On each day of our Learn Money Week financial education campaign, we will be featuring a guest blog from key stakeholders, i.e. the people who collectivly help achieve financial literacy.
Today we present the thoughts of Syed Kamall MEP for London and Leader of the Conservative Party at the European Parliament.
While few economists predicted it, with hindsight it is easier to understand why the financial crash of 2008 and subsequent recession took place. There was simply too much debt held by governments, banks, companies and households. While the banks were bailed out with taxpayers’ money, most households rarely get bailed out when they get into debt. So we have to act responsibly with our money as individuals – and in future make sure Governments act more responsibly with our money as taxpayers.
One way to keep Governments, central bankers and financial regulators on their toes is to increase financial literacy of as many of our citizens as possible. We all have to learn the lessons of the financial crisis and we shouldn’t be spending money we haven’t got. When we take out a loan or mortgage or buy something on our credit card, we are really taking on more debt, which at some point has to be paid back.
A recent report from the Centre for Social Justice found that household debt has doubled in the last decade with rising numbers of families falling into a borrowing “trap”. This needs to change so people know when to ask for help and advice before their debt becomes out of hand and unmanageable.
Organisations like MyBnk which go directly into schools to help teachers educate their students are doing a fantastic job. Learning about what money is, how banks work, how to make a loan and how to save and spend money are hugely important things that we must all learn.
If the politicians of recent times had been given a lesson in basic financial management at school, maybe governments would have lived within their means, maybe our country would not have so much debt and maybe we might all today be a lot better off!
Syed Kamall MEP.