- One third suffers a monthly household budget deficit
- 9% exceeds their overdraft limit every month
- Education could help millions avoid unnecessary debts every month
- Free Managing My Money course made even more accessible to help millions take control of their finances
Millions of Britons are being urged to improve their personal finance skills as they admit to struggling to balance their monthly household budget. New research shows that as many as one third (33%) of Brits regularly faces a monthly household budget deficit – by consistently outspending the money coming in.
The findings come from Open University Business School’s (OUBS) dedicated research centre, The True Potential Centre for the Public Understanding of Finance (PUFin), an initiative instigated and supported by financial services and technology firm True Potential LLP. In response to the findings the OUBS has now made the centre’s free online Managing My Money course available on its OpenLearn platform – enabling anyone to access the content at any time.
Previously Managing My Money, was only available to the general public via the OU’s online social-learning platform, FutureLearn. By hosting the course on OpenLearn platform any element of the course can now be taken at any time and in any order, enabling learners to prioritise which money management skills to develop.
And with the research unearthing a lack of basic financial planning, the omnipresent newly accessible course could be set to help millions. A staggering 46% of Britons admit that they never keep a household budget – most of which (20%) rely on ‘guessing’ their incomings and outgoings, 9% can’t be bothered to try, 5% don’t see the point as they’re always ‘in the red’ and 4% simply ‘don’t know where to start’.
The upshot of this is that almost one-in-ten (9%) British adults exceed their overdraft limit every month and 25% do so at least once a year. A further 5% of Britons also defaults every month on a utility or council tax bill, whilst 3% miss monthly mortgage payments and another 3% miss monthly credit card payments.
For these people, understanding how to put together a simple household budget could be the lifeline they need as 11% of those surveyed see a shortage of just 10% in their monthly budget – enough to create huge financial problems over the long term but small enough to rectify with some careful financial management.
Director of the True Potential Centre for the Public Understanding of Finance (PUFin) at the OUBS, Martin Upton said:
“It’s sad to see that so many people are struggling to balance their household books. And whilst we accept that some people’s situations may be beyond simple financial education, we firmly believe that it has a huge role to play in getting the nation’s financial health back on track. Back in the spring we launched a new course called Managing My Money – a Massive Open Online Course (MOOC) aimed at helping families better understand and manage their finances. The course has been a huge success with over 15,000 students registering in the first month. Hosting the course on the OU’s OpenLearn platform will have an even greater impact – making the course content permanently accessible to everyone.’”
David Harrison, Managing Partner of True Potential LLP said:
“The True Potential Centre for the Public Understanding of Finance (PUFin) was formed with the belief that greater access to financial education is part of the solution to closing the Savings Gap that exists in the UK. Britons are saving nowhere near the amount they need for a comfortable retirement, and as this research shows, many are struggling to manage their money on a monthly basis. Improved household budgeting can not only help to avoid getting into unnecessary debts every month but can also allow savers to put small sums aside to meet their savings goals, whether this is to save for retirement, a mortgage or other life event. We are delighted to have partnered with the Open University Business School to deliver the vital financial education needed to close the Savings Gap.”
Managing My Money, is available on OpenLearn now. For more information on the course and OpenLearn or to register visit www.open.ac.uk/pufin