Can I afford a mortgage? What pension should I choose? How can I reduce my debts? If you struggle with questions like these, you're not alone. A recent survey by the Financial Services Authority (FSA) suggests that, while most of us can keep track of our day-to-day spending, when it comes to planning ahead - saving for retirement or choosing financial products - many people lack the skill to make the right decisions.
People in the UK now have on average nearly twice as much debt as other European citizens, and the Citizens Advice Bureau said recently that badly informed and poorly understood financial decisions, as well as low income, are at the root of many debt problems.
One reason for our difficulty with money management is that personal finance has become more complicated than it was a generation ago, according to Ian Fribbance of The Open University, an economist with an interest in financial education. "The last 20 or 30 years have been a period of liberalisation in financial services," he says. "There are more products, and people are expected to take more responsibility for pension provision and areas where the state has withdrawn from some of its functions."
According to the FSA survey, many people take financial risks without realising it, because they don't know how to buy the financial products that meet their needs. So being more financially educated should help us avoid spiralling debts or huge pensions shortfalls. Government is sufficiently convinced to have announced plans to give greater prominence to financial literacy in the revised National Curriculum due to come into effect in 2008.
Fribbance is the one of the architects of a new Open University course which aims to combine helping people to manage their money, with giving them a overview of the wider economy, and how they fit into it. So they can understand, for example, not just how interest rates go up and down, but why.
Fribbance hopes to convince those of us who are turned off by the thought of cash flows and balance sheets, that learning about finance is interesting as well as good for our bank balances. His research interest is in applying economics to public policy, and this is reflected in the course, which is classified by the OU under both Business and Social Sciences. "Those who study the course will see how they link into the wider social and economic picture," says Fribbance.
"They will see how they are part of a pattern of change. For example, the traditional family unit of 40 or 50 years ago has transformed into a diversity of household types. We now have many more people living alone, and we have civil partnerships, that would've been unthinkable not so long ago. These changes have enormous financial implications for those involved."
The course is both academic and practical and covers changes over time (such as how your income and spending may vary in different stages of life); the interrelationship between households and individuals (for example, the financial implications of having children); and the impact of wider society and the economy on personal finance. It also focuses on personal financial planning, and includes an interactive DVD and financial planning tools to help with personal budgeting and financial planning during and after the course.
You and Your Money: Personal Finance in Context begins in November; the closing date for enrolment is 16 October. For more information visit: www.open.ac.uk/courses and key in course code DB123Reuse content