For our third episode of Break The Cycle, we were super excited to invite Marco Logiudice, co-founder of Prograd, onto the show.
Financial literacy leads to a healthier, happier life. Despite this fact, only 50% of the UK have a basic level of financial education (this includes knowing how to budget, knowing how to track your spending, understanding debt & credit, and knowing how to save and invest).
Prograd helps people make smarter financial decisions. They provide a range of tools and community forums, and suggest ways for customers to earn, save and borrow sustainably.
We chatted about their mission, how companies can make financial education more accessible for their customers, and what people can do to lessen the blow of the cost of living crisis.
Abi: Welcome back to Break the Cycle! Today I've got Marco from Prograd with me and we're gonna be talking about financial education, why it's so important and how Prograd is equipping young people with the right tools. So I'll hand it over to you Marco, would you like to tell our listeners a little bit about what it is you guys do at Prograd and what you're trying to achieve?
Marco: First of all, thank you so much for having me, it's a pleasure to be here. I'm the co-founder of Prograd. So what Prograd does is we help young people navigate through finance for the first time and in particular, the focus is on helping young people get educated about different financial products and then be able to access them and manage them in the most sustainable way. The focus for us, and really the mission, is to help create a new generation of young people that are empowered by finance instead of being scared of it.
Abi: So why is it that financial education is so important?
Marco: So financial education is important for a variety of reasons, not just for young people, but for people in general. There are lots of studies that speak about how financial literacy and education correlate highly with life satisfaction and life outcomes. But ultimately financial education is really important to build the foundation for your life and be able to make good life decisions and financial decisions. When you're thinking about financial education in the UK in particular you're looking at a major problem because less than 50% of people in the UK, in general, have basic financial literacy. That's basic stuff. Just being able to pay your bills or understand how to save and invest. If you're thinking about Gen Z, so young people, that percentage skyrockets. So financial education for us is being able to help young people make better decisions for them. It's really important in order to progress in life and the earlier we're able to support them with this topic, the better it will be for their life overall.
Abi: I mean, it's really shocking that figure 50% of people don't have a basic level of financial literacy. So just to be clear, a basic level would include knowing how to budget, knowing how to track your spending, understanding debt and credit, and saving and investing. So how do you go about making financial education accessible?
Marco: So it's quite tricky because when you're thinking about financial literacy and education, this is not something that is typically taught at schools. So very few people actually even had a lesson around basic financial literacy. So the way we're looking at financial education is really something that should start in school, ideally should start from your household, but we recognize that there are differences carried over from a generational point of view. If your parents didn't have that financial literacy it's unlikely that they will be able to pass it on to you. And so there's a great opportunity for companies to support young people in being educated financially and to us, financial education is really about three things. It's about it being digestible and consumable, so how can we create it in a format that resonates with the demographic that we are trying to help? And we could put 10 pages of financial terms and jargon and in theory, it would be great, but then it's not digestible.
Then it needs to be actionable. So how can you actually make sure that the person can utilize this information to improve their life and make better financial decisions?
And the final thing is that it really needs to be personalized. Each of us is going through a different journey in life, and there is technology now that enables you to personalize the experience for each of your customers to make sure that they get exactly what they need to succeed.
Abi: So what would your top three tips be to young people looking to be in control of their finances, especially now during the cost of living crisis?
Marco: Yeah, that's a great question. I feel like the first thing, as you've said, is to be in control. To make sure that you look at everything that's coming in or out of your bank account. We are now in a time where it's easier than ever to do that. Your bank may already give you a breakdown of what you're spending your money on, or there may be apps that help you budget. It's really important for you to know exactly what's coming in and what's going out. Maybe you have a direct debit or things that you may think are quite small, but then end up in aggregate to be quite substantial, and so you need to be just aware of them.
So that's the first thing. The second thing is to think long-term and not look for quick fixes. What I would push on is to think about what is the impact of your decisions of taking out certain products, taking out a loan, or taking out a credit card or a Buy Now Pay Later product on your long-term financial wellbeing.
And then the last thing that I would say is to be on the lookout for opportunities because obviously, it's a very difficult time, but as with every type of disruption or everything that happens in someone's life, something always comes up as an opportunity. And we've seen the same thing in the previous financial crisis. I'm not saying that there is a financial crisis, of course, we are in a recession, but the most important thing is to be able to think about what opportunities may arise for you personally that would allow you to go to the next step, especially if you're young or if you're building your career. Many things will happen that will shake up your life and potentially create new opportunities for you to shine to a new level.
Abi: So could you give me an example of a tool which is, like you say, digestible, actionable, and personalized?
Marco: 100%. So from our perspective in Prograd, the entire customer journey is really focused on these three things. To give you an idea, when you come onto our site, you may put the amount of money that you're looking for, and the reason why. The first thing that we do is give you access to clickable content throughout your journey. So that means that for every financial term that may be jargon or difficult to understand, you can just click on it and a video will come up with a clear explanation of how everything works. And that's embedded in the journey, rather than having a space or a dictionary that says "these are all the terms", because you go through the journey and then you discover things that you don't know. But then for us, what's really important around the actionable and personalized piece is really to give you an idea of all the options that are tailored to you to solve the particular problem that you have. So if you're telling me, for example, that you need £500 to buy your new laptop, what we really focus on is how can we help you get the £500. We don't want you to borrow, so how can we help you do it in different ways? Maybe there are opportunities to earn money instead or save your way to the £500.
And then if neither of them works, if you want to borrow, we show you how borrowing works; "these are the things you should be aware of and you should be very conscious about". And we only show you certain offers from certain providers, so we make sure that we don't have predatory lenders on our site.
But yeah, what's really important to us is to give you the idea of options and thinking at a higher level. It's not just about products - if you want to take out a credit card, maybe you should think first about how you can earn your way to the money that you need, or save it.
Because most of the time you already have what you need. You just need to find a way to get it out. The reason why Ethan and I started Prograd is because we went through a personal problem, which effectively was that we were both getting offers for a master's. Ethan was going to study at UCL, I was going to study at Cambridge, but neither of us could really afford to go and study there. And neither of us could accept not goi as well, just because we couldn't afford it. And so we went and just tried to figure it out and eventually we took out a loan that is forcing us to repay double the amount that we borrowed. And so we thought it is unacceptable that someone that has got potential, or even just has a dream, has to go through all these trials and tribulations to try and get the money to fulfil something that they're capable of doing. And so we decided that it's really important to help young people be educated about the options that they have, especially from a financial point of view to make sure that what happened to us doesn't happen to someone else. And if you want to go and study at a university that can open doors for you, you're going to be able to do that sustainably and most importantly, with intention, knowing exactly what you're doing and why you're doing it and what are the pros and cons of any decision that you're making. And so yeah, that is why we started Prograd. We officially started working on Prograd a year ago in September, and it's been an amazing journey so far and I'm really excited about what's coming next.
Abi: Awesome, so are we! Thanks for joining us, Marco.
Marco: Thank you Abi, pleasure.
Abi: If you'd like to hear more, you can subscribe to our newsletter on Ophelos.com. And make sure to go check out Prograd's website at Prograd.uk. Thanks for listening.