Research carried out by the Personal Finance Education Group (PFEG) shows that 64% of children get their first building society or bank account before they start secondary school and almost 75% of 15-year-olds have a bank account with a debit card.
If we are to help future generations manage their finances properly, the question is; do we need to teach about more serious money matters in our schools? In today’s challenging world it is becoming increasingly important for young adults to understand financial matters and manage their funds more effectively than ever before.
Support for financial education in school is overwhelming, PFEG’s research found that a huge 94% of teachers, 90% of youngsters and 79% of parents agree that financial education should be taught in schools; but less than 33% of primary schools actually offer it as part of the curriculum.
The importance of money management was recognised in the new Secondary National Curriculum for England this September, providing more opportunities than ever for well-balanced and well-rounded financial education. This landmark achievement was the result of years of campaigning by PFEG, the All Party Parliamentary Group on Financial Education for Young People and MoneySavingExpert.com’s Martin Lewis.
Delivering core curriculum areas and lack of knowledge on how to put together a programme are just a couple of the issues facing primary schools. Ultimately, children aren’t judged on their knowledge of personal finances. Chances are schools are unable to find gaps in the schedule for something that they aren’t judged on.
Still, parents and children agree it’s important and there are many advantages to it’s teaching – some of which of which we will explore here.
Benefits of financial education in schools
Adapting to changes in society
The societal landscape is changing, and it’s important to equip children with the knowledge to make sound financial decisions.
Children from this current generation will see issues arise from decrease in welfare benefits, increased life expectancy and uncertain economic and job prospects. Until the age of 11, family tends to be the strongest influence on how the children see money issues, but discussing positive financial actions at school can only help to consolidate positive attitudes.
Boost job prospects
Financial education within the school curriculum is recognised as one of the fairest and most efficient ways to reach young people on a wide scale and schools must play their part. Studies suggest that almost 75% of UK employers say it is difficult to find good-quality applicants for entry-level jobs. We must help to equip children with the right mind set to support their future financial needs, and instilling a strong work ethic can be a great start in doing that.
Money impacts our lives at all levels
Making decisions about money is a huge part of adult life. From buying a house and having children to simple day-to-day budgeting, it’s important to recognise how important money is to adult life (even if we consider it a little unsavoury).
Junior savings clubs can supplement curricular financial education, particularly for primary school children. Giving the children roles of bank manager or cashier can reinforce learning the importance of money and being savvy, it can also encourage work ethic, trust and honesty. Dedicated accounts with the parent’s involvement can help children to save for school trips or uniform.
Teach other valuable life skills
Real-life scenarios can be an effective way for children to understand the risks associated with irrational behaviour when it comes to money matters. Skills such as communication, teamwork, problem solving, creativity and resilience are learnt during discussions about serious financial issues, skills like these are obviously key to adult life and work.
Responsibility and awareness are heightened in children who have some knowledge of the financial implications their decisions make. Imagine if we had all known what we know now at 18. Think how differently you’d have distributed your finances – would you have saved immediately, or cut back on elaborate purchases you now don’t think to touch? When you consider that as many as one in three Brits don’t know how much pension to save for retirement, and one in five don’t even know how much they have, you begin to see the size of the issue.
If you can impart this knowledge on your class, they might learn valuables lessons and not make the same mistakes as you.
It leads to a healthier life
Again, sometimes these facts might be something we’d rather ignore, but there is no getting away from it. In general, being sensible with money can lead to all sorts of positives in later life.
Good financial decisions leads to a better credit score, which in turn may help them gain capital to start a business or purchase their first house. Less debt leads to a diminished financial burden, leaving them with more money to enjoy their lives. Plus, all the above ensures they are positively contributing to a healthy economy.
It’s incredibly important to stress this, and to constantly repeat it to your class within the context of financial education. Money isn’t everything, and it certainly brings no guarantees of happiness in adulthood. But given poor personal finances can be a huge weight around our necks, offering some advice at primary school level could make a big impact down the line.
It leads to a healthier life
A 2019 study from Credit Karma found that just 12% of Americans learn about personal finances from teachers – yet 63% think they should learn it at school. This may be from across the pond, but we can make the implication that the UK is along similar lines.
The questions is – if children don’t learn personal finances from school, where else will it come from? Many will turn to their parents, who can offer advice and learning from their own experiences. But many may not have that option. Without schools to turn to, we shut off one potential avenue of knowledge on a subject that is a far from clear cut.