By Jonathan Sidlin PETR CertLTCP Adv Dip FA Chartered ALIBF, Financial Planner and Managing Director of HSC Financial Advisers, explains why he thinks core education should include lessons in financial planning.
We can all understand why children are taught English, mathematics and science – They need to be able to communicate, understand how to use mathematical formulas/work out percentages etc and also have a good understanding of how and why things work the way they do.
What is less easy to understand is why children aren’t taught about financial planning in school, providing them with the basics on how to make their money work for them. As an adult, one of the most fundamental aspects of our lives is financial security. Feeling that our financial situation is out of control could be one of the most common reasons for anxiety and insomnia which is even more prevalent at the current time particularly with the cost of living challenges and a high inflation environment. So, more than ever, the need to teach financial planning in schools from an early age should be an obvious solution for young adults.
Gaining financial literacy
Teaching children how to budget essentially educates them how to manage their money. It is the first step to financial literacy. Understanding how to set limits on expenditure according to incoming funds gives children the knowledge to control their finances and ensure that they take appropriate steps to avoid large amounts of debt. It should also teach them that there is a need to earn sufficient income to fund outgoings and explain why it is necessary to have the relevant level of income to meet their needs.
Better mental health
With budgeting comes the understanding that saving can only happen when expenditure is less than income. But we should be teaching our children that saving is not only to buy that must-have extra on our list but is also a way to prepare for emergencies. We should teach that saving isn’t something that is tacked on the end of our month’s finances, or made up of a random figure that just happens to be left over, but that it is a regular commitment which does not necessarily have to be large but is always essential. Building this habit will certainly be beneficial no matter what stage of life we are experiencing, and when we have money to cover the unexpected, we no longer need to fear the unforeseen. So, savings actually help with one’s mental health and provide peace of mind.
Supporting a lifestyle
Of course, many people have a certain opinion of what money can buy, and it can only help them if they are given the facts in order to make decisions about their finances. The link between income and standard of living needs to be emphasised – and what better way to incentivise extra effort at school in order to potentially benefit from a higher income in the future.
Financial independence leads to personal independence
Understanding how to plan finances should also help facilitate financial independence in the future. There is much freedom in having financial security and understanding how to financially plan. A young adult that is independent from their parents can later on in life relate to financial independence from a spouse or partner. Having a plan for your own finances should help build confidence and personal autonomy.
Planning for the future
Teaching how money markets operate gives pupils an overview of how money can be made to work. With an innate understanding of why investing in the present can grow capital, pupils will gain an insight into the importance of starting to save for the future at an early age. With the knowledge that even the smallest regular commitment into a pension plan will result in a comfortable retirement, it is hoped that the benefits of a small sacrifice today will reap greater rewards in the future. With the requirement for companies to offer a pension plan to their workers, it is even more important that we teach our children how they operate and provide them with the information in order to help make decisions that will affect their financial future.
Working with pupils to identify their future goals, whether that be to travel the world, own a property, start a business, have a large family or continue their studies, will allow them to start planning in order to make those dreams a reality. We should be teaching our children how they can maximise their money in order to make it work best for them.
It is so easy to neglect financial planning during our twenties and possibly even thirties and then discover that actually we have already left it too late to make the most of our opportunities. Surely we owe it to our children to teach them the importance of taking control and having responsibility at the earliest possible stage in their lives so that they have the tools to make the best decisions for them, their families and future generations to come. I work with many families who ask me to speak with their children and help them understand more about finances and how best to invest their money.
Jonathan Sidlin is a standout financial planner whose proven track record helps his clients build wealth in order to achieve long term financial success. Jonathan is not your ordinary Financial Adviser. He believes every person should be educated about personal finance from an early age to ensure they are presented with the best opportunities in life. It is this unique combination of education and strategy that helps his clients increase their personal wealth and ensure their protection needs are met. Jonathan provides his clients with the confidence to follow a long-term financial plan, guiding them at regular intervals with the aim of becoming financially secure.
Jonathan is a Chartered Financial Adviser who graduated from the London Institute of Banking and Finance. His expertise covers most areas of the Financial Planning process, including Pensions and Investments, Tax Efficient Products and Estate Planning Solutions. With an increased focus on sustainability, Jonathan is working to bring more ESG investment options to his clients.
Jonathan’s clients come from all walks of life and include all ages. Whether it’s a first-time buyer looking to purchase a home, individuals and business owners looking to grow their wealth, or a retired person wishing to draw an income and/or provide for the next generation, Jonathan has strategies for each unique situation.
Jonathan believes that financial success is built around a basic understanding of money and the choices individuals make when it comes to their finances. Jonathan works with his clients on a personalised basis taking them on a journey to create a tailored financial plan.
Jonathan offers uncomplicated, authentic advice and prides himself on being down to earth and jargon free. His goal is to make financial wellbeing accessible to all and enable more people to achieve long-term financial freedom.