MSE News: Personal finance education to be made compulsory

FatratUK

This is a good idea.

I myself made a lot of mistakes once i was out of high school. I don't think it's anything to do with age or ''being a student'', more to do with it being easy to get credit back then and lack of foresight or experience. I see people 10 years older than me (i'm 25) making the same mistakes, even looking around these forums i see people with 40k credit card debts and no mortgage mentioned. If you're desperate or lured it, it can or will happen.

That said, i really wish this had been taught at school 10 years ago just before i finished. Once i was unleashed to the 'real world', i became quite a few thousand in debt just from buying a PC, motorcycle and getting a mobile phone on contract. I was only 17/18 at the time of all that but it was so easy to do, even though at the time i was in and out of temporary agency work! This quickly spiralled into 3-4 credit cards when i had some problems with unemployment and illness.

It was something i HAD to learn in life eventually, i just wish it had been a lesson i learnt in school, and not something that would take around 5 years of my life to pay back.

Hope it gets added soon. :T

Edit - Also the person who mentioned that ''parents'' should be teaching these skills to their children. My mum spent most of my childhood struggling to keep a roof over my head after she divorced my dad when i was 7 years old. Some of us don't have the luck to have both parents there to guide us through life and only witness their struggles with money and come to think that it's normal. My mum pretty much took it month by month for the most part, which might explain why my brain didn't develop the skill to think ''what happens to this loan if i lose my job'', dur, i know. But just saying, be thankful if you 'learnt' these skills from a pair of parents that were there for you.

Oldernotwiser

FatratUK wrote: »

Edit - Also the person who mentioned that ''parents'' should be teaching these skills to their children. My mum spent most of my childhood struggling to keep a roof over my head after she divorced my dad when i was 7 years old. Some of us don't have the luck to have both parents there to guide us through life and only witness their struggles with money and come to think that it's normal. My mum pretty much took it month by month for the most part, which might explain why my brain didn't develop the skill to think ''what happens to this loan if i lose my job'', dur, i know. But just saying, be thankful if you 'learnt' these skills from a pair of parents that were there for you.

I'd be a little careful about saying this as it implies that lone parents can't provide social education just as well as two parents can . It might also be expected that someone growing up in a household where money was tight would have more insight into financial problems than someone from a family with few money worries.

Personally, seeing how poor the results are from sex education in schools, I can't see why financial education would provide any better results. There are certain groups of people that think that everything taught in schools is a load of rubbish and these are the people who would need this sort of help most.

Fire_Fox

Anyone who wants to know how the average student really accrues their massive debt should read the 'Student Income and Expenditure Survey', especially the section imaginatively entitled living costs. Note that almost everything in this category is optional - no accommodation, no utilities, no travel for course. Taken alongside the average graduate debt, the survey illustrates perfectly what happens if you don't live within your means and how little intelligent eighteen year olds know about budgeting.

bylromarha

FatratUK wrote: »

Edit - Also the person who mentioned that ''parents'' should be teaching these skills to their children. My mum spent most of my childhood struggling to keep a roof over my head after she divorced my dad when i was 7 years old. Some of us don't have the luck to have both parents there to guide us through life and only witness their struggles with money and come to think that it's normal. My mum pretty much took it month by month for the most part, which might explain why my brain didn't develop the skill to think ''what happens to this loan if i lose my job'', dur, i know. But just saying, be thankful if you 'learnt' these skills from a pair of parents that were there for you.

I didn't learn from a pair of parents. My dad died when I was 3 years old, in 1980. "Didn't believe" in life insurance either, so nothing at all in the pot when he died, nor maintenance payments or extra treats from an absent dad (whose job it also is to teach these things BTW).

Single parent household with 2 kids in 1980s-benefits sytem far far less generous than today. Watched mum bring us up hand to mouth, comparing prices, living off HP purchases for big items and managing it all in her meagre budget.

I learnt finance the hard way, not by mum sitting me down with a budget, but by growing up in a tiny budget. Living hand to mouth makes you very conscience of the cost of every small thing.

Wouldn't have even qualified for a loan at age 17 and if I had, mum would have made it very clear it was my job to pay it back if things went wrong, not hers, as she had no spare cash to give.

It's a parents job to teach these things-and your job to listen and learn;)

FatratUK

Oldernotwiser wrote: »

I'd be a little careful about saying this as it implies that lone parents can't provide social education just as well as two parents can . It might also be expected that someone growing up in a household where money was tight would have more insight into financial problems than someone from a family with few money worries.

I wasn't really trying to imply anything, just giving input from my own experiences. Pointing out that some people often say ''i blame the parents'' when in my case it was partly due to my own ignorance of thinking taking out credit was normal when you wanted to buy something. It may have also been partly down to the fact i lived away from home right after high school so didn't really have any guidance during those credit spending years, at all. So yeah, i can't really blame my parents at all.

I still think this would be a good addition to schools, as it seems people of all ages and backgrounds often lack any money management skills. I can't speak for others, but it took me at least 5 years of being in the real world to realise what a dolt i was being with my money.

I still have about 18-20 month until i expect to be free of personal debt, but that's a far cry from the worries i was having only a matter of 2-3 years ago over the situation. It's not something i'd wish on anybody and i think ideas like teaching these skills are at least a step in the right direction.

bylromarha

FatratUK wrote: »

Pointing out that some people often say ''i blame the parents'' when in my case it was partly due to my own ignorance of thinking taking out credit was normal when you wanted to buy something. It may have also been partly down to the fact i lived away from home right after high school so didn't really have any guidance during those credit spending years, at all. So yeah, i can't really blame my parents at all.

I still think this would be a good addition to schools, as it seems people of all ages and backgrounds often lack any money management skills. I can't speak for others, but it took me at least 5 years of being in the real world to realise what a dolt i was being with my money.

I still have about 18-20 month until i expect to be free of personal debt, but that's a far cry from the worries i was having only a matter of 2-3 years ago over the situation. It's not something i'd wish on anybody and i think ideas like teaching these skills are at least a step in the right direction.

No one is blaming the parents-my annoyance is that this role is a parental role, not a governmental one.

Are you genuinely telling me you believe you would have listened if this was taught in school, and you'd remember it to the extent it would have stopped you taking out a loan to get all those toys you had to have at age 17?

If it took you 5 actual years of being in the real world to come to the realisation you weren't managing your money well, why do you think an hour a fortnight in school of theories and examples (aka real life maths) would make much of a difference?

rowena_stone

Credit which is the cause of our indebtednes is about being a credible human being and this links to money but money is not the whole story. Its about fundamental human values in the first place. Value creation. We have to be very wary that the monster is not going to nibble its tails and end up consuming itself.

jaype

This is quite timely because I had a conversation with the 5 year old last night about how shops want your money - he asked why a slogan said what it did so I told him it was something the shop had invented to make you think you might like to buy more things (making a house a home, I think it was). I agree that parent should be teaching this to children not just schools, but a lot of parents have lost the ability to do this because the knowledge hasn't been passed through generations recently so I suppose schools have to step in. After all, they teach about media messages in media studies classes so why not about marketing and advertising and persuasion in the money section?

As for students - it is harder for the current generation as the idea of fees and no real grant is quite new. I have had since birth to save for my kids' education but family members who are 15 years older than me and have children just starting at university now had the whole thing landed on them when their children were about 8 or 9. They didn't get that many years to save so their children don't have much of a CTF pot or anything. Hence all the debt.

JBrim

Why not take a 7 year old to a supermarket, and ask "do you know why they put sweeties by the till?" Then explain "it's because a supermarket’s job is to make money, so it's trying to remind you to ask Mummy or Daddy to buy sweets so it can make more."

and my 7 year-old wouldn't have it any other way - he's with the shop owner on this one....

supplyteacher

This is another 'soundbite' from the Govt! I had the experience of teaching personal finance to a class of year 8s about two years ago. Had to explain what different accounts were for savings, current etc granted more info could be given and it needs to be repeated at regular and frequent intervals but please don't think we teachers aren't doing anything! it is already included in PHSE or citizenship or whatever it is called - and each school uses different initials.