The Surprising Reasons Behind Ireland's Declining Scores
Financial literacy is not just a buzzword - it's a crucial life skill.
That’s the TLDR.
Understanding money would come as standard at this stage. But I have to tell you: Ireland has one of the lowest rates of financial literacy in Europe.
Here are my thoughts on why…
As a child of the 1980s, I witnessed a massive shift in literacy in our culture. We were a poor country on the edge of Europe, struggling with high unemployment rates and limited job prospects. The government recognised the need to equip the nation with essential reading and writing skills to improve our economic situation. This was a significant change for us, as basic literacy was not given for the average person until then. We were unsure what our future would look like, and financial literacy was not a priority.
The goal was to ensure that the average person could read and write well enough to navigate society easily, such as reading the brown envelopes with the harp on them, school books, road signs, warning signs, and all the things we take for granted now.
We did it. We succeeded in giving the vast majority of this tiny Island the ability to read and write, a genuine leap forward from our previous poor existence. Fast-forward only a few short years, and this basic literacy is taken for granted. Now, we can read restaurant menus, maps, and newspapers and have no excuse for not doing our taxes.
Better still, we can rest assured that our children will be taught the same and much more. They will learn faster and more profoundly than we could only have dreamed of.
The past is quickly forgotten.
It can be hard to think of a life without these basic skills, but it wasn't long ago when it was a real challenge that faced many families in Ireland up to our very recent history. But it is new, as is most of our high standard of living.
One of the beauties of being human is that we adjust to change quickly. Because of this, we can be forgiven for taking basic skills like literacy for granted. We've zoomed so far past these basics that Degrees and Master's degrees in technical areas are commonplace. We are a powerhouse of tech, pharmaceuticals, and finance.
Show me the money
Given our rapid modernisation, leaping from what could have been a third-world country to a modern first-world society with one of the highest GDPs in the world, it may take a lot of work to bring all areas of education and life in line evenly. Inevitably, something gets dropped through the cracks.
For us, it was our financial literacy.
We figured out how to make money but never had the time to learn how to use it.
The importance of learning the language of money.
Learn the skill of healthy money management to use the tool of money like a master craftsperson.
Financial literacy is a skill that, like any other, requires time and effort to master. But the beauty of it is that the more you invest in learning, the greater the rewards. These rewards can transform your life, offering a sense of security and confidence that can make a world of difference. Instead of feeling like life is happening to you, you'll be in control, making informed decisions that shape your future.
No one is spared
I've seen this time and again when I coach; I have the privilege of working with some of the most intelligent, highly educated people out there; they know their craft. However, when it comes to the life skill of money, it eludes them, and it's understandable why. I, too, was once in their shoes. Despite my education and professional success, I struggled with financial literacy. It wasn't until I invested time and effort into learning this skill that I was able to take control of my finances and shape my future.
The money proof is right in front of us
Don't just take it from me. Recent statistics from the Bank of Ireland's Financial Wellbeing Index paint a concerning picture. Financial literacy among 18 to 24-year-olds has declined, with their score dropping from 52% to 48% in 2023. This decline underscores the urgent need for a stronger focus on financial education, particularly for younger generations. The time to act is now, and your financial future depends on it.
And women's confidence in financial literacy lags behind the men in our lives.
Mairead McGuinness, European Commissioner for Financial Services, Financial Stability, and Capital Markets Union, commented:
"Being financially savvy, especially in a digital era, is an important life skill. Knowledge is power, and empowering people to make informed money decisions is good for individuals, families, and society. For young people, being financially savvy means being better prepared as they study, set out in their careers, and start managing their money independently.
"We know that levels of financial literacy in the EU are low, especially among young people. The results published today reinforce that body of evidence and should strengthen us all to do more and better and I welcome Bank of Ireland's focus on investing in financial literacy, particularly in programmes for young people."
What is financial literacy anyway?
Financial literacy is more than just managing a budget; it's about understanding how to save, invest, and navigate the complexities of financial products like mortgages and credit cards. For instance, it involves knowing how to compare interest rates on loans, understanding the implications of compound interest, and reading and understanding financial statements and budgets.
It's also about building resilience against financial scams and fraud, which can have long-lasting consequences for those caught in their traps. These scams can include identity theft, pyramid schemes, or phishing emails that trick you into revealing your personal or financial information.
Informed Decisions feel great
Financial literacy is about making decisions about your money that are best for you rather than following the latest shiny new gadget or toy. If you want more control in this area, check out 'The No Spend Revolution', a money revolution that encourages you to turn off the autopilot habits and switch on actions that make your money work for you in a great way. By playing the spending game on your terms, you can develop a healthier relationship with money and improve your financial literacy.
Why is this important?
Financial literacy is not just about managing money; it's about empowering you to make informed decisions that lead to better economic security and independence. With this skill, you can confidently navigate financial products, make strategic investments, and plan for your future. It's a critical tool for avoiding financial pitfalls, especially for young people just starting to manage their finances independently.
Final thoughts
By mastering this skill, you're taking a significant step towards a more secure and independent future.
Knowledge is power, my friends.
PS:
If you're ready to level up your money game make sure to grab my FREE eBook from out of control to cruise control, 20 simple things to transform your money life here.
If you want to find the money you never knew you had and save thousands this year and every year check out The No Spend Revolution.