The impartial government-backed money advice organization Money Advice Service reports that money management capabilities and numeracy go hand-in-hand. Today, the majority of UK consumers that face financial difficulties are also those that overestimate their numerical ability – this concerns 50% of the working population in the UK.
Money Advice Service raised a red flag warning that notions about the value of money and the benefits of delayed gratification should be integrated into the education system. The organisation’s financial capability director, David Haigh, reinforces this statement by adding that the attitude towards money is usually established between the ages of five and seven.
Furthermore, 80% of medical practitioners treating anxiety and depression are increasingly solicited for non-health related issues, mostly related to debt and money problems (Citizen Advice). And although the number of financial support and management apps is multiplying, when the fundamentals are lacking, confidence and resilience may suffer, or worse, could lead to greater financial distress. “Fintech is not a panacea for fixing the perennial problems of information asymmetries, and sub-optimal consumer behaviours and decision-making,” warns Co-founder of the Financial Inclusion Centre Mike McAteer. “If anything, fintech provides more opportunities to exploit embedded consumer behavioural biases and utilise confusion-marketing and cross-selling techniques to charge higher prices and extract more value.”
Before big data leads to an era where money understands us better than we understand it ourselves, in the words of digital finance commentator David Birch, it is important to provide citizens with the necessary tools to remain in the know and in control of their financial flows. This is why some researchers and professors are calling for greater use of cash in the classroom for educational purposes, or a general return to cash payments as a solution to overspending.
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