Compulsory Consumer Finance Education Discussion

edited 24 November 2009 at 11:14PM in Student Money Saving
193 replies 13.9K views
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  • ben80 wrote: »
    In principle it's a great idea as I had no 'financial education' (left Secondary in '97).

    Cue the moaning teacher...

    I'm a Primary School teacher and we can barely get anything done as it is - more and more is being packed in and nothing is being taken out, e.g. this year it was Modern Foreign Languages.

    Could Martin possibly remind Mr Balls (how unfortunate) that there isn't limitless time in a Primary classroom an that eventually something will have to give!

    Maybe this is something that parents should take on. After all, we're all concerned to make sure our children make their way in the world successfully. If parents could continue to be educated simply by means of the tv, which most of us watch, then we could pass the info on to our children. Maybe Martin could devise something for the tots on the lines of the Mr Men perhaps. Or an educational computer game.
  • I know what tripped up one lad I know when he first started living on his own - budget planning. He underestimated the costs of running a household and left no contingency for emergencies. It was unexpected vet bills that tipped him into debt, and that then triggered a downward spiral.

    So, having a margin for the unexpected (or choosing to insure against the things you can hopefully predict) is very important.
  • Isn't it the house price bubbles, both sides of the Atlantic, that got us into this mess? I should like to teach kids how it was in the short term interests of banks to artificially inflate prices by pumping money into the system with their "instant negative equity" 125% morgages, aided and abetted by the estate agents, gleefully trousering their ever fatter percentages. And now we seem to be at it again - watch out for the double dip. Any taxpayers' money left for bailing out the bankers again?

    I'd be obliged if anyone can answer this question: why are house prices excluded from inflation calculations? And if they had been included, would not the Monetary Policy Committee have controlled the bubble?

    It's not just the kids that need educating.
  • bargainbettybargainbetty Forumite
    3.3K Posts
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    ✭✭✭✭
    Lessons worth teaching:

    1. If you don't have it, don't spend it.
    2. Don't assume being offered credit is good.
    3. Lots of people fall into the trap of 'my mates have it, therefore I need to have it'. Work out if your mates can afford it, or if they have gone into debt. If they have, more fool them.
    4. If you do get stuck, come here for help.
    5. Look at what you spend, reduce waste and spend wisely.

    Work hard for what you want - you'll appreciate it more.
    Some days, it's just not worth chewing through the leather straps....
    LB moment - March 2006. DFD - 1 June 2012!!! DEBT FREE!

  • DaftMuleDaftMule Forumite
    84 Posts
    Part of the Furniture Combo Breaker
    Whenever I hear talk of this sort of government education strategy, I have to say it makes me feel a little sad...sad for two reasons.

    1) Kids as young as 5 shouldn't have to be bashed over the head about money. They have decades of financial stress ahead of them when they are adults. They should be getting on their parent's nerves, climbing trees, running around chasing the pet dog in the garden, lying on their backs looking up at the shapes the clouds make etc, etc.

    2) Education starts at home...in fact, I go so far as to say that THE most important education should be happening at home. There is a very real danger here of instilling a mentality in generations of future parents that they don't really have to bother teaching their kids social responsibility. Wrong, wrong, wrong wrong! I know this particular thread is about money but the other aspect of this government education initiative is to teach kids that domestic violence and beating up women is not acceptable. Are we really saying this is something kids should be learning for the first time in school!!

    Anyway, getting back on topic a little more...if this is coming in and we need to teach kids about finance in school then we should teach them that:

    1) Money does not magically appear in your pocket. It takes hard work and time to accumulate. The best way of teaching kids this fact is to actually take them through the process.

    For example, I was lucky enough to grow up on a farm. To make "pocket money", I was given some animals to look after. My parents bought them, but it was up to me to feed them morning and evening, keeping records of what feeds etc I used as the weeks went by. Then, when the animals went to market, I had to work out the profit made on them based on my costs of production and the sale price....simple accounting. I was allowed to keep the profit. In this way, if I wanted something in particular, my parents gave me the opportunity to make the money to buy it rather than just handing me some cash.

    This didn't happen when I was 5 but it certainly happened in my very early teens.

    2) You NEVER get something for nothing. There will ALWAYS be a catch.

    Just my view. For me, the root cause of this country's ills is not a lack of education in school but a lack of education in the home. The government seems hell-bent on excusing parents their responsibility. If you are teaching kids these things for the first time in school...the horse has well and truly bolted.
  • DaftMule wrote: »
    1) Money does not magically appear in your pocket. It takes hard work and time to accumulate. The best way of teaching kids this fact is to actually take them through the process.

    That's my point, it doesn't magically appear for us, but if you are a bank you can magically create money by using people's production as collateral. They lend money into existence and when you can't repay they get to seize real stuff from you.

    I also agree with some of the other comments that teaching people life skills, about filling in forms and writing cheques and all that. You just hit a point when suddenly you're dropped in at the deep end. It's no wonder people struggle.
  • My 8 year old has just started getting pocket money - performance related! He gets 10 spellings a week to learn. He gets £3 if all spellings are correct, 25p knocked off for each one he gets wrong. 1st lesson - you have to work for your money!
    He is starting to learn that he has finite resources. So - does he get a Simpsons magazine (£2) or save for a Lego model. He is just starting to understand the spend / save question.
    He is also learning to shop around - ie, "Mummy, I want some new pokemon cards - can we have a look if there are any on ebay, I can spend £4.00"
    In my opinion - kids need to learn about choices - what budget they have, what they want to spend it on, where to buy it from.
    Also - parents need to say no more often & explain why.
  • 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.
    The Laughingbear
  • SoshSosh Forumite
    175 Posts
    How to budget and live within their means. Many of the students I teach think they'll be able to buy their food at M&S and buy designer clothes while on the dole
    Thanks to all the lovely people on here I have managed to cut my hours down to 2 days a week, allowing me to spend more time with my gorgeous Children. :j
  • tracey2412 wrote: »
    When my son asked for a £60 pair of trainers (& answered my first response that it was a lot of money & I couldn't afford with a 'no, it's not a lot of money, some pairs are over £100!) I tried to explain that money was not limitless this way (as well as testing his mental arithmetic!):
    If an average person brings home £300 (e.g.) a week for 5 days work, how much do they earn a day?
    He said £60. So, that's a whole day's work for one pair of trainers. When you also have to pay for mortgage / rent, bills, food, travel & other essentials, did he still think that £60 was not a lot of money.
    At 9 years old, he got the message.

    Now, we calculate the cost of many things by 'how many hours / days' someone (mum / dad) has to work to pay for it. And he thinks twice.

    Agree that this is a brilliant way of getting the message across. I have a 10yr old son who loves to browse the internet looking for latest hi-tec trainers that cost a fortune. I've always used the "no point, they won't fit you in 6 months approach" - not that I'd spend that much anyway! But think example above is much better. One of the problems we find as parents is that a lot of children seem to be under peer pressure to have the latest "thing" - if their friends have it, then they want it! Eg., our son wants a mobile phone and apparently "everyone else has one except for him" (yeah, right)! However, until he's at the stage where he goes out without me or his dad (or any other adult), then he doesn't need one.

    Finally, one other thing that I think should be taught is to only spend what you know you can afford. This links back to credit card debt and young people really need to be aware of the dangers in overspending and just paying off min amount each month. They need to be taught to spend in a way that they can pay off full balance each month, otherwise they're paying so much more!!
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