I was about to start writing an outline for the new Financial Education programme that I will deliver in Scotland with my colleagues from Speakersbank sponsored by a major global bank when an e-mail from the CIPD ( the UK body for HR professionals) arrived in my inbox which lead me to this ( incredibly detailed) article about why HR people need to understand the financial side of the business they are in.
It got me thinking about what levels of financial literacy we need.
Lets think about the basics
The training I am preparing is aimed at young people in school. The English and Scottish school curriculums are different but I think ( hope) that their aims to develop knowledge of money and how to manage it - personally and from a business perspective - are similar. The Scottish Curriculum for Excellence outlines stages under the heading of “Money” which sits under the main heading of Maths starting at early years in recognising what money looks like and is for through to being able to compare financial products and make informed choices. Our training - over one school day- will be aimed at speaking about issues like comparing costs when making buying decisions, the costs and benefits of using bank cards and considering savings and credit.
When working with youngsters on this topic recently I was encouraged by how much they knew about money and related this to their own spending habits. The media coverage of the banking crisis clearly had had an impact on their knowledge ( and views ) on what banks do. But when I spoke about this more generally I was struck by how many people were surprised that it needed to be taught in school and when I questioned where they learned about money the usual answer is from their parents. Now I hate to have to say this - but sometimes, in some areas , doing what our parents did is not necessarily a good thing! But knowing what to do with your first salary payment when you leave school can be really helpful in preventing some of the financial disasters that lurk out there.
Then the obligations
Then there is understanding your financial obligations regarding outgoings about which you have no choice. I spent many years as a tax consultant specialising in personal tax. The UK income tax system is very very complicated ( is there a simple tax system anywhere?) but the basics are that everyone has an allowance up to which no tax is due. For employees, that allowance is divided into 12 monthly chunks and is allocated against the income for that month before tax is charged. National Insurance Contributions are also due on income between certain levels. I have lost count of the times when people tell me they were surprised ( shocked actually) how much tax they had to pay when they started work and can only assume that they did not learn this at school. That needs to be addressed too and I am sure that it will be.
Finally finance in relation to business
One of the sections on the Money part of the Scottish Curriculum though is ” I can use the terms profit and loss in buying and selling activities and can make simple calculations for this” and I think this leads neatly into what they CIPD article talks about. This is aimed at “decision maker” level HR professionals and I liked the comment from Vanessa Robinson when she said “A big part of business is making sure that the books add up. Not being able to do that means it’s harder for you to connect and converse with the people you are working with.” . Absolutely.
I believe though that any employee at whatever level who has a clearer idea of how businesses work have an advantage in that they can understand the issues that affect their own business. For example an employee who feels unhappy with their current salary level and who can access and understand the company accounts will be better placed to negotiate - or, as may be more the case right now, understand why increases may not be possible.
So as I go back to my writing the school programme please tell me what do you know now that you wish you had learned about money and finance when you were at school that I should include. And what do you know now about finance in relation to business that you think could be helpful for all employees to learn?
My son graduated from Napier Unversity yesterday. Along with his sister’s graduation a couple of years ago this was one of the greatest days of my life. I had a huge lump in my throat and my heart was swelled with pride. Every graduate had worked hard to get there. The speakers reinforced the messages that they should celebrate success that day, be proud of their achievement and to go out into the world now and show what they can do!
As is often the case the University also conferred honorary degrees. Yesterday one of the recipients was the actor Brian Cox.
Speaking to the assembled graduates Brian told his story. Growing up in Dundee he lost his father when he was very young and his mother did not keep good health. He was judged to be “educationally subnormal” when he was 11. Despite this he said that he felt it was his responsibility to learn. He was very close to his aunt who took him to the cinema and he decided he wanted to be an actor. With hard work and determination of course he has achieved huge success in both the theatre and in movies - most recently in the Bourne movies.
Imagine labelling a child like this? We live in different times and I hope that his sort of judgement is never passed down now.
But there are people out there who were written off at school and proudly tell how they overcame that. I met a guy a couple of years ago who was making a presentation to a group of business people. It was an interactive session and we became aware that what he was writing on the flip chart was nonsense - to the audience anyway. He deliberately left it a few moments before sharing that he was dyslexic. He had been told he would not amount to anything - and he had shown through the success of his business that that prediction was wrong. And he used his “disability” very powerfully to reinforce the message.
As a final note I really loved this quote - what do mothers know anyway!
Brian said ”My mother would be so proud if she was still with us. As she often used to say: Och, Brian’s a nice laddie, but no’ awfy bright.’”
I am indebted to Jacob for drawing my attention to this great story.
I went to the local mall to try to finish my Christmas present shopping yesterday. There is an advert on TV for a store which depicts people in an ordinary high street running around manically with a desparate look on their faces trying to do that very thing with the song “It’s beginning to look a lot like Christmas” playing the background. Believe me that advert could have been filmed at the mall.
In amongst all that mayhem my Dad called to say that he had had the “all clear” from the hospital after a recent procedure. That made me smile and stop to take a breath.
Back to my desk to catch up on e-mail etc and then off to a Christmas carol service hosted by my husband’s previous employer. A long bus journey negotiating traffic which seemed in keeping with the everbuilding panic I arrived at the church just as the doors were closing.
And then….the minister welcomed us and thanked us for taking time out of our hectic schedules to come together to share an hour of calm and reflection together.
How wonderful.
By choosing to do something so lovely and traditional I had slowed right down. The impact was amazing. Added to that a mince pie and some mulled wine ( taken responsibly) the knots in my shoulders and tension lines on my face disappeared!( no need for expensive potions)
I know it is difficult for everyone but try to take a wee bit of time for peace and quiet today. You will feel the benefit - trust me.
I have decided that the posts from now til Christmas should reflect the lightness of the season.
Today I was responsible for holding the fort - otherwise known as running the school office - as my dear colleague Fiona was ( very unusually) off sick. I can’t remember a day passing so quickly. I was late with school dinners calculations and registers. I took phone calls on all manner of things - using my wits - or a willing passing colleague - to get the answers.
I have to admit to being a tiny bit frazzled by the end of the day. Parents were turning up to collect their children at the , some wanted to speak to me ( well really they wanted to speak to someone who knew what they were doing) and - a bunch of little people just out of their Christmas party were running about my feet. I took a breath - and asked them to get out of my office as I was busy. And one little chap piped up -
“It’s not your office. It’s Miss Ash’s”
Well that put me right in my place. She can have it back with pleasure (only when she is well enough you understand). It’s only when someone you depend on suddenly is not there that you realise how well they bring all the strands of a complicated puzzle together seamlessly.
