I've started to take my 9 year old daughter food shopping & explaining why some offers are good & some are not so good. We take a pencil & paper and work out the price per g or kg etc. and then decide which item to buy. We also discuss quality differences but not to any great length at the moment.
My daughter likes to make chocolate crispy cakes & I help her to work out how much each one costs to make. We do this by comparing using the Branded products to the non-branded products. She is amazed by the difference.
I plan on developing these skills shortly into whole meals & eventually the weekly food budget. My plan is to ensure that my daughter (and later my son) understand the cost of living before we even get on to the subject of debt. I'm still trying to educate my partner on that one!!!
I love this. I think we spend far too much time blaming teachers instead of offering our experience, help & advise of living & working in the commercial world.
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.
This is such a great idea and it's about time the government takes this initiative. We are all so ignorant about finances and the society keeps on producing a mass of ignorant people, who cannot take informed decisions about what will be one of the most important thing in their life. Young people should be taught how to manage their own finances, they should understand the mechanism of economy, how they can increase their revenue by investing wisely and how being in charge of their finances is vital if they want to be in charge of their own life. It is sad to say but without money you cannot achieve much and learning how to manage the little you have is vital. Learning how to become financially free should be taught in this new education programme, only a very small portion of the population are fortunate enough to have learned the tools and the ways to be financially free and this knowledge should be shared and spread so that we can live in a fairer, healthier society and not in a society where the knowledgable takes advantage of the ignorant.
Apart from the basics on bank accounts, tax, national insurance etc, it seems to me that one important element would be to educate about the dangers of gambling and betting. This can begin as a simple purchase of a lottery ticket for those over 16 but can easily and quickly develop and become an obsession. There are numerous bingo, poker, and betting sites available on the internet or even on television, and for the unaware or naive they imply success and a 'desired' way of life.
In my opinion pupils and students need education about the dangers of these elements. I would like to see these included in a compulsory curriculum for finance education
I went to High School in Australia and was lucky enough to be benefit from the school banking scheme. Our High School operated a savings scheme for the students. We had a passbook and were able to deposit and save money. I believe our schools should run a banking scheme for the pupils. Children need to learn the virtues of saving money but unfortunately many don't have accounts and don't save.
I took my son to Tesco and was supprised to find he was unsure about value to volume ratio`s for example he bought a bottle of water for £0.99 when he could have had 6 for £2. It just did not register that he had to read and digest the information on the shelf edge labels but to be honest they are difficult to read sometimes.
Very young children need to be taught that the purpose of many adverts is to make the toys/food look good so that they will buy them. Although I do think that this needs to be taught at home as preschool children are rountinely exposed to TV ads.
Older children (maybe KS1 or 2) could be taught simple tools for managing a budget and saving for what they want to buy.
I think it would be wise to teach them that rather than trying to afford to buy a car and keep it on the road, they'd be better off (in many cases) using public transport and/or taxis.
With insurance for kids costing £2.5k+, there's a lot of bus/train/taxi fares in there (£6.85/day) and that's without actually paying for their current car/maintenance/fuel or even begining to save for their next car.
With low earnings in their first few years at work, kids are working 2-3 days a week just to keep a car on the road.
What's wrong with getting a pushbike - keep sound fiscal sense because it doesn't depreciate the same way a car does, costs a sight less to fix, most of it you can even do yourself, hey and you get to keep fit too. Not only that, your travel costs don't hike up every time the privatised companies want to increase their profit margins, or the government slaps extra taxes on fuel.
Awesome common sense... and for those who are scared of the weather, my brother cycles 15 miles a day, after taking his motorbike off the road because it was costing him too much to run, and he was sensible enough to figure his mortgage came first.
CAB started to do courses in secondary school, about leaving home and the finances involved when you apply for council accomodation. many pupils were shocked they had to pay for water, also some thought electricity was free and paid for by the council. I think basic income and expense budget sheets should be included, debt management.What I would really like to see is AAT taught at secondary schools, how to make money on shares, how to read the financial times from an early age. how to read a companys balance sheet.aah well.
Kids should learn about how supermarkets put price tags in such a way to make you buy a particular brand, a supermarket beginning with T is particularly handy at pricing some products, price per kg and some price per 100g, kids should understand how to work it out so that they can evaluate like for like. Also that the most expensive is not always the best but that the cheapest is often the worst. That a certain supermarket often starts to stock a particular product cheaper than a local shop (perhaps a health food shop) until the small shop goes out of business, then they withdraw the product on account of it not being a top seller.
Replies
My daughter likes to make chocolate crispy cakes & I help her to work out how much each one costs to make. We do this by comparing using the Branded products to the non-branded products. She is amazed by the difference.
I plan on developing these skills shortly into whole meals & eventually the weekly food budget. My plan is to ensure that my daughter (and later my son) understand the cost of living before we even get on to the subject of debt. I'm still trying to educate my partner on that one!!!
In my opinion pupils and students need education about the dangers of these elements. I would like to see these included in a compulsory curriculum for finance education
Older children (maybe KS1 or 2) could be taught simple tools for managing a budget and saving for what they want to buy.
What's wrong with getting a pushbike - keep sound fiscal sense because it doesn't depreciate the same way a car does, costs a sight less to fix, most of it you can even do yourself, hey and you get to keep fit too. Not only that, your travel costs don't hike up every time the privatised companies want to increase their profit margins, or the government slaps extra taxes on fuel.
Awesome common sense... and for those who are scared of the weather, my brother cycles 15 miles a day, after taking his motorbike off the road because it was costing him too much to run, and he was sensible enough to figure his mortgage came first.