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This article is the latest part of the FT’s Financial Literacy and Inclusion Campaign
Before I could learn about interest or inflation, I had to teach myself to open the letters. When I was growing up, bills and bank statements were left in a pile, threatening to avalanche. Whatever information they held, the message was the same: my family did not have enough money.
Some people receive lump sums as a legacy, but I inherited a fear of finances. Like many, I received little formal financial education. As I entered a more moneyed world, at university, and then at work, the tone of what I was taught just exacerbated my isolation. To read about increasing my wealth felt futile when there was none.
Financial literacy experts are starting to acknowledge that we must tackle our emotional histories before we can truly master money. In the US, the Financial Therapy Association was founded in 2009 by therapists and financial planners eager to help people understand how their financial histories inform their choices.
Women, in particular, can struggle to talk about finances. For generations, many had little control over their money and were not brought up to be breadwinners. They still earn less than men, while living longer, and they are more likely to get a raw deal from a divorce.
Kate Levinson, author of Emotional Currency, says women can be particularly scared if, like her, they did not observe their mother handling their personal finances. She adds that, for the financially marginalised, this insecurity can be mixed with a sense of failure because society believes their position is their fault. “It is always a soup of feelings about money,” she suggests. “There’s no simple answer other than getting to know your own relationship with money as deeply as you can.”
My experience is common, but it was taboo when I went to university at Oxford. Gradually — and then suddenly — it became clear that my peers were not relying on just their student loans, like me. And they were unaware of their privilege. In the holidays, they paid for travel adventures with what they perplexingly called “savings”, despite never having had a job.
Manisha Thakhor, a financial literacy advocate, says that women are less likely to talk about money at college. In her MoneyZen workshops, she says, women begin to understand their own childhood experiences with money — and by talking to each other, they realise their emotions are not unusual.
At college, I applied for help. The financial aid officers appeared as naive as my peers about life without a cushion of funds.
It was alienating to fill out a form to plan a budget that only allowed for spending on rent, utilities, food and books, as if I could spend three years without buying clothes or going out. My expenses were only counted during the academic year, as if my family could keep me for the other six months. Like everyone on benefits, my mum stopped receiving money for me when I left school.
While I had recognised that denial was dangerous, I was still learning not to assume that other people would understand the financial pressures. When I started full-time work, I could have easily ended up with a payday loan, with a typically high interest rate.
After sleeping on the sofa at home, I had eagerly moved into a London flatshare without realising that my pay would be only a training allowance during the first three months. When I tried to buy pizzas at a cheap supermarket to celebrate my birthday, my payment card was rejected at the till. I was lucky to have a well-off friend who lent me £600 until my salary started.
Another act of kind understanding helped me overcome the pressure to maximise money in the present, rather than invest in the future. I owe my career at the Financial Times to unpaid, or barely paid, work in journalism while at university. I could afford to undertake poorly paid assignments thanks to a Great Expectations-style anonymous benefactor, a former student from my secondary school. Whoever you are, your £1,000 worked wonders.
What can we do to improve financial literacy for all? We teach it best when we understand people’s financial realities and when we acknowledge that money is innately emotional. We need to show young people how to understand their feelings about money, including issues such as the temptation to overspend in order to feel they belong, or the fear that all investments look too risky if they have struggled to build a nest egg.
Thakhor says her workshops became much more effective after she switched around the order of the day in order to start with learning about participants’ emotional responses to money — before launching into the facts about finances. “We learn the logistical parts a lot better when the emotional is acknowledged,” she says.
Tackling my own emotional relationship with money helped with learning about mortgages and investments — and I hope that outlining my experiences will help others to do the same.
Twelve years after starting at the FT, I have finally saved enough money for a deposit on a London flat.
And when I buy my first home, I will continue to obey the most important financial rule I ever taught myself: opening those letters before I even take off my coat.
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