children to be taught more about personal finance at school, yet we still seem some way off from it being included as part of the national curriculum.
Some in Westminster may not see this as a priority; however, a quick look at the recent statistics released by Credit Action underline the scale of the financial problems consumers are currently facing in this country.
The latest numbers are scary, revealing that on average, 314 people are declared insolvent or bankrupt every day and 8,518 new debt problems are dealt with by Citizens Advice Bureau. While some of these situations will arise due to circumstances beyond the borrower's control, there are certainly cases that could have been prevented if people understood a little more when it comes to money matters.
These are challenging financial times for people of all ages, so the more our children learn about managing their money the better. Whilst some schools have taken the matter seriously, there are still too many that barely scratch the surface.
The sooner our children start learning these essential life skills the better, whether it ends up as a bolt-on to mathematics or a standalone subject, we can't afford to sit back and see more people ruin their lives due to poor financial decisions.
When the current generation leaves school, they should appreciate the dangers associated with credit cards and payday loans and enter adulthood with the knowledge and confidence to deal with their finances.
Money plays a pivotal part in our lives, whether it's buying our first car, our home, paying for our children's university education or putting enough cash aside to provide for our retirement.
Today's youngsters won't be able to rely on making huge profits out of soaring house prices or have the luxury of final-salary pension schemes. Many are likely to have to work until they are into their seventies.
Teaching children how to handle their money has never been more important, and it's vital we start sooner rather than later.
Get a broker to find the right mortgage
Brokers remain an essential part of the mortgage market.
The amount of mortgage business being written may only be a fraction of what it was before the banking crisis, but that doesn't mean the job of finding the best home loan has got any easier.
The number on offer is mind boggling, and even if you've decided whether it's a variable rate or fixed-rate product you're going for, you still need to work out which is the cheapest option for you.
It's not as simple as referring to a best-buy table on a comparison website, although some lenders still launch attention-grabbing interest rates, hoping it will be sufficient to win custom from those who don't take the time to shop around or use the services of an independent mortgage broker.
Banks and building societies continue to develop products with profit margins based on a wide range of rate and fee combinations, and whilst it may work for them, for the man on the street it can be a big headache. One of the biggest problems for consumers is working out which is the most appropriate mortgage based on the total cost, i.e. not just the interest rate but also the associated fees which can vary enormously between lenders, loan-to-values and individual products.
When you consider that your mortgage is likely to be the biggest financial transaction you'll undertake in your lifetime, it makes sense to seek advice to ensure you don't make what could be a potentially expensive mistake.
Andrew Hagger – Moneynet.co.uk
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