Christopher Johnson: Welcome to Morningstar. My name is Christopher Johnson. Today I'm joined by Olamide Majekodunmi, Personal Finance Expert and the founder of All Things Money. Olamide, thank you so much for being here with me.
Olamide Majekodunmi: Thank you so much for having me.
CJ: My first question to you is, what are the questions that you hear from young people about personal finance?
OM: Good question. So, I think a lot of questions that I get now about investing, I think that's the most popular topic, because I think investing has become such a popular topic now on social media. Everyone kind of wants to know how they can take part or how can they do it safely because I think there's so much going on in social media now that people – yeah, I think investing is on the tip of people's tongues a lot.
CJ: What would you say maybe are the dark sides to young people only getting access to financial knowledge from social media, for instance?
OM: Yeah, I think it's hard because whilst there's so many reputable content creators out there sharing good knowledge, there's also people that might not be as truthful and honest as what other people are. So, I think there's a lot of misinformation being spread on social media across loads of different platforms as I'm sure you're aware of, but I think that's probably the most worrying, because where loads of young people now get their information from social media, you need to make sure the people who are getting it from are truthful and honest. It's a shame across the U.K. that there's such a huge lack of financial education and I think it would be great to see personal finance education being taught in schools as well because I've said a lot of young people are now looking to social media, I think it's really important that we're able to support them outside of those platforms as well so they know that they can navigate adulthood successfully and confidently.
CJ: But why do you think in the U.K. we've neglected this topic if it's of such importance?
OM: I wish I knew the answer, but I do understand that teachers are under massive constraints. If the teachers weren't taught personal finance, how can they then teach young students how to manage their finances? I think we're in this ever-growing cycle, but it needs to be broken one way or another and I think that starts with implementing personal finance education from primary school age, because apparently, that's where young people start establishing money habits and apparently, they form from as young as seven.
CJ: Wow, as young as seven-years-old.
OM: Yeah.
CJ: And that can then impact somebody's whole life.
OM: Yeah, exactly that.
CJ: And it's really interesting you mentioned that a lot of young people are wanting to learn more about investing. Have you seen this shift since the pandemic? When did it begin?
OM: Yeah, I think since the pandemic, especially with the cost of living crisis, I think loads of people are looking at ways to try and make more money or at least diversify their streams of income and I think investing is probably a very popular way of doing so. So, I think loads of people want to know how to kind of make extra streams of money, so I think that's why people want to learn more about investing.
CJ: What tips do you give to young people in a cost of living crisis to be able to ensure that they are earning more money so that they don't feel so uncomfortable with everything going on at the moment?
OM: One of my biggest ones is budgeting. I think all young people need to start with a budget because I work with so many young people that tell me they want to save, they want to invest, they want to buy a house, but I'm like, okay, where are you at financially, and people don't even know that question. They don't know the answer to that question. So, I think it's really important that they start with a budget. Once they've established a budget, they then know how much they can afford to then save or invest. So, I think that is one of my biggest tips. And then also to build the emergency fund if they have the disposable income to do so. And I guess lastly also finding ways or multiple ways of diversifying your income streams as well I think that's really important. So, yeah, those are my top three tips.
CJ: As somebody who needs to become more frugal this year is one of my newest resolutions, in regards to budgeting, what do you think are the best ways for somebody like myself to do so?
OM: Good question. I think the number one tip when it comes to creating a budget is to actually just work out what's coming in and what's leaving. I think a lot of people again over-complicated what a budget is. So, yeah, work out your incomings, your outgoings and after that you want to establish, okay, how much can I then afford to live off, so by doing that you want to deduct your expenses from your income and that should hopefully leave you with some money to then spend, save or invest. Personally, I work out a weekly budget so I know how much I can spend on a weekly basis and that's what I recommend loads of young people do as well.
CJ: As an advocate for young people in personal finance what do you think we need to do to try to build more trust and to engage with a younger investor in particular because one could argue that they are a bit more suspicious or a bit more distressing of institutions.
OM: Yeah, good point. I think what I've learned since starting All Things Money I think it's just really important that any information that's shared whether that's by Morningstar or other institutions is relatable, digestible and there's just no jargon. I think it automatically excludes or isolates people the minute you start using really technical words especially when it comes to investing. So, I think there's so many words around that topic anyway, so I think it's really important – if you want to engage young people well, I think it's really important to look at the language being used and that it's being shared by people that are relatable as well.
CJ: Olamide, thank you so much for being here. It's Christopher Johnson from Morningstar UK.
