How might we reduce the slings and arrows of financial stress?

Financial wellness for most people equates more often to the negative mental health aspects rather than the positive potential upsides (FIRE – Financial Independence, Retire Early) – by Laurence Taylor 

We have all experienced the stress involved with finances, many of us live payday to payday and have very little opportunity to plan for the future, and 1 in 6 of uBuggers (a staggering 9 million people) have no savings whatsoever or are borrowing to buy food or pay bills. 

My own circumstances as I stagger towards my 51st year must be pretty typical: self-employed, no pension other than inheritance, three young kids, parental care kicking in.  

Stress? Pal, you ain’t seen nothin’ yet!  

So, how might we reduce the slings and arrows of financial stress? 

We’ve just done some User Research with a broad range of young people and sole traders, and it’s thrown out some intriguing results. 
 

‘1 in 6 of uBuggers (a staggering 9 million people) have no savings whatsoever or are borrowing to buy food or pay bills’

 
The main worries as one would expect are sustaining short-term income in the face of inflation, debt, and work-based issues such as job cuts, zero-hour contracts, and tasks being taken over by AI. 

When we asked what people felt would help them better manage their finances what came up again and again was their desire to have all their financial information “at-a-glance” in one place, like on a single dashboard.  

Now Open Finance, like Open Banking before it, should open up this possibility by bringing in balances not just from bank accounts and credit cards but also from all financial products such as ISAs, investment accounts, and pensions.  

The benefits of this in helping people to make decisions based on what they actually have in their accounts rather than what they ‘believe’ are obvious – but the downside is that snapshots of balances can often be deceptive. More useful I find is to take today’s balance and project it forward 90 days taking account of all the ins & outs that may happen (e.g. that unexpected car repair bill, or a gift from Aunty Flo when she wins on the scratch cards). 

Another idea was for an Information Hub, independent & trusted but more fun to use then gov.uk, tailored to what you need when you need it – i.e. not asking for much!  
 

‘52% of 7-17 year-olds don’t receive any meaningful financial education either at school or home’

 
It’s a lovely idea that comes with many challenges: with investment data changing all the time then you’d need an army of content creators (they used to be called journalists) á la Money Saving Expert, all being able to write in an engaging and accessible house style. As we’ve found at DIY Investor, trying to make concepts like Unit Trusts and Tax Allowances really zing is enough of a task already. 

For most people the main purpose of things like a single Dashboard and a trusted Information Hub was so that they can Do It Themselves rather than pay for someone to Do It For Them. Changes afoot in the Money Guidance rules should allow more trained and accredited people to be able to help Do It With Them, which was also seen as a vital resource. It always comes down to the same idea: more skills leads to more confidence leads to less stress. 

Investing Basics: Do it Yourself, Do it With me, Do it For me – just don’t do nothing! > 

It’s clear from the research that a new approach is needed to provide expert external support for schools (and by extension parents).  

According to the Money & Pensions Service 52% of 7-17 year-olds don’t receive any meaningful financial education either at school or home.  
 

‘a need to pick up the slack and provide expert and engaging resources to help reduce young people’s anxiety over their finances’

 
Alongside crippling budget restraints many teachers of Personal Social Health and Economic Education feel they lack the skills & confidence as well as appropriate resources to engage students in key life skills topics such as financial management.  

The situation isn’t improved by the lack of support and encouragement from parents, many of whom are struggling with the stress of their own financial situation and therefore don’t feel confident to guide their children.  

So if young people aren’t learning financial capability skills at schools or at home then they either will never get any money education or they will go to places like #fintok on TikTok and potentially watch poor or inappropriate guidance.  

This is where there’s a need to pick up the slack and provide expert and engaging resources to help reduce young people’s anxiety over their finances.