A really useful and fun website for children aged 4-7 that teaches about money and introduces the concept of saving, is funtosave.org.
Kids and teachers who've used it sing its praises. My 7 year old is a fan and has thankfully taken on board one of the messages - that when it's spent, it's gone, and it might have been better to save after all.
It's an unbranded, free resource for kids, teachers and parents- I work for one of the mutuals involved in its development.
I think it is vital to encourage children to save a small amount and not to get into debt - it is so easy these days with the banks giving out credit cards and ridiculous credit limits to those vulnerable in our society who have not been taught the basic principles of earning £1 and spending 90pence and saving 10 pence.
I also consider Credit Unions an excellent system of savings with smaller loans once proved that commitment to savings has been achieved. Some credit Unions do have savings schemes with schools and so children are taught the basic principles of saving from an early age.
I hope that I will be able to practice what I preach once I become a retired pensioner on a very small fixed income!
“Tracey 2412” has it spot on! The next stage is to educate kids about the Need – Want relationship. It all comes down to that simple phrase, “do you want it or do you need it?”
If you need it, save for it. If you want it, plan to save for it as the needs are higher priority. There’s too much choice now-a-days for children and too much advertising pressure. This leads to casualness and disregard for money. The banks then feed off that. They haven’t, don’t and won’t help in this arena as lending, as we’ve all seen, was all too readily available and too easy to obtain – hence the credit crunch.
We must start by ensuring our kids understand the Need – Want relationship as this may just start helping them to comprehend the best way to spend hard earned cash.
As an independent financial adviser, one of the most important aspects of my role is to educate clients during the advice process. Although, all aspects of the financial plan are provided in writing, it is naturally imperative to cover the salient points and verify understanding. The result is that anyone without prior knowledge should be fully informed before making a decision.
However, outside the 'adult' advisory process, children and students who do need to make decisions early on do not have the benefit of any 'basic financial planning'. It is exactly this area which should be addressed. This would also create an excellent platform of understanding for when financial products are required and when it is appropriate to seek advice.
Until now, the FSA's 'money made clear' guides have provided glimpses of what knowledge may be required in the future (albeit predominantly product based). However, most guides have a default of 'seek independent financial advice'. Martin, please do not allow the education system to leave this as a default as we both know this is unrealistic and will leave many young people disillusioned at the lack of 'free' advice.
I would like to see education of the following by the end of secondary education:
1. What money is and the value of exchange for goods
2. The basic framework of the UK tax system preparing people for work, or further education - just specific to the three elements - personal allowances, concept of different tax rates, and national insurance (guide figures only)
3. How to create a balance of account and instilling 'good practice' of regularly reviewing expenditure as well as income
4. How to get past bank jargon and understand what interest they will ACTUALLY receive on any balance (not 6% on first £xx then 0.1% thereafter, subject to £xx per month, applying to first year only)
5. What APR is and why is it important to savers and borrowers
6. A basic outline of inflation and risk to capital
7. A basic guide to shares and investment in general - not an encouragement, but a transparent 'this is how markets work'
Beyond this framework, we should rely on the governments initiatives to deliver certain information via employers and the regulatory requirements to explain more complex matters during engagement with an adviser.
Personally speaking, if I was approached by a local school during a Government initiative to educate young people my company would be happy to provide our support. I am certain that there is a wealth of knowledge that could be utilised from peers rather than place more burden on to what I understand are overstretched teaching staff.
I'm sure one of the problems is that loads of youngsters don't engage in "Maths".
I'm sure one of the reasons is because they don't see the value of much of the mathematics that is covered... Not withstanding the skills that are developed when learning mathematics, the fundementals that are of use from the subject, for the vast majority of folk, are all from the arithmetic branch.
Most folk don't have a real world use for most branches of mathematics that aren't arithmetic... but kids don't see the difference; it's all, "maths"
Teach arithmetic as a subject in it's own right, separate from algebra, calculus, statistics etc. Spend time getting them to master adding/dividing/percentages.
Have arithmetic as a separate qualification, and the "pride" that exists in not being good at maths, might change. I know adults that aren't good at maths, but are good at arithmetic... they just don't realise it.
Regards,
Simsybloke
Simsybloke, I'm not sure how much you know about the structure of maths teaching in schools today, but much of the focus now is on using and applying the calculation skills and methods taught. Gone are the days of pages of arithmetic exercises; it's all about real life problems and contextual questions now.
As for whether schools should be getting into the teaching of financial literacy - under the Every Child Matters agenda, all educational institutions have to help children acheive economic wellbeing. I personally feel that this is beyond the remit of primary schools, who should be focussing more on key academic skills and leave the teaching about finance and domestic violence, or whatever other social issues the Government idetifies next, to families and let teachers get on with doing what they trained to do!
I think we need to teach kids to save and pay for what they want with cash instead of cards, we live in a "want it now" society and credit cards have been part of the problem, you can have what you want now, but pay later, lets get back to basics, this recession has taught us we can't have it all, the oldies were right they never had credit cards and they never needed them - they did without.:T
One of the most important things to teach children is about budgetting. Why do mummies and daddies sometimes say "NO". And that money doesn't just appear from a hole in the wall upon request...
I manage a number of properties and am constantly surprised that young people we take as tennants have no clue how to run their finances for eg utilities, they seem to have no concept of taking correct meter readings for gas/electric/water and getting accurate bills. If they were taught this basic they could then be educated how to get better deals etc
My daughter was shocked when we told her that money was not limitless.
I think she thought grownups were just given it and we were being bossy not to let children choose what they want. She was only about 6 or 7 I think.
We told our kids about the limits of how much is earned and all the things it must be used for and I think they did get a better understanding of budgetting.
I think that children need to see that shopping is all about being canny.
A young man at work once pointed out that he never wore trainers with names on because he wasnt going to be a walking advert for free,I thought that was an excellent statement and one that would have been a useful comeback at school, to criticisms about not having certain brands.
Schools do jump on the bandwagon themselves though unfortunately by having their own Logo or badge on everything and then insisting that pupils should have the 'official' item which is usually hugely expensive.
I have 2 6yr olds and they get 50p pocket money each. Now they can add up I let them work out how many sweets they can get for their money. But the crucial thing I think in them learning is to let them make their own mistakes. If they want to buy the more costly sweet that cost 49p they now know (as I've taught them gradually) that that is the only sweet they'll get - ie I won't bow to 'child pressure' later on in the week when we're in the same shop, and that they're actually only getting a fairly small sweet for their money compared to buying say 50 1p sweets. The definitely get it and are learning to choose wisely. Occasionally they'll chose a 'toy' type sweet and they're great as they get to play with the 'toy' after they've eaten the sweets too, although they've equally learnt that the toy make break easily as it's made from cheap plastic. Applying that at this age and following the same principle throughout their lives is how I was taught to budget etc. So if you can't get to teach really young children this principle how about taking a teenager to a supermarket with an imaginary budget of money to buy a week's shopping with or similar? Or give them an imaginary week's money to work out how they'd dish out the money for rent, all the different types of bills we encounter as adults that teens may well be naive about?
Replies
Kids and teachers who've used it sing its praises. My 7 year old is a fan and has thankfully taken on board one of the messages - that when it's spent, it's gone, and it might have been better to save after all.
It's an unbranded, free resource for kids, teachers and parents- I work for one of the mutuals involved in its development.
I also consider Credit Unions an excellent system of savings with smaller loans once proved that commitment to savings has been achieved. Some credit Unions do have savings schemes with schools and so children are taught the basic principles of saving from an early age.
I hope that I will be able to practice what I preach once I become a retired pensioner on a very small fixed income!
If you need it, save for it. If you want it, plan to save for it as the needs are higher priority. There’s too much choice now-a-days for children and too much advertising pressure. This leads to casualness and disregard for money. The banks then feed off that. They haven’t, don’t and won’t help in this arena as lending, as we’ve all seen, was all too readily available and too easy to obtain – hence the credit crunch.
We must start by ensuring our kids understand the Need – Want relationship as this may just start helping them to comprehend the best way to spend hard earned cash.
However, outside the 'adult' advisory process, children and students who do need to make decisions early on do not have the benefit of any 'basic financial planning'. It is exactly this area which should be addressed. This would also create an excellent platform of understanding for when financial products are required and when it is appropriate to seek advice.
Until now, the FSA's 'money made clear' guides have provided glimpses of what knowledge may be required in the future (albeit predominantly product based). However, most guides have a default of 'seek independent financial advice'. Martin, please do not allow the education system to leave this as a default as we both know this is unrealistic and will leave many young people disillusioned at the lack of 'free' advice.
I would like to see education of the following by the end of secondary education:
1. What money is and the value of exchange for goods
2. The basic framework of the UK tax system preparing people for work, or further education - just specific to the three elements - personal allowances, concept of different tax rates, and national insurance (guide figures only)
3. How to create a balance of account and instilling 'good practice' of regularly reviewing expenditure as well as income
4. How to get past bank jargon and understand what interest they will ACTUALLY receive on any balance (not 6% on first £xx then 0.1% thereafter, subject to £xx per month, applying to first year only)
5. What APR is and why is it important to savers and borrowers
6. A basic outline of inflation and risk to capital
7. A basic guide to shares and investment in general - not an encouragement, but a transparent 'this is how markets work'
Beyond this framework, we should rely on the governments initiatives to deliver certain information via employers and the regulatory requirements to explain more complex matters during engagement with an adviser.
Personally speaking, if I was approached by a local school during a Government initiative to educate young people my company would be happy to provide our support. I am certain that there is a wealth of knowledge that could be utilised from peers rather than place more burden on to what I understand are overstretched teaching staff.
Simsybloke, I'm not sure how much you know about the structure of maths teaching in schools today, but much of the focus now is on using and applying the calculation skills and methods taught. Gone are the days of pages of arithmetic exercises; it's all about real life problems and contextual questions now.
As for whether schools should be getting into the teaching of financial literacy - under the Every Child Matters agenda, all educational institutions have to help children acheive economic wellbeing. I personally feel that this is beyond the remit of primary schools, who should be focussing more on key academic skills and leave the teaching about finance and domestic violence, or whatever other social issues the Government idetifies next, to families and let teachers get on with doing what they trained to do!
I think she thought grownups were just given it and we were being bossy not to let children choose what they want. She was only about 6 or 7 I think.
We told our kids about the limits of how much is earned and all the things it must be used for and I think they did get a better understanding of budgetting.
I think that children need to see that shopping is all about being canny.
A young man at work once pointed out that he never wore trainers with names on because he wasnt going to be a walking advert for free,I thought that was an excellent statement and one that would have been a useful comeback at school, to criticisms about not having certain brands.
Schools do jump on the bandwagon themselves though unfortunately by having their own Logo or badge on everything and then insisting that pupils should have the 'official' item which is usually hugely expensive.