Best financial rule I’ve ever learned? Open invoices

This article is the last part of the FT’s Financial Education and Inclusion Campaign

Before I could learn about interest or inflation, I had to teach myself how to open letters. When I was growing up, bills and bank statements were left in a heap like an avalanche. Whatever information they had, the message was the same: my family didn’t have enough money.

Some people receive lump sum inheritances, but I inherited a fear of finances. Like many, I received little formal financial education. As I entered a richer world, at university and then at work, the tone of what I was taught only exacerbated my isolation. Reading about increasing my wealth seemed futile when there was none.

Financial literacy experts are beginning to recognize that we need to come to grips with our emotional stories before we can truly master money. In the United States, the Financial Therapy Association was founded in 2009 by therapists and financial planners who wanted to help people understand how their financial history influences their choices.

Women, in particular, can find it difficult to talk about finances. For generations, many have had little control over their money and have not been brought up to be breadwinners. They still earn less than men, while living longer, and they are more likely to be penalized by divorce.

Kate Levinson, author of emotional currency, says women can be especially scared if, like her, they don’t see their mother managing their personal finances. She adds that, for people who are financially marginalized, this insecurity can be mixed with a sense of failure because society thinks their position is their fault. “It’s always a soup of feelings about money,” she suggests. “There is no simple answer other than to get to know your own relationship with money as deeply as possible.”

My experience is common, but it was taboo when I was at Oxford University. Gradually — then suddenly — it became clear that my peers weren’t relying solely on their student loans, like me. And they ignored their privilege. During vacations, they paid for their adventure trips with what they perplexedly called “savings,” although they never had a job.

Manisha Thakhor, a financial literacy advocate, says women are less likely to talk about money in college. In her MoneyZen workshops, she says, women begin to understand their own childhood experiences with money — and as they talk to each other, they realize their emotions aren’t unusual.

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In college, I asked for help. The financial aid workers seemed as naive as my peers about living without a cushion of funds.

It was alienating to fill out a form to plan a budget that only allowed for spending on rent, utilities, food and books, as if I could go three years without buying clothes or going out. My expenses were only counted during the school year, as if my family could keep me for the other six months. Like everyone else on benefits, my mother stopped receiving money for me when I left school.

While I had recognized that denial was dangerous, I was still learning not to assume that other people would understand the financial pressures. When I started working full-time, I could have easily ended up with a payday loan, which usually had a high interest rate.

After sleeping on the sofa at home, I had eagerly moved into a flat share in London not realizing that my salary would only be a training allowance for the first three months. When I tried to buy pizza from a cheap supermarket to celebrate my birthday, my payment card was rejected at checkout. I was lucky enough to have a wealthy friend who loaned me £600 until my salary started.

Another act of loving understanding helped me overcome the pressure to maximize money in the present, rather than investing in the future. I owe my career at the Financial Times to working unpaid, or barely paid, in journalism while I was in college. I could afford to undertake poorly paid assignments thanks to a great expectations-style anonymous benefactor, former student of my high school. Whoever you are, your £1,000 has worked wonders.

What can we do to improve financial literacy for all? We teach it best when we understand people’s financial realities and when we recognize that money is inherently emotional. We need to show young people how to understand their feelings about money, including issues such as the temptation to spend too much to feel like they belong, or the fear that all investments will seem too risky if they have had struggling to build up a nest egg.

Thakhor says his workshops became much more effective after reversing the agenda to start by learning more about participants’ emotional reactions to money – before getting into the facts about finances. “We learn the logistical parts much better when the emotional is recognized,” she says.

Addressing my own emotional relationship with money has helped me learn more about mortgages and investments – and I hope describing my experiences will help others do the same.

Twelve years after starting at the FT, I’ve finally saved up enough money for a deposit on a flat in London.

And when I buy my first home, I will continue to obey the most important financial rule I’ve ever taught: open those letters before I even take off my coat.

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