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Financial education day: How has financial education improved over the last decade?
Financial Education

Financial education day: How has financial education improved over the last decade?

The European Commission, for instance, has created a space to improve the general Financial literacy in Europe, with resources accesible to anyone that want to improve these so needed skills.
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4 OCT, 2021

By Constanza Ramos

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Today, Monday 4th of October we celebrate Financial Education Day, a day that aims to raise public awareness of how important it is to become financially literate and the importance of acquiring a level of financial literacy at different stages of life. Undoubtedly, this is a pending issue for many people in Europe. The European Commission, for instance, has created a space to improve the general Financial literacy in Europe, with resources accesible to anyone that want to improve these so needed skills. In its September 2020 capital markets union action plan, the Commission reaffirmed that sound financial literacy is at the heart of people’s financial well-being. The Commission and the OECD are working together to develop joint ‘financial competence frameworks’ for young people and adults.

We have asked Fernando Rojano, Business Development at W&K Financial education, Isabel Giménez, Director General of the Fundación de Estudios Bursátiles y Financieros (FEBF) and Fernando Sánchez de Bernardo coordinator at Value Kids to tell us their thoughts on the current estate of the financial education.

Fernando Rojano, Business Development at W&K Financial education

Financial literacy and the quality and quantity of information available are key elements in decision-making, and are fundamental elements in making decisions on savings and investment. As well as understanding the proper functioning of markets and the economy as a whole.
This was one of the conclusions of the recent analysis of the Financial Literacy Survey of the CNMV's Survey of Financial Competences (ECF).

The current advantage is that the volume of open information available and technological developments make it possible to democratise the supply of financial education and training and to be flexible as well as rigorous. This is something that we have seen clearly at W&K Financial EdTech, with our TFA Accreditation as the knowledge base and for a lifelong learning process, our digital content hub Recertify, which has first-class content partners such as Value School and RankiaPro, which constitutes an innovative model of continuous training for professionals in the sector under MiFID II criteria.

The European directive is the framework for the sector to be more transparent and at the same time to protect the citizens. Therefore, additional initiatives to promote financial education in general and especially for the most vulnerable are essential, especially for young people. Programmes such as the Value Kids, are essential. This is the only way to achieve maturity as a society. Even the rise of sustainable finance requires a real understanding on the part of the citizen and the financial advisor himself. I would say that the goal can never be a fixed point of arrival but we need a mindset of continuous evolution and improvement to be able to adapt to the challenges of the future and to be able to adapt to the challenges of the moment.

Fernando Sánchez de Bernardo, Coordinator at Value Kids

What things could they dream of? Travelling with friends in the summer, buying a smartphone or help a charity project, among others. The challenge is to achieve that dream, and to do so, they almost always have to save in the short term and organise themselves to make it possible, by looking for income and prioritising expenses.

As parents, we strive to give them the best academic and professional education we can, wishing and hoping that tomorrow they can have a good profession that will that will allow them to fulfil themselves as individuals and have a sufficient income.
As adults, we know that they may have to support a family or provide for a better retirement. We are aware that they will have to save in order to be able to carry out this long-term life plan.

Saving is nothing more than not spending in the present in order to spend in the future, either immediately or in the long term. It is essential to be aware of this as a first step towards achieving our goals. It is essential to know ourselves in order to defend us from what some call "the consumer society". It is about acquiring solid consumer habits and avoiding, above all, debt.

We must be able to use the tools available to us to manage money in our day-to-day lives
and stay on track in the long term.
Budgeting or using specific applications can be a great help.

But when we talk about saving in the long term, and we leave our money "parked" in a deposit, as most people do, we should be able to use the tools available to manage our money in the long term as we have the risk of losing purchasing power. It is key, therefore, to understand how inflation affects us. And it is important to know that, in order to defend ourselves from this threat, we can invest our savings in the long term, diversifying them appropriately.

To do this, we need to know what asset classes exist. All of this, at least, is what we should be talking about when it comes to Financial Education with Education in capital letters. And if we want our young people to acquire these financial skills we will have to start being financially literate ourselves first, and develop these skills as early as possible in the family, which is where our young people learn. At Value School and Value Kids we teach Financial Education.

Isabel Giménez, Director of the Fundación de Estudios Bursátiles y Financieros (FEBF)

In a horizon dominated by technologies, without cash (which acted as an abacus for citizens) money, more than ever, seems an abstraction. Financial unconsciousness is taking over, and more and more people do not know, and do not want to know the state of their finances. It is very easy to blame everything on the government, the banks or the economic crisis.

The abuses committed in some cases by fund managers and financial institutions do not help. Today it seems more necessary than ever to know where we stand financially, and the sustainability of our finances.

Finances are necessary and they shouldn't be boring, hence the importance of adequate outreach. I was particularly struck by a rap recorded by a group of young people explaining the functions of central banks. Undoubtedly, for a young audience, learning about finance to the rhythm of rap music is much easier, Let's take note.

Citizens must be aware of the importance of taking time to manage and monitor their personal finances. Only in this way will we be able to make a diagnosis with a roadmap, and in the face of a crisis or a health problem, redirect the GPS.

Nobody goes out into the bush at night without a map, torch and compass, but there are some people who live in financial unconsciousness, without knowing the map of their finances, and as in Alice's tale, if we do not know where we are going, when we retire we will not have arrived at a good port.

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