When I started writing about money, nearly ten years ago, I wasn’t exactly the most popular person in the room at a party. Banking, saving, credit, pensions… all misunderstood, even jokily disregarded by most people I met.
If I had to sum up the typical sentiment I encountered, it was: “Personal finance? Yikes! Let’s change the subject.”
I totally understand why. By the early 2000s, society no longer valued money management as a life skill. Compared to the frugal mindset that ruled in years gone by, spending was high, saving was low and debt was seen by most as the solution to most problems.
Even Scotland, a nation built on prudence, had lost its way. Financial education was hardly anywhere to be seen, while banks were resting on the laurels of our apathy by mis-selling products and taking outrageous risks that later unravelled in the financial crash.
Since then, there has been a gradual but powerful awakening. “How could this happen, right under our noses? How can we prevent it from happening again?” Many began to understand that change must occur at an individual and social level.
Today, I admit that most of us still don’t feel that confident about money. But the feeling out there is more: “I know I’m bad with money – what can I do about it?”
And that’s tricky to answer. Some say that it’s never been easier to get on top of our finances. Others argue it’s never been harder.
Take technology. Internet – and later mobile-first – finance has transformed the way we manage money. Banks and investment companies increasingly compete based on how quick, intuitive and helpful their apps are. They have been forced to up their game by digital upstarts, aided by post-2008 regulations designed to disrupt the banking monopoly.
Some brands, such as Monzo and Starling, are shaped and worshipped by young, tech-savvy hipsters who prize smart tools that track spending and ‘nudge’ them to save.
But technology is a double-edged sword. Bank branches are closing across the UK. Cash could be phased out altogether in favour of contactless cards, mobile wallets and crypto currency.
These newer payment methods make money an abstract, virtual concept – one that’s harder to keep a grip on. And Bitcoin itself has become a whole new asset class, bringing risks and change that everyone may be underestimating.
The demise of cash could also leave behind many vulnerable groups in society. These range from Scottish rural communities dependent on the ‘last branch in town’, to the 140,000 Scots who are unbanked. You can only do so much with your money if you have very little to start with – the reality for an increasing number of Scots, according to official statistics.
Fortunately, Scotland is rediscovering its past reputation for financial innovation. New schemes are aiming to improve both financial inclusion and financial education, the latter now being on the Scottish curriculum though lacking the resources, dedicated time and skilled teaching to really make it happen.
It’s clear that technology alone can’t be a panacea, not least because the cost of these new and seemingly free services is actually our data, an experiment with – as yet – unknown results.
And with technology comes the rise of sophisticated cyber-fraud, an inevitable by-product of frictionless services.
All that said, personal finance is not just about technology. The clue’s in the name: it’s personal. It amazes me just how much can be achieved by taking that first step: just thinking and talking more about money.
Half of all households still don’t budget. Financial disagreements are still the main predictor of divorce across all income brackets. Most of us aren’t considering both the opportunity and cost of the 100-year life, though a small uplift in saving today produces thousands more for our retirement.
Plus, so much can be gained from switching bank accounts and utilities. So why don’t we do it? Are we happy as we are? Or just bad at prioritising “life admin”?
Iona Bain is a personal finance journalist and the brains behind the Young Money blog