Young people better prepared for the future

treliac

Does the panel think this plan is likely to help future generations of consumers avoid the financial profligacy that has led to our current house buying crisis?

PasturesNew

Eh? What plan?

Update: Oh, there was a link in that.

avinabacca

No idea - there's no discussion of the course's content in that news story, nor is there any idea as to how seriously it will be taken as a taught module/subject in the classroom.

Ed Balls' comment that "financial capability education has always been high on the government's agenda " really counts for nothing here - the success or failure of this initiative will rest largely on the content and approach used.

Personally, I doubt that this will have any more than a minor effect. £11.5m spread across all the primary and secondary schools (c.18000 primary, c.3400 secondary) in England?

Averages out to c.£540 per school. :sad:

IT_nerd

If you ask me the general rule is this:
People spend a lot on credit in their younger years. Rack up huge debts.
People realize this and try to wipe off the debt.
People are now more money minded.

People that are bad with money have to go through this proccess. It's learning the hard way and it may be the only way they'll learn.
I'm sure many people on the debt free board have followed that forumla. Even I have to an extent. But I only had to watch others around me mess up.

So you can try and teach that, but I don't know if it would work.

Max_Headroom_3

Indeed, we've all had the "free money" credit card, closely followed by "oh s**t, how am I going to pay this back and how long will it take?"

The difference is, when it happened to me my credit card (at the age of 19) was maxed at £200, overdraft maxed at about the same.

These days our generous banks will happily lend young people thousands of pounds.

That's really what needs to change, there needs to be more sensible limits. Who knows, maybe one good thing that will come out of this mess is more careful lending. But I wouldn't bet on it lasting even if it does.

sjaypink

no, not really, although i guess its a good idea to at least try.....

problem is everyone is so obsessed with material goods, and credit companies are (were?) sending out credit card invitations within days of 18th birthdays! by the time i was 19 i had 4 credit cards, all obtained through returning those postal 'invitations', maxed them out on cr*p, 1year- 3k in debt and nothing to show for it. thankfully i've learnt my lesson, but it could have spiralled into a life time of serious debt.

i think its the parents job to teach kids about finances- and the UNimportance of disposible material items, we must reinforce that to our kids because it seems everything else (advertising, peers, tv shows, music) is brainwashing them otherwise!

*omg! i sound REALLY old

PasturesNew

Maybe the Wilsons (BTL LLs, both ex maths teachers) can write the course materials....

Maybe they are an example of how being taught at school might prepare people for the financial real world.

IT_nerd

Max_Headroom wrote: »

Indeed, we've all had the "free money" credit card, closely followed by "oh s**t, how am I going to pay this back and how long will it take?"

The difference is, when it happened to me my credit card (at the age of 19) was maxed at £200, overdraft maxed at about the same.

These days our generous banks will happily lend young people thousands of pounds.

Earlier this year I was 19 and had a job that paid me £240 per month (Waiting for proper job to kick in) and I went to my bank to discuss my options with my savings. They offered me a card with a £2500 credit limit. I told them where to stick that..
The other day I wanted a credit card just so I can try and boost my credit rating a bit, and the limit was set at £500 xD
Silly bankers.

Guy_Montag

As long as it is deemed trendy by journos, commentators & other public-opinion formers to be functionally innumerate, it's just !!!!ing in the wind.

I learnt about about money during maths class - at least the basics: APR, compound interest etc. I didn't need to be taught that my outgoings should not exceed my income - you can't teach some people common sense:

In 2005 I was living with my mother in Hendon, London, and was working as an accountant. I was earning £20,000 a year, as well as receiving income from two buy-to-let London properties.
I spotted a deal in a property magazine, for five flats in Birmingham's canal area, effectively for the price of just four.
It was irresistible so I bought the flats in December with a 90% mortgage.
Each property was £145,000 but cost me 20% less with the discount, so I could pay my mortgage deposit with the money I had effectively saved - with money left over.
I then had to pay £500 a month for the interest on each property's mortgage, but that should have been fine as they said I could get a rent of £750 a month.
That turned out to be rubbish. The maximum rent I could get was £600-650 and some of that went to the estate agent.

neverdespairgirl

When I was at school, we had general studies lessons on compound interest, pensions, credit cards, mortgages, etc. I'm surprised this isn't standard anyway.

Guy_Montag

In 2000 I was looking for a bigger house for my wife and two daughters and we found a three-bedroom council house in Lewisham. Four years later, we bought the house through the government's right-to-buy scheme.

The government discount was very attractive. We paid £15,000 and the government put in £16,000. That left us with a mortgage of about £167,000.

We had to pay interest at 9.8%, which I was advised was the best I could get at the time because of credit problems, as neither my wife nor I were working.

"Bought" a house with bad credit, no jobs & subsidised by HM Govt. FFFFFS!!

From the same source of the above BBC News