Compulsory Consumer Finance Education Discussion
edited 25 November 2009 at 12:14AM in Student MoneySaving
193 replies 14K views
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We have time to work out exactly how it will work as ours is just 10 months old, but we are planning to work up to our son getting the basics (smart clothes, school uniform etc) from us and paying for everything else from pocket money.
I didn't really get pocket money, but i did have a bank account since before I remember, and was taken to the bank to put money in it.
Also my mum took us to the bank when she paid the bills. I think this may have been hidden from children in an age of direct debit and internet banking. Perhaps I will sit him on my knee one day while I check the banking.
They visibly checked through their bank statements while we were around, asked me to crawl under the stairs to check the meters when there was an estimated bill. The latter is surely a good reason not to ignore estimated bills as setting them right can be a good lesson for kids!
I think it's brilliant that someone, at last, has thought of hitting the schools with something to save the future generations and managing money. If the same thing had been done 20 years ago - maybe we would not have had so many reposessions and people driven mad with money worries.
I have read your weekly email from header to footer and looked forward to Wednesdays for ages and thank you - you saved me a small fortune.
For todays kids, I know it will be wise to impart that if you can't afford it then W A I T and consider doing extra jobs to gain the extra money to buy it. It also needs to be sorted out, what's a WANT and what's a NEED. Prioritise. Credit is brilliant if you can afford the repayments AND DONT FORGET YOUVE GOT IT only to take some other commitment on. YOU CANT SPEND THE SAME MONEY TWICE
If you can't afford the repayments then it's the worst kind of misery.
Money worries are terrible. There is enough stress around in normal day to day living, without having to worry about money - or rather the lack of it. Back in the 70's I studied O level economics and I can honestly say that personal finances didn't really come into it. It was boring.
All kids get pocket money either earnt or given. All the basic rules can be applied to saving a proportionate amount. Some to spend and some to save
My own Grandson (13) and I found a game website called molehillempire. It's free to join but is tremendously helpful in teaching the young (old uns too) about profit and loss, buying and selling, growing stuff and how long it takes before you can get your money. It's running a market garden really.
That's about all for now and all the best
Could we please start with the basics - for primary school age, learn to add things up as they go round a supermarket (or at least estimate/round up or down). I am a teaching assistant in a secondary school and it's frightening how many 13/14 year olds haven't got a clue re mental maths! By the time they reach Years 10 and 11 they really should be familiar with basic accounting skills, i.e. know how much you have coming in and what your outgoings are and budget accordingly. They must know all about the importance of paying bills, and the fact that debts won't magically disappear if you ignore them! They have to understand how essential it is to prioritise how you spend your money - bills come BEFORE going to the pub/cinema/clubbing or you end up in trouble! Also, mum and dad may not always be there to bail them out....in short, they need to learn how to stand on their own two feet in the big, bad real world!
Saving up for something that you really want teaches children to appreciate it more but you have to make them work it out. I agree with the lady who had her son work out the hours worked for the trainers, this would also apply when children earn their pocket money/ students have jobs. If they have to work heard to earn it then they may appreciate it more. I still think that credit cards and store cards are too easy to get, look where 100% mortgages got us!
How to benchmark finance rates.
How car finance works.
What is a credit rating.
Why are credit cards so expennsive.
However I am forever coming across people who have bad credit scores but haven't got the faintest idea how to improve their score and how long it will take.
What people tend not to understand is how easy it is to create a bad credit score, ie. late payments, missed payments etc. & also how difficult it is to correct your score and what effect having a poor score will have on your life & finances for a long long time.
For 20 years I worked in retail & yes we promoted store cards with a 10% discount. Although store cards get bad press, if people understood how to use these correctly and to their advantage they can help build up a good credit rating. You only get into bad debt & pay the ridiculous amounts of interest if you let things get out of hand & let them put your credit limit up, keep the limit low, pay it off every month & this will help your credit score.
I now sell cars for a living and the amount of people who cannot get credit or who are paying high interest rates because they have poor credit scores in far too high. A big percentage of these believe it will only take 6 months of regular payments to sort their credit score out.
Bad credit scores have such an big effect on what you pay in interest on every thing from credit cards to car loans to mortgages, people need educating on how easily this can be avoided and what to do if it becomes a problem.
In line with income tax and NI education
EVERYONE (INCLUDING ADULTS) NEED TO BE AWARE THAT SPENDING IN ONE AREA OF THE PUBLIC SECTOR LIMITS THE TOTAL AMOUNT AVAILABLE FOR OTHER PUBLIC SECTORS.
Public sector money comes from our pockets.
People should be as careful with public sector money as they would (or should) of their own.
As this may be too ethereal for kids then practical examples would help. And as I work in the NHS I can give you some examples from there:
1. Millions of pounds of public money are thrown away every year in WASTE MEDICINES. I have been into patients houses where they have out of date medicine stacked in a cupboard which have to be thrown away because they order them "just in case".
2. You may think your prescription is "free" but it's actually money from your NI tax -which could go to help hospitals employ more staff or carry out more operations. SO consider whether you can afford to purchase 16p for 16 paracetamol when you have a headache rather than £1.17 on a prescription (17p for drugs, approx £1 dispensing fee) plus a GP appointment which could be used to see patients with long term conditions.
3. Long term conditions can be managed well with drug treatments but if you take them incorrectly and you don't tell your GP he may try more expensive meds or costly surgical interventions. example- Statins to reduce cholesterol- studies show that up to 50% of patients do not take them as prescribed this could result in your cholesterol not going down so your GP tries a more costly alternative or wosre case you have a heart attack!
4. You may think you are getting a free prescription or at most £7.20 per item, but some meds actually cost a lot more e.g. some asthma inhalers cost the NHS £30 each. I have heard stories of them being left on a bus or at the bottom of a bag to go out of date. Would you spend £30 on food and leave it all to rot in the cupboard?
5. If you attend A&E it costs your local NHS trust a minimum of £55 per visit, even if you don't wait long enough to be seen. If it's necessary then that's a great use of resources but could you use walk-in -centre, advice from NHS direct, your GP if in hours, the local on call service out of hours or a local pharmacy for advice or treatment first?
I'm sure there are similar stories from local council staff e.g removal of grafitti which is using up resources which could be better used elsewhere.