Compulsory Consumer Finance Education Discussion

lilykim

I would just like to say, as a parent of a 26 & 22 year old, I do think matters like this should start in the home at a young age, i.e. pocket money for chores, pointing out that the "Postman Pat" spaghetti hoops are in fact just like the supermarket brand (!) and things like that. Todays economic climate is an ideal time to start teaching children of all ages about finances, debt, why people go bankrupt etc. That way if financial education is taught in schools children will hopefully already have an idea from what they have learnt at home. I understand it is time consuming for already busy parents, but I think it should be done.

slig

Budgeting - with older children, you could actually give them some made up SOAs to look at, and get them to decide what is essential spending and what are luxuries, work out how long it will take a family to save up for a new TV is they have £x spare each month, decide whether this family can afford to get Sky if it costs £40 per month, etc. I think that would actually be quite fun for year 10/11 pupils, and would get the point across about spending more than you earn = a problem.

Debt - what is good debt and what is bad debt. Eg why getting a student loan or mortgage is ok, but why getting a credit card or a car loan when you're 18 is not so good.

Basics about earning money for the first time - tax, bank accounts, savings accounts, pensions, bills.

I think as well as being covered in detail in citizenship or PSE lessons, it can also be worked into other areas, eg maths and history.

rosamundi2

4 things my teenagers (13 & 17) responded to when I told them:

1. when it's 50% off.... you're still spending 50% so concentrate on the spend, not the discount

2. Buy one get one free usually means you'll probably be throwing away the free one if it's perishable so think carefully

3. If you spend, say, 2 hours online researching a cheap deal and you save yourself, say, £200 by not going straight for an obvious choice... you've effectively paid yourself £100 an hour.

4. Automatically say no to sales people and don't let them start - they are trained to get your cash, whether or not that's in your best interests. If you want something, do comparison searches on the web.

Laughingbear

Isn't there a pretty basic/simple spreadsheet (that could be used and developed by them as their lives unfold) that could be set up on this site to help show kids income/expenditure ratios.

Surely someone (good with spreadsheets) on here could do that and post it for all to download.

4rossal

Dear Martin, I think teenagers should be taught, once they have a bank account, to keep their own record of income/expenditure and then balance it once a month with their bank statement. In this way, they can spot any discrepancies and, more importantly, they will feel in charge of their account. When I use my credit card I immediately deduct the sum from my balance (even though it isn't due for payment for weeks) so that I know exactly how much cash I have at my disposal.
Regards,
4rossal

astleyw

My mother taught me to 'look after the pennies and the pounds will look after themselves'. That was pretty much the sum total of financial education I got, but it was sound advice and I wish I had listened.

I am now knocking on 50's door and am a product of the 'consumer generation'. I have been seduced by the dot.com boom, the housing market, the credit boom and the exploding stock market and, along with most of my generation, have had my fingers burned every time because we didn't understand the basic economics behind the warning signs, and thought the gravy train would never stop.

I have read a lot of comments on how 'education begins at home' and as I grow older and (painfully) wiser, I pass on the lessons learned to my kids. However, I, along with many, am not a good role model.

If there is anything I have learned, if too late, it is the miracle of compound interest. Put a little aside from as early as possible and let it grow - even at low interest rates, the compounding is hugely beneficial over many years. Just watch out for the bank closures!!

The ME generation, whose motto is 'I want it all, and I want it now', has GOT to change their ideas to avoid all the pitfalls that my generation fell into. As I said, I am not a good role model, and not proud of that either. One thing is clear, educating the next generation on basic economics and sensible financial self-governance has got to start happening ASAP.

And Dots_Thots - if you understand all that you have proposed should be taught to our kids, then you are probably the only person in the country qualified to teach it. Even the government doesn't understand it.... ergo the current economic mess!

Weary Investor!

cabbage

Hi

It would be a good lesson to save that for every pound you spend you should save a pound.

I would also like to see people actually saving up to buy things rather than borrow to get them. Its a great feeling saving and then buying that treasured item.

laurarobjo

I had my children open current accounts when they were 11 years old - this gave them a 'hole in the wall card' - any money they earned for chores or birthday/christmas money went into their bank accounts - they kept track of this money because they could not see it and used the hole in the wall card wisely - now they are a little older they have had their cards activated for use in shops and use on-line banking - my children closely monitor their on-line accounts and know exactly how much money they have. My daughter has a part time job and has started university - she pays me board which she transfers from her bank to mine at the start of the month and knows how much she can spend each week - I can honestly say that she struggled at first, knowing she had money coming in from work and for the first couple of months spent it in a breath but this month she has money left and gets paid in a couple of days - she is really proud of herself. My step daughter (12) saves all her pennies and seems to gather loose change like a vaccum cleaner, she takes this to one of those changing machines and deposits the notes into her bank - although she cannot access on-line banking at the moment she scrutinises her bank statement and can use her card in shops, under my close supervision, of course - all my kids seem pretty good with money, although as they get older they could get their hands on credit cards - I have printed off Martins Teen Cash guide and given it to my eldest daughter today - she is fascinated. All my kids have savings accounts as well, although I haven't managed to get them to transfer some of their money to their savings accounts yet - there's time yet. Thanks to Martin for the Teen Cash Guide - I found it really useful as well.

insleyclan

This is fantastic news! As a development Manager for a Citizens Advice Bureau I fully support this move. We deliver financial capability training to groups and would welcome the opportunity to go into schools to deliver training to students of all ages. I feel that due to a variety of reasons parents are not teaching their children basic money skills at home, so in school training is the way forward. Also I think parents should not give into marketing pressure and try saying no to their children more often!! They will thank you when they are older!

p_suntharamoorthy

I was very glad to learn of this particular program as it does not only address the main concern facing the majority of economies around the world, but tackles the issue at grass roots level. However, I am disappointed to learn that it will only come into place in 2011?!? WHY?:mad: Following an election and possibly when the economy has recovered considerably more than its current state – when ministers and MPs conduct their necessary feasibility tests – would the program withstand the test of time?

The organisation I work for, Invicta Education, has been providing Money and Finance Kits to schools for over 2 years, which, without any bias is probably one of the best educational aids for schools which teaches children everything from Savings, Borrowing, Monies values and how it has developed over time to simple mathematics of budgeting, credit card minimum payments, etc. Honestly, when I read the teachers guide attached with the product – even I didn’t know many of the info included within the document!! Check it out for yourself; Just Google - Invicta Education!:j

The point is very simple – there are many current products on the market which address the issue of Managing Finance from a very young age – so lets make them available to children now rather than later – Recessions should not be a periodical occurrence with the right education and policies in place – PFEG have been working at this for a while now – Why should the government only do something about this in 2011??

[EMAIL="p_suntharamoorthy@invictagroup.co.uk"]p_suntharamoorthy@invictagroup.co.uk[/EMAIL]