A survey by Harris Interactive in the USA revealed less than 50 per cent of young adults have a good grip on their finances. Poor personal accounting has led to around 25 per cent of young adults spending more that their income on a regular basis. Mounting debts appear unexpectedly inducing many to overlook the benefits of managing separate current and deposit accounts . Around 10 per cent go on to refinance their debts through extortionate other non bank loans.
One of the gaps in the curriculum is an effective programme in personal and small business accounting. This would cover the needs of the individual who wants to effectively manage their personal affairs as well support any venture in starting their own business. A couple of years ago Sage accounting in the UK launched a package to train students in small business finance. The course required training and considerable commitment by teaching staff on the programme. It also needed space in the timetable to complete the training, not always easy when targets hover constantly. Without a specific slot in the national curriculum this vital activity will possibly remain a rare option.
To overcome the inherent gap in students and young adult comprehension of finance, First Command Educational Foundation(FCEF) in the USA has launched its new mobile app, SavvySaver. The app covers Spending Plans, Basic Banking and Accounts, Credit, Debt and Loans, and Investing. Originally designed for secondary students and young adults, it has an application with a much wider and older audience. The object is to save enough money in a “savings account,” by correctly answering questions to meet a desired financial goal: a car, holiday, university fees, a home, or retirement. Users can answer questions without reading the text material, but if they don’t answer enough questions successfully they are required to read the material to proceed further. Successful players will see their “savings account” grow as they progress towards their goal. The app also has a pre- and post-quiz to help FCEF gauge its effectiveness.