Alick Varma was keynote speaker at a Leap 100 Power Breakfast on 1st December 2015.
The following blog first appeared on The Entrepreneurs Network website.
When I was 11 years old, my parents sat me down and said: “Alick, we’d like to talk to you about the P&L of your life”. I responded by asking what a “P” and an “L” were. They explained how much money was being brought into the household, how much was being spent on me, and they said they wanted to give me as much responsibility as possible for the money I needed to survive.
Whereas the average teenager gets pocket money of £5.36 a week, I was given £250 a month from the age of 11. With that, I had to buy my own clothes, pay for my own travel; I even bought a new tennis racket. At one point my parents suggested I pay my own school fees! But apparently my bank account had limits which prevented that from happening.
When I arrived at university, I was handed a £3,000 loan – the second largest loan we are given in our lives. Because I had been managing my own money for seven years the first thing I did was get out a piece of paper and write out a budget. It wasn’t until then that I realised no one else had been taught to manage money. Similarly, when I went to work at McKinsey, my colleagues – people who were incredibly intelligent and earning a good salary – had the same problem. I even had analysts offer to buy my Excel spreadsheets, because they’d never set a budget before.
We are living in a world where over 75 per cent of 18-30 year olds say they have made at least one major financial mistake in their lives by the time they reach 30. This is a big problem, worsened by the fact that we have financial systems which benefit from those mistakes.
Read the full article here.