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When it comes to financial literacy, millennials are a lost generation

Finances can be the first thing to go when you feel you have no control over your life – but they can also buoy you through the choppy seas of your twenties.

One rainy Friday afternoon, I am sifting through brightly coloured PowerPoint presentations on my work computer. They’re full of case studies and neon-bordered tips aimed at students in Key Stage Three – ages 11-13. Their subject is something called “financial literacy”.

On one slide, a teen called Suhaib has “caught the saving bug”, and “keeps on insisting that his friends and family should budget”. Smug little idiot, I think, until I look at the notes below and baulk. Apparently, UK adults that spend 30 minutes a month budgeting save an average of £1,500 a year, which, my brain automatically calculates, adds up to almost three months’ rent.

I covertly pull out my diary and mark out one day in every month to have a go at this budgeting thing. But I’m also wondering what exactly “budgeting” consists of. “Most students,” the lesson plan notes, “will be able to explain what budgeting is at the end of this lesson.” I page through frantically, looking for tips.

As I go on, my page of notes for this piece remains blank, while I’ve jotted down tips across two pages of my personal diary. Financial literacy wasn’t a part of the curriculum until 2014, in part as a response to the 2008 crash. I'm now realising that this is a bit of a problem.

My generation, especially in London, has a strange relationship with our finances. Even for those of us lucky enough to be working in full-time professional jobs, we feel like being penniless is out of our hands thanks to the housing market. When almost half your salary disappears from your account before its feet hit the ground, the idea that you have any control over your financial situation is laughable. Terrible interest rates for savings accounts make the whole exercise feel even more futile. 

Meanwhile, the things we might actually save for – a house, a proper holiday – seem so far off that saving seems pointless, once you’ve established that you’ll need to eat every day this month, and not give your landlord or the electricity company cause to hunt you down with pitchforks. Most people I know spend any extra earnings on living a lifestyle where they can eat out occasionally, and go to the pub, but don’t get to travel much and aren’t saving for a deposit or pension. Perhaps the Financial Times would call this lazy or spendthrift, but I call it pragmatic, with a healthy dose of scepticism that any of those far off dreams would ever come about – no matter how hard you budget.

And yet, at the same time, financial literacy is floating towards the top of the millennial agenda. Paulette Perhach’s piece “A Story of a Fuck Off Fund” went viral in January, precisely because its argument ran counter to everything I just said. A fund of around £3,000, Perhach says, means you didn’t have to lethargically settle for the less-than-ideal conditions tossed at millennials.

Three thousand pounds is a job you can quit without finding another immediately; an abusive boyfriend you can dump; a flat you can leave; a holiday when you desperately, desperately need one. Finances can be the first thing to go when you feel you have no control over your life – but it can also be the lifebelt that protects you from the choppy seas of 20-something existence.

The piece was aimed at women specifically, perhaps because we’re more conditioned than men to settle into this slight powerlessness that a depressed economy can hand you. Men have an automatic fuck off fund: a world which allows, and indulges, their mistakes and risk-taking, and a world that is less likely to attack or rape them if they’re caught in the wrong place at the wrong time without a travelcard or place to go. While empowering, the piece was also depressing - it put an (I would argue accurate) figure on the cost of being a woman, rather than a man, in today's financial world.

As a result, we shouldn’t be surprised that entrepreneurs and start-ups – all hallmarks of this new, unstructured economy - are heavily skewed male. In the business world, we’re not heading for a more equal future, but a deeply sexist one: men are trusted to take financial risk, and so women are kept out of investor meetings or edged out of ventures altogether.

Financial literacy is on the curriculum now for our younger siblings and children, and arguably, our own parents didn’t need it so much. For them, a single career in a single field was ample time to learn about their simple tax returns and their mortgage if they had one. Their pensions, of course, are currently ruining us all.

Today’s young adults, meanwhile, are faced with a world of economic uncertainty, but few resources to navigate it with. Freelance tax returns are incredibly complex, but heaven forbid we were taught the skills to do them alongside long division at school. The freedom that should come with the new, fragmented world of work and the possibilities of the internet is only on offer to those who feel secure enough to take them, and have societal permission to drain their overdrafts to fund a self-driven project.

The solution isn’t clear. From the rudimentary financial education I have, it seems that Suhaib is right: saving, even a little, is a start, not least because it gives you back that feeling of control. The government’s two ISAs for young people (the Help-To-Buy ISA, available now, and the broader Lifetime ISA launching in 2017) may help twenty-somethings feel that investment in their futures isn’t entirely pointless. That their money is as valuable as anyone else's, and could take them places one day. 

But for now, don't judge the young person you know who goes for cocktails once a week, but says they can't afford to save. For all intents and purposes, they're telling the truth.

This post is part of the New Statesman's Literacy Week.

Barbara Speed is comment editor at the i, and was technology and digital culture writer at the New Statesman, and a staff writer at CityMetric.

Photo: Getty
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People are not prepared to see innovation at any price - we need to take care of our digital health

Correcting the course of technology in Britain does not need to mean taking backwards steps and becoming an anti-innovation zone.

As individuals, we have never been better connected. As a society, we are being driven further apart.

Doteveryone’s People Power and Technology report, released this week, found that half of the 2,500 British people we surveyed said the internet had made life a lot better for people like them - but only 12 per cent saw a very positive impact on society.

These findings won’t be news to most people living in Brexit Britain - or to anyone who’s been involved in a spat on Twitter. The fact that we’re constantly connected to our smartphones has not necessarily improved our communities or our understanding of one other, and the trails of data we’re leaving behind are not turning into closer social bonds.

Many of the positives we experience are for ourselves as individuals.

Lots of consumer tech puts simple self-sufficiency first - one-click to buy, swipe right to date - giving us a feeling of cosy isolation and making one little phone an everywhere. This powerful individualism is a feature of all of the big platforms - and even social networks like Facebook and Twitter, that are meant bring us together, do so in the context of personalised recommendations and algorithmically ordered timelines.

We are all the centre of our own digital worlds. So it is no surprise that when we do look up from our phones, we feel concerned about the impact on society. Our research findings articulate the dilemma we face: do we do the thing that is easiest for us, or the one that is better for society?

For instance, 78 per cent of people see the Internet as helping us to communicate better, but 68 per cent also feel it makes us less likely to speak to each other face-to-face. 69per cent think the internet helps businesses to sell their products and services, while 53 per cent think it forces local shops to compete against larger companies online.

It’s often hard to see the causality in these trade-offs. At what point does my online shopping tip my high street into decline? When do I notice that I’ve joined another WhatsApp group but haven’t said hello to my neighbour?

When given clear choices, the public was clear in its response.  

We asked how they would feel if an online retailer offered free one-day delivery for lower income families, but this resulted in local shops closing down - 69 per cent found this unacceptable. Or if their bank invested more in combating fraud and cyber crime, but closed their local branch - 61 per cent said it was unacceptable. Or if their council made savings by putting services online and cut council tax as a result, but some people would find it hard to access these services - 56 per cent found it unacceptable.

It seems people are not prepared to see innovation at any price - and not at the expense of their local communities. The poorest find these trade offs least acceptable.

Correcting the course of technology in Britain does not need to mean taking backwards steps and becoming an anti-innovation zone.

A clearer regulatory environment would support positive, responsible change that supports our society, not just the ambition of a few corporations.

Some clarity about our relationship with web services would be a good start. 60 per cent of people Doteveryone spoke to believed there should be an independent body they can turn to when things go wrong online; 89 per cent would like terms and conditions to be clearer, and 47% feel they have no choice but to sign up to services, even when they have concerns.

Technology regulation is complicated and fragmentary. Ofcom and the under-resourced Information Commissioner’s Office, provide some answers,but they are not sufficient to regulate the myriad effects of social media, let alone the changes that new technologies like self-driving cars will bring. There needs to be a revolution in government, but at present as consumers and citizens we can’t advocate for that. We need a body that represents us, listens to our concern and gives us a voice.

And the British public also needs to feel empowered, so we can all make better choices - adults and children alike need different kinds of understanding and capability to navigate the digital world. It is not about being able to code: it is about being able to cope.

Public Health England exists to protect and improve the nation’s health and well-being, and reduce health inequalities. Perhaps we need a digital equivalent, to protect and improve our digital health and well-being, and reduce digital inequalities.

As a society, we should not have to continually respond and adapt to the demands of the big corporations: we should also make demands of them - and we need confidence, a voice, and representation to begin to do that.

Rachel Coldicutt is chief executive of Doteveryone.