Last week the Home Office announced a strategy to end violence against women and girls. Preventing violence in relationships will be included in personal, social, health and economic (PSHE) education.  The idea is to address attitudes which condone and perpetuate violence against women before they become entrenched in young people.

There are also plans for a national communications strategy, skilling teachers, and a health task force.

What’s it got to do with financial education?

A lot more than most people think.

Financial abuse is one of the common forms of domestic violence. A resource for health professionals produced by the NHS describes it like this:

Economic or financial abuse aims to limit a victim’s ability to access help. Tactics may include controlling the finances; withholding money or credit cards; making someone unreasonably account for money spent/petrol used; exploiting assets; withholding basic necessities; preventing someone from working; deliberately running up debts; forcing someone to work against their will and sabotaging someone’s job.

The guide describes how many abusers behave in ways that include more than one type of domestic violence. The boundaries between different types of domestic abuse, including emotional, psychological, physical, sexual, and financial abuse, are often blurred.

When the YWCA surveyed disadvantaged young women in its centres it found that a third of them had experienced some form of financial abuse — such as having money taken from them, or being manipulated with money to control or harm them. A very large proportion of young women said their male partners spent money earmarked for essentials on themselves.

Equipping young women with the skills and confidence  to recognise financial abuse for what it is, and explore ways not to endure it, is a fine objective. So is letting young men know the effects of their actions, and how financial abuse is linked to, and as unacceptable as, other forms of relationship violence.

The YWCA is one of the few groups raising awareness of the problem nationally. See its excellent description of the problem in a free downloadable information sheet.  In the young women’s stories section, Kelly and Kim talk about their direct experience of financial abuse.

You know those times when you are chatting to teenagers about long-term, financial lifestyle planning? Otherwise known as pensions. And you realise there is a desperate shortage of interactive websites that help young people to achieve their future goals and aspirations by encouraging them to imagine what their lives will be like in 40 or 50 years time?

Well, maybe not. Getting young people to think about pensions is a specialist area. Cynics might think it’s a pretty hopeless one.

The Personal Finance Education Group, which provides classroom resources for teachers, is feeling optimistic. It’s taken a bunch of money from life assurance and pensions company Aegon, and built a website called 2070: Launch Your Life.

The website might help someone.  After all, this generation is the first that is on its own for retirement planning. Employer-based pensions were still around for their parents and grandparents. Back then, pension planning didn’t occupy too much brain space. For most people, it just happened, and there wasn’t much choice. The world is now a different place.

A group from Cullompton Community College sold recipe books and cleared nearly £500 profit from a £20 start. Birkdale High School student Ben Campbell created a business renting out ping pong balls and bats to his friends.

Some of the schemes really seem to be impressive fundraising efforts – though they show the entrepreneurial skills and energy of those involve. Worth a look at the range of activities.

There’s a guide for teachers and youth workers who want to set up a club. The point is to help 14-19 year olds “who want to develop networking skills and build up their enterprising attributes”.

The quick answer is to stay calm and get help. People get in debt, and they can get out of it. Slowly and sometimes with difficulty. Debt is a very hard problem. It won’t disappear overnight. But it can be managed.

Here’s my off-the-cuff list of what an adult needs to help a young person who is deep in debt.

1. Trust & openness. If you are not trusted you won’t be told anything. You also need to be open about what you know and how you can help. Young people sometimes say they don’t raise their money problems with adults because they don’t think the adults will know what to do. In many cases, they’re right.
2. A calm attitude—neither over-reacting nor under-reacting. Panicking doesn’t help anyone. Neither does shrugging it off.
3. Knowledge of what debt is, what effect it has on people, and the main ways to manage oneself out of it. This does not have to be at the level of a debt adviser or a welfare rights adviser. Those are specialist areas it is better for untrained people never to wander into. But it helps to know the basic outlines, the terminology and some of the principles.
4. Inside understanding of local services. A young person with problem debts may need the help of a money advice or debt counselling service. They may need the support from a welfare rights adviser. They may be helped by a youth information, advice and counselling agency. Whichever, the important thing is to know what is available, what the young person’s reception is likely to be (so they can be prepared), and what they need to take with them on a first visit (so they don’t waste time having to book another appointment).

That’s a lot for a non-specialist to know. But young people deserve no less. So how do you get there? Points 1,2 and 4 are something adults need to work out for themselves, pick up from experience and intuition, and get good at by practising. They’re about attitude and skills.

Item 3 is more knowledge-based—which means you can learn it. You can find out what to do, what to avoid. A good route is to sign up for a course. Another is to read a book.

There are a lot of get-out-of-debt books around. Search amazon.co.uk  for “debt” and you reveal a mini-industry of variable quality and value. Managing Your Debt by Phillip Inman is a good example of the genre.

Promising independent and expert advice, Managing Your Debt pretty much lives up to its claim. There is an awful lot of sound and reliable information. There’s a good balance of explanation, advice and case studies.

It covers, for instance: What powers debt collection agencies have, and how they are likely to behave. What a debt management plan looks like. The importance of sorting out what’s owed into priority and non-priority debts. Why consolidation loans are probably not a good idea. When debts can lead to court action. How to draw up a budget and what to do if you can’t follow it.

And much more. Remember you don’t have to learn all this. Knowing all aspects of it would turn you into a money specialist. Being broadly aware of what the route is will help you point a young person in the right direction.

Managing Your Debt by Phillip Inman costs £10.99 post free from the publisher Which? Or from Amazon, at a bit of a discount and the chance to look inside.

“Half of 18-34 year olds say they have debts of up to £10,000″. That’s a typical form of words used by those trying to communicate the seriousness of young people’s financial state. The source for it is a sound and interesting research project, conducted by Reform and the Chartered Insurance Institute. The Money’s too tight to mention report is a worthwhile read. But it shouldn’t be used for scaremongering.

Here’s what’s wrong with using the figure above without qualification or context:

• It’s daft to lump the lower end of this age group with the higher. Very many people in their early thirties do have a lot of debt. Jumbling their figures in with under 25s doesn’t clear the picture very well.
• It is natural that a lot of that age group have debts. Debt is embedded in the system of getting a higher education, thanks to the student loan system. 
• Up to £10,000 is such a broad range that it doesn’t say much. If you owe £50 to your parents, you’re in that category. How meaningful is that?
• Stressing how widespread debt is can have an unintended consequence. It risks normalising debt. Young people who constantly hear that a very large proportion of their age group are heavily in debt, will not automatically avoid it. They are just as likely to accept it as a necessary and unavoidable fact of life.

Having said that, it is true that debt is a major problem for some young people. Just not most of them. It is also true that all young people are potentially at risk of becoming heavily in debt—in their 30s and 40s. That is the pattern, and it is one that young people ought to be prepared for.

So what’s needed? A good start would be if adults working with young people have a clear idea what to do to help someone who has problem debts. Alongside that, all young people should have a chance to find out what different loan options are available—from an impartial source that has their interests at heart.

I’m currently reading a promising new book Managing Your Debt, which looks very handy in both respects. It’s from Which?, the consumers’ organisation. I’ll review it in a forthcoming post.

A dog’s breakfast of drivel, exposing what is wrong with the way experts think about financial knowledge.

According to this quiz, one of the main things people need to know is the details of particular wealth & property taxes – the level at which stamp duty is payable, and the inheritance tax limits. Such things affect a very small proportion of the population. Knowing the exact amounts scarcely affects behaviour or attitude. They impinge on the lives of young people hardly at all.

Then there’s absurdly advanced mental arithmetic. Assume your credit card is charging 18% APR and you have used it to buy a computer for 500 GBP, says the quiz. Exactly how many years and months will it take to pay off, making just the minimum monthly payment of 5 GBP? If you can do that in your head, you have a rare gift. But that skill won’t help, and certainly isn’t essential, to good financial knowledge.

There’s a vocabulary test – what does Isa stand for? – and another request for the fine detail of current tax-free saving limits.

State benefits are covered by a couple of questions, but only as they apply to those of pensionable age.

How do these match key areas of financial capability? They don’t. Financial capability is about making ends meet, keeping track of finances, planning ahead and a certain amount of product knowledge.

These shockingly irrelevant questions are worse than pointless. Their effect is to alienate people. Getting a low score on a lot of pointless questions will make people less, not more, inclined to take an active interest in money management.

Just to show this is not sour grapes – I personally did fine on the test. I got eight out of ten, having guessed wrongly on the average interest rate payable in January and the silly APR calculation. But knowing the IHT limits or the winter fuel payment rates does not mean I have the financial know-how that matters.

This may all seem over-solemn for a fun quiz. But it isn’t. The purpose of a fun quiz should be to demystify and encourage. It’s as if the “panel of experts” have deliberately tried to emphasise the arcane mysteries of their craft, to aggrandise themselves and keep outsiders in the dark. A disgrace.

Update—3.43pm 18 Feb—Just had my answers recalculated. I got 9 out of 10. I’d guessed right on the credit card question. They got their “sums wrong”. Which makes my point.

In a series of short videos, Scott Mills goofs around wandering into situations and asking viewers to make the right decisions in a “test of financial intelligence”.

Here, Greg James and 1Xtra’s Gemma have a week of money management tasks. They’re given challenges—to see who can make their cash go furthest.

This year, Girlguiding UK responded with a four-page advice leaflet. Tips include shopping around, avoiding debt and budgeting. Download Guiding’s guide to managing money.

• What if Lucky Luke won a million pounds? What if he knew that a close friend who really needed the money had been turned down for a hardship grant because it was fully allocated? Pursue the difference made by changed circumstances.

Many young people are weary of made-up dilemmas. They can be reluctant to engage with yet another obviously unreal scenario. However they can respond very well to genuine stories of real people. Since awkward decisions about money have to be made all the time, real stories are not hard to find. They might come from young people themselves or their older peers.

Not only is a situation more engaging if you know it happened to a real person. It may offer the chance to follow what actually happened once choices had been made. A genuine narrative is powerful, and always more compelling than a theoretical case study.

Here’s a couple of recent ones:

Should Lucky Luke give back his hardship grant?

Lucky Luke is a student and struggling horribly to survive, partly as he doesn’t manage his money well. He applied for a hardship grant from the limited Uni fund and has been awarded £1,000. On the day it goes in his bank account, to celebrate, he buys a lottery scratch card (part of the reason for his poor finances) and wins £5,000

Relevant dilemmas don’t have to put the young person at the centre. Here’s one that invites them to think things through from other people’s points of view:

Would you shop your teenager?

Whilst withdrawing cash from an ATM you notice £750 is missing from the account. A quick check online reveals the money was spent a few days ago at djdecksdirect.com; your fourteen year-old son’s favourite website. He admits using your debit card to make the transaction online and has already received and used the goods. You have bills to pay and simply can’t afford to write off that much cash but the only chance of getting it back is to admit what happened to the bank and give it a crime number, which means reporting your son to the police.

Even if the dilemmas themselves don’t raise much interest, the comments of some of the forum members might….